What's the pulse in Pittsburgh?

Question

Hi, Rookie-ish investor here. Born and raised in Pittsburgh but, I currently live in suburban Philly. I have been strongly entertaining the idea of grabbing some property in my hometown. Seeing all the turn around in my old neighborhood (Bloomfield) and the surrounding neighborhoods, i'm wondering what area is next? I am very familiar with the city and the surrounding neighborhoods, but not being there it's hard to keep up with all the changes happening. I'd love to connect to talk about the Burgh. Tell me, what are you seeing?

Sam Schaefer · Answer

@Ray Riley Hi Ray! @Jeremy Taggart said a lot of great stuff! The east end is a bit tough with competition and hiked prices, but there are still plenty of areas around the city that are probably earlier on in the gentrification cycle. Northside is definitely one of those areas, and I see a lot of investors moving into Southside but the properties are not super expensive (yet).Before buying in the City of Pittsburgh, I would strongly recommend deciding on a strategy. If you are looking to BRRR a property, it's tough because you need a permit for everything, and they are expensive AND take a month or more to get approved. Another thing to consider is that the City of Pittsburgh has the highest transfer taxes in the state (and from what I have seen/read, in the country) - so when you buy a property in the city, you are paying 2.5% in transfer taxes and so is the seller. That may not sound like a lot, but it adds up, and if you wanted to do flips, the cost / timeline for permitting coupled with the transfer tax cost would eat away at a lot of your profit. None of this is to discourage you from buying in the city (I own properties in the city myself) - I just want to make sure you go in with both eyes wide open. That being said, there are many neighborhoods just outside the city that could have a nice return for you - just depends on your strategy.Also, being out of town, I would try to assemble a team before buying (plumber, electrician, etc.) because you are going to need people that you trust in case of an emergency. I have contacts I would be happy to share.Always happy to discuss further and share about what I have seen work (and not work). I'll shoot you a message :)

Jeremy Taggart · Answer

@Ray Riley wish I knew I'd be buying up blocks! haha The East End is ground zero of gentrification here and I believe it will continue to bleed outward from the universities/Strip District/Bakery Square where there are quite a few high paying jobs in the tech/healthcare fields. Most of the core neighborhoods there are getting pretty pricey nowadays, Bloomfield being an early part of this. I also believe a lot of the North and South Side neighborhoods outside of the flats will continue on the upward swing as people get priced out of the North Side/South Side Flats/Mt. Washington. Then if Pittsburgh goes thru widespread development eventually it'll make it's way to the West End. Hasn't really picked up as much in the west end much yet since it's mostly residential neighborhoods and kind of separate from the rest of the city on account of how everything is laid out with the rivers/hills here. Best cash flow over there though right now compared to much of the rest of the city. Prices have gone up there but just not quite as much as the parts of the city closest to the high paying jobs.I believe the key to a neighborhood gentrifying generally it has to be at least halfway decent to begin with. The neighborhoods that are super high crime have much more of an upward battle to turn around. If it's a neighborhood that's just a little rough around the edges though then people will still be willing to move there which starts the process. Some hoods are almost too far gone to the point where they can't benefit from it until they get the crime rates down.

Miranda Micire · Answer

I haven't been able to find a great property management company but I'm sure others can help with that part. For what its worth to all on this thread, I'm convinced Wilkinsburg is the next up-and-coming neighborhood. I know some might call me crazy, but the recent talks about merging with the City of Pittsburgh have people on high alert. I've heard from one developer that the second the two merge he's building in Wilkinsburg ASAP. There are parts of the neighborhood that are better than others, of course.

Gabe G. · Answer

@Will Haines It sounds like you have many of the ingredients needed to get started. You're correct to realize your need for a good company though. I ran my family's property management company for the last decade because we couldn't find someone we believed could do a better job than us. Then we met Home365, and we recently turned our entire portfolio over to them to manage. I'd be happy to chat with you about them if you're interested. @Miranda Micire Same for you. Message me if you'd like to chat about PM stuff. I'm happy to help.

Clayton Hepler · Answer

Just bought a 6 unit in Larimer (Right behind bakery sq) and on the path of progress. Let me know if you need any help!

Kurt Naletko · Answer

I am currently under contract for my first property in the Pittsburgh Metro, Trafford to be specific. Would love to connect to hear your thoughts on the area, as well as trusted contacts that you have. I have been working on assembling a team myself, and recommendations from other investors are always my favorite place to start on any market.

Ali Powell · Answer

Hi Kurt, My wife and I are just starting our journey in the Pittsburgh area and would welcome your thoughts/perspective on your experience. We will be making investment purchases in the Pittsburgh area in 2023

Will Haines · Answer

I’m also looking at rentals in the Pittsburgh metro. I have a decent pulse on agents, financiers, and contractors but don’t have a good read on property managers in the area. Does anyone have recommendations on that piece of the puzzle?I’d agree that any parts of the East End anywhere near Google HQ are getting quite pricey and gentrified. My current research shows some good prospects in the South, like Allentown or even Carrick, but there are some gems up North, too, I’d think.

Ray Riley · Answer

@Jeremy Taggart It's interesting to see how places I once knew as not awesome areas to hang out in as a kid, have become hot spots. I agree there could be a lot of opportunity on the west end. It's different looking at Pittsburgh through the lens of investor and not just as a guy who grew up there. Thanks for the response.

Gary Swank · Answer

@Ray Riley Hi Ray, Pittsburgh is a strong market for investors and there are many upcoming neighborhoods that are sparking interest. I've lived here my whole life and know the area very well. Feel free to reach out to me. Gary