Out of State Investor Looking to Connect and Learn the Market

[Joseph Lin]

Hi everyone,

I'm looking to do my first BRRRR as an out of state investor in Pittsburgh. I just wanted to start this thread to network with others in the Pittsburgh market and get a feel for the area. In particular, I'm looking for:

- 40K in equity after repairs

- Cashflow at least $200 after expenses and debt services

- B class neighborhoods and above

- All in price around 100K

Based upon my research, it seems like this is possible to do. Does anyone have any thoughts on this and neighborhoods that could fit this criteria? Any recommendations for realtors/property managers/contractors would be greatly appreciated as well.

Thanks!

[David Lee Hall, III]

In regards to C neighborhoods I have found screening tenants properly is the key. I have a couple. One has a lovely family that treats it as their home and the other I inherited tenants that trashed the place and didn't pay. Obviously not inheriting someone you didn't "personally" screen I have learned is a no-no. 

As for the "fractured" nature of things, it really comes back to topography. With Pittsburgh being the largest city in Appalachia it has a lot of same characteristics you see in West Virginia, western VA, SE Ohio, and eastern Kentucky where the hills/valleys/rivers/creeks all create natural barriers to travel. On a larger scale there is a joke that people will never cross more than 2 rivers and tunnels to go anywhere. This humor is born out of the fact that those crossings are bottlenecks. So you rarely see someone from the east (say Monroeville) commute to the west (say the Airport) for work or shopping. So on a high level there are 3 major geographic areas, the east (east of the Squirrel Hill Tunnels and the Monongahela River), the South/West Hills (south of the Mon. to the west up toward Beaver County), and the North Hills (north of the Allegheny). If you look at local franchises and service companies, they are frequently broken up with offices in those 3 areas, sometimes with downtown wrapped in or seperate.

Beyond topography, you get the fact you really had 3 landscape types: hill, valley (hillside), or floodplain. The flat floodplains were typically where you had mills and factories. And because of the lack of easy transportation that meant most of the people working in those factories lived in the local valley adjacent to that floodplain. From a Google Maps perspective, check out Etna, Millvale, or the South Side Flats vs. the South Side Slopes to get a feel for that. 

As for desirability - it is really a combination of the difficulty of travel (remember Uber uses Pittsburgh as the testbed for their self-driving cars due to difficulty and abundance of "features"). Projects like the widening of Route 28 in the last 10 years helped bring life back to many of those old mill towns along the Allegheny. The new South/West Turnpike extension through McDonald and Cecil should help only to grown communities in the Southwest aiding in more direct highway travel and the first (when actually complete) southern connection east-to-west. So if you have a community that has easier transportation to town or business hubs (Cranberry, SouthPointe, Moon, etc.) then you have a higher livable rate even if the traditional mill or mining jobs have dried up. In town it is more about proximity to jobs again (downtown or strip or Oakland), growth centers (Bakery Square, Nova Place), and amenities. So while Lawerenceville booms, buying there was really the thing 10 years ago. People say they want in Lawrenceville - that is great, but you are past that initial "get in cheap" point unless you happen to get lucky (due to national press, people tend to know their units are worth a bunch there). Better would be looking at say Stanton Heights, just on the other side of Lawrenceville and having good appreciation as people are priced out of Lawrenceville and moving on to the next community. Overall I don't look for appreciation here though, I look for cash flow. That has me in places like Carnegie, Cheswick, Windgap, and Bridgeville. 

Hopefully you found this a little helpful. If you need anything feel free to message me directly. I do some wholesaling as well if you are ever interested in seeing those opportunities let me know. Eventually I would like to offer turnkey services to someone like yourself but at this point I am still a one-man show as I have talked to a number of folks interested in the market such as yourself and I think it could be a strong business plan.