Best Boroughs in Pittsburgh PA for First Small Multi-Family BRRR?

Question

Hey BP community,

I’m currently looking to acquire my first small multi-family property (2–4 units) using the BRRRR strategy in the Pittsburgh area, and I’d love to tap into some local insight.

I’m especially focused on areas that are:

• Investor-friendly and BRRRR-compatible (value-add potential, decent cash flow)
• Still somewhat affordable, but not war zones
• Seeing signs of revitalization or steady tenant demand
• Preferably not too far from downtown or universities/hospitals for long-term upside

Investor-friendly and BRRRR-compatible (value-add potential, decent cash flow)

Still somewhat affordable, but not war zones

Seeing signs of revitalization or steady tenant demand

Preferably not too far from downtown or universities/hospitals for long-term upside

Are there specific boroughs or neighborhoods you'd recommend I dig into? Or any I should be cautious about?

Appreciate any insight from investors with boots on the ground in Pittsburgh!

Thanks in advance,
Sebastian

Jim K. · Answer

Hi, Jeremy, the DHRE team is going to have to add Whitaker to that list. Just sold a 2-bedroom single-family for $140K to a new homebuyer that I bought for less than $70K cash from a local investor who wanted out of the affordable rentals game four years ago. Now granted, Whitaker's government isn't all that much fun to work with, but there are opportunities there. I know. Whitaker. Who would have thought it?

At the same time, Airbnb is taking off in the upper part of Homestead/Munhall and Munhall Gardens. The fact that the upper Steel Valley boroughs are adjacent to the Waterfront and so easy to get in and out in all directions is becoming a big draw to people looking for an affordable STR to visit family and friends. As well as other types of groups -- we just hosted the whole Democratic Party House Re-Election Committee for the Goughnour special election.

Jeremy Taggart · Answer

@Sebastiano Cantali Millvale, Etna, Sharpsburg, Brighton Heights, Carnegie, Swissvale, Homestead, Munhall, Carrick, Observatory Hill, Forest Hills, Bridgeville, Brookline, Beechview, Overbrook, Coraopolis, Ambridge, Crafton Heights are some that come to mind.

Key is to focus on areas that aren't too high end but also not too rough. If you get into too expensive neighborhoods the rent/price ratios won't work on the backend. The rougher areas can be very tough from a management perspective being out of state and having to rely on third party property management to successfully manage for you, plus the margins tend to get slimmer from an equity standpoint after you factor in the rehab versus the ARV.

Jeremy Taggart · Answer

You know I don't mind Whitaker, I agree with you there. I was actually just there looking at a property for a client last week. Not a bad little neighborhood at all, pretty similar to West Mifflin. Just haven't seen too many multis there seems to be mostly single family homes. Also similar to West Mifflin from that standpoint.

Drew Sygit · Answer

Don't know Pittsburgh, but do know that many investors make the mistake of not properly aligning the following per property Class:

1) Expectations - too many use Class A expectations for Class B, C, D, etc. properties, then wonder why they're not hitting their ROIs.

2) Hiring Class A PMCs, contractors, etc. for Class B, C, D, etc. properties. They will all do the work they know, and cost more than necessary, or not be interested in the work.

3) Repairs & Renovations - again, too many do Class A work on Class C & D properties. Tenants destroy ROI this way:(

Hope this helps!

Matt Dingus · Answer

Hey what's up Sebastiano,

You picked a great city and market with Pittsburgh. I agree with the areas Jeremy mentioned above. Couple thoughts and suggestions if it helps. BRRRRs in general can be tough to find any more in today's market that pencil out, unless you're ok with leaving a chunk of $$ in the deal. A 2-4 unit BRRRR deal where you pull all of your cash out is a home-run. It can be very tough to find those deals because A) Most 2-4 units are occupied so you can't go in right away and start swinging hammers and renovate all the units and I'd say B) Because most of them aren't totally distressed where there's enough value-add potential, especially in the somewhat decent areas (different story in the D-F areas).

With that being said, I would certainly still target this as your goal for your first deal here because it can certainly be done and would be awesome. However, I would invite you to open your buy box a bit and include single family homes as well. The cash flow may not be as nice on the backend as they are with the multis, but I think the key here is there will be a lot more opportunities for you to get a deal done. Plus there's a large demand for single family home rentals here, the tenants stay longer, pay all utilities...among some other benefits compared to the 2-4's.

So in my opinion, that's one of the most important things to consider when you're first getting started is to start doing deals, get experience, grow your team, etc. - if you're someone that wants to grow a large portfolio and continue doing rehab projects. More important to me than finding the perfect deal is to get the reps and create those opportunities to do so. Hope that helps a bit. Reach out if you'd have further questions.

Best Boroughs in Pittsburgh PA for First Small Multi-Family BRRR?

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