New Kid from Pittsburgh, PA

[Athena Flint]

Hello! My name is Athena. I'm from Pittsburgh, born and raised. 

I'm so very glad to have found this website and forum. 

About a month ago I decided that I wanted to buy a house that I could live in, and also collect rent from. While I was slowly trying to learn some of the ropes before I jumped in with both feet, my dear mother fell into a pit of landlord doom while trying to rent a house for the first time herself.

Her house is in New Castle, about an hour from myself, and god love her, she's an amazing woman, but the last people she rented to totally took advantage of her and ended up abandoning the property after building up a debt of $2,000+. 

Since I wanted to head down the landlord path anyway, I've firmly inserted myself as her new property manager, and am looking for tenants for her. She is grateful, and I'm relieved that she's breathing a little more easily, but I am also HIGHLY aware that I don't know what I'm doing. 

I listed the property as a rental yesterday, and have already received numerous emails stating interest in renting. I've set up some viewings (all from an hour south of the house) and I downloaded the SUPER HANDY rental application form. 

Now comes everything else. I'm currently putting together a lease, using the PA standard rental agreement form and some resources I've found on the FilePlace. 

I've been on the computer and in the library all day today. I've already learned some very important things and I'm excited about this little adventure that will help me when I DO buy my own multi- family house (fingers crossed) But I'm also scared that I'm going to mess things up. 

So, in advance, thank you all to the active members here that have already taught me things, thank you to the real estate guides, and thanks for any and all advice you feel like sharing with me. 

[Shaun Reilly]

Hi @Athena Flint

Welcome to BP!

Well you didn't get into an easy task, The Castle is not a place that a landlord can kick back and just collect all that cash flow.

I invest there from out of state (have 5 houses, 6 units, in the city) and it is not easy.  I have decent "boots on the ground" but there is so much crap that happens it is hard for them to deal with it all and for me to keep on top of it.

Properties are cheap, they will NEVER appreciate, rents are low and the quality of tenant is not good. There was some hype a couple years ago around the natural gas workers coming in, but that was really just the occasional home run you hit for 6 months. It did cause foolish out of state investors to start to buy $20K houses for $25K and now that the hype has died down and they realize they hate being landlords there they can't sell these places for $20K since you can find like 100 similar houses for $18-22K just on MLS any day of the week. (Happy to say that while I am a foolish out of state investor, I didn't overpay and could actually get my capital out of most of my places if I wanted to)

You have to use SERIOUSLY modified numbers here.  Use a 30-50% vacancy factor minimum.  There are more houses than quality tenants so you can sit on a place for a while, or worse have type of vacancy that has someone living there...  I'd specifically budget for an eviction for every year.  You won't always use it but the years you do 2-3 it will balance out...  Also plan on a mid level renovation on every turnover.  Again won't use more than normal level many times, but your major turnover when they trash the place happens much more frequently so it will all average out.

Good luck!  :)

All that being said you will still be able to do less expensive stuff with much less of these hassles if you are closer to PIT.  You have a pretty solid group of people out there that have had good results.  @Jerry Kisasonak contributes here on BP and has a good active FB group for PIT RE Investors:

https://www.facebook.com/groups/Pittsburghrealesta...

Get to know these guys and get out to some local investor meetings.  I know of the ACRE meeting in PIT and I think there might be at least one other one in or near the city.

For The Castle there is the AALC (Apartment Association of Lawrence County) and the New Castle REIA. You actually probably want to go to 1 or both of these a couple times at least getting started there to get a better feel from the people down there working that area every day.