Pittsburgh Area Multifamily Zoning

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Pittsburgh Area Multifamily Zoning

Brendon W.
New to Real Estate · Pittsburgh, PA · Member since 2020 · 20 posts · 8 votes

I've been trying to find an area to purchase a home as a primary residence with the goal of increasing my savings rate. My target area is the South Hills / Northern Washington County area. As a wanna-be investor with no experience, ideally I'd like to find a relatively turn-key duplex that I could leverage an FHA / low down payment conventional loan on. I've been analyzing the small multifamily properties on the market within the last few months, but I haven't found anything suitable so far. I've also been considering the option of buying a single-family home that has potential to be converted into a duplex, however, the zoning laws vary township by township regarding leniency towards multifamily zoning. Some of the areas most conducive to this type of thing naturally seem to be the areas with exorbitant tax rates (Brentwood, Carnegie, Dormont, etc.) and being as that I would only be collecting rent from one Unit, a $500/month tax bill might make it more beneficial to just try and find a small single family further from the city in a nicer area that can't be converted. Renting out rooms isn't really an option for me either.

I have a pretty decent paying job, but I've been renting in Upper $aint. Clair like an idiot for the last 4-5 years before I caught the RE bug and now I'm just trying to figure out how to tackle my housing expense but this is the issue I've been stuck on. Anyone have any insight or knowledge as far as zoning in the area? 

Thanks !

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Anthony Angotti
Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
5y
Originally posted by @Brendon W.:

I've been trying to find an area to purchase a home as a primary residence with the goal of increasing my savings rate. My target area is the South Hills / Northern Washington County area. As a wanna-be investor with no experience, ideally I'd like to find a relatively turn-key duplex that I could leverage an FHA / low down payment conventional loan on. I've been analyzing the small multifamily properties on the market within the last few months, but I haven't found anything suitable so far. I've also been considering the option of buying a single-family home that has potential to be converted into a duplex, however, the zoning laws vary township by township regarding leniency towards multifamily zoning. Some of the areas most conducive to this type of thing naturally seem to be the areas with exorbitant tax rates (Brentwood, Carnegie, Dormont, etc.) and being as that I would only be collecting rent from one Unit, a $500/month tax bill might make it more beneficial to just try and find a small single family further from the city in a nicer area that can't be converted. Renting out rooms isn't really an option for me either.

I have a pretty decent paying job, but I've been renting in Upper $aint. Clair like an idiot for the last 4-5 years before I caught the RE bug and now I'm just trying to figure out how to tackle my housing expense but this is the issue I've been stuck on. Anyone have any insight or knowledge as far as zoning in the area? 

Thanks !

Trying to convert from a SFH to a duplex is a nightmare. Also, Dormont is actually pretty average tax rate wise across Allegheny county. . . .so it's just kind of a Western PA things (and PA as a whole) to have garbage tax rates.

Sounds to me like you are torn between high cash flow (which means buying in a C class area/or buying a beat up property) and buying something turnkey in a B class and up area. My advice would be to work that out first. Personally I have bought a lot of units in Dormont and although the taxes go up and the purchase price is high the area has been appreciating well rent wise and value wise, the tenant quality is good, and I've added so much to my networth over the years by being invested in a good/appreciating area. I still cash flow, but at this point as long as a building makes money after all expenses I'm not hung up on it being a home run cash flow wise. I'm really just looking for something that is most likely to grow my networth substantially, and after running the numbers a bunch of different ways that's been B class properties with a moderate amount of value add. 

I also still house hack in Dormont and really the house hack deals that I've done the numbers have worked out after we leave, but they aren't home runs cash flow wise, however the ROI is gigantic considering the low amount of cash needed to get in.

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  • Miranda Micire
    Real Estate Agent · Pittsburgh, PA · Member since 2020 · 82 posts · 55 votes
    5y

    A general rule that I've heard from others more experienced than I am, never rely on rezoning for your first project to work financially. In the City of Pittsburgh we wanted to build a 6 ft fence and that required zoning variance and a zoning board hearing. We applied July 1, our hearing wasn't set til Sept 10, then we didn't' get the decision til mid October. For just a fence. 

    0Reply
  • Brendon W.
    OP
    New to Real Estate · Pittsburgh, PA · Member since 2020 · 20 posts · 8 votes
    5y

    I figured it likely wouldn't be an option. I haven't actually spoken to anyone within the zoning offices but just from reading some of the archaic local ordinances it seems like many of the municipalities are pretty strict about retaining the aesthetics of the neighborhoods. On a side note, I learned during my research that you can get a permit to keep bee's in all zoning districts in Bethel Park, so maybe that can be a side hustle to build some capital :)

    0Reply
  • J. Daniel Glagola
    Member since 2019 · 3 posts · 4 votes
    5y

    Have you considered Canonsburg or McDonald?  First of all, you are out of Allegheny County and their taxes. Second, route 79 and route 50 help you move faster into the city than route 51, 88 or even 19. I actually live in the City of Washington and i can get into Pittsburgh in 35 minutes outside of rush hour. I suggest that you take a drive on a Saturday or another day off around these areas. You will be pleasantly surprised.

    2Reply
  • Anthony Angotti
    Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
    5y
    Originally posted by @Brendon W.:

    I've been trying to find an area to purchase a home as a primary residence with the goal of increasing my savings rate. My target area is the South Hills / Northern Washington County area. As a wanna-be investor with no experience, ideally I'd like to find a relatively turn-key duplex that I could leverage an FHA / low down payment conventional loan on. I've been analyzing the small multifamily properties on the market within the last few months, but I haven't found anything suitable so far. I've also been considering the option of buying a single-family home that has potential to be converted into a duplex, however, the zoning laws vary township by township regarding leniency towards multifamily zoning. Some of the areas most conducive to this type of thing naturally seem to be the areas with exorbitant tax rates (Brentwood, Carnegie, Dormont, etc.) and being as that I would only be collecting rent from one Unit, a $500/month tax bill might make it more beneficial to just try and find a small single family further from the city in a nicer area that can't be converted. Renting out rooms isn't really an option for me either.

    I have a pretty decent paying job, but I've been renting in Upper $aint. Clair like an idiot for the last 4-5 years before I caught the RE bug and now I'm just trying to figure out how to tackle my housing expense but this is the issue I've been stuck on. Anyone have any insight or knowledge as far as zoning in the area? 

    Thanks !

    Trying to convert from a SFH to a duplex is a nightmare. Also, Dormont is actually pretty average tax rate wise across Allegheny county. . . .so it's just kind of a Western PA things (and PA as a whole) to have garbage tax rates.

    Sounds to me like you are torn between high cash flow (which means buying in a C class area/or buying a beat up property) and buying something turnkey in a B class and up area. My advice would be to work that out first. Personally I have bought a lot of units in Dormont and although the taxes go up and the purchase price is high the area has been appreciating well rent wise and value wise, the tenant quality is good, and I've added so much to my networth over the years by being invested in a good/appreciating area. I still cash flow, but at this point as long as a building makes money after all expenses I'm not hung up on it being a home run cash flow wise. I'm really just looking for something that is most likely to grow my networth substantially, and after running the numbers a bunch of different ways that's been B class properties with a moderate amount of value add. 

    I also still house hack in Dormont and really the house hack deals that I've done the numbers have worked out after we leave, but they aren't home runs cash flow wise, however the ROI is gigantic considering the low amount of cash needed to get in.

    2Reply
  • Brendon W.
    OP
    New to Real Estate · Pittsburgh, PA · Member since 2020 · 20 posts · 8 votes
    5y
    Originally posted by @J. Daniel Glagola:

    Have you considered Canonsburg or McDonald?  First of all, you are out of Allegheny County and their taxes. Second, route 79 and route 50 help you move faster into the city than route 51, 88 or even 19. I actually live in the City of Washington and i can get into Pittsburgh in 35 minutes outside of rush hour. I suggest that you take a drive on a Saturday or another day off around these areas. You will be pleasantly surprised.

    Yep I actually lived in the Southpointe area for a few years so I'm familiar with both of those areas and have been focusing more on Canonsburg lately. Its always struck me as a traditional Pittsburgh area neighborhood where a lot of owners still take pride in these old style brick houses but there's a decent rental inventory that's a little more reasonably priced, plus I work in Washington County so it makes a little more sense for a primary residence. My only real concern is the effect of a shut down of the fracking industry would have on Washington County specifically. With the way the political landscape is shaping up, it seems to be a very real possibility.  

    1Reply
  • Brendon W.
    OP
    New to Real Estate · Pittsburgh, PA · Member since 2020 · 20 posts · 8 votes
    5y
    Originally posted by @Anthony Angotti:
    Originally posted by @Brendon W.:

    I've been trying to find an area to purchase a home as a primary residence with the goal of increasing my savings rate. My target area is the South Hills / Northern Washington County area. As a wanna-be investor with no experience, ideally I'd like to find a relatively turn-key duplex that I could leverage an FHA / low down payment conventional loan on. I've been analyzing the small multifamily properties on the market within the last few months, but I haven't found anything suitable so far. I've also been considering the option of buying a single-family home that has potential to be converted into a duplex, however, the zoning laws vary township by township regarding leniency towards multifamily zoning. Some of the areas most conducive to this type of thing naturally seem to be the areas with exorbitant tax rates (Brentwood, Carnegie, Dormont, etc.) and being as that I would only be collecting rent from one Unit, a $500/month tax bill might make it more beneficial to just try and find a small single family further from the city in a nicer area that can't be converted. Renting out rooms isn't really an option for me either.

    I have a pretty decent paying job, but I've been renting in Upper $aint. Clair like an idiot for the last 4-5 years before I caught the RE bug and now I'm just trying to figure out how to tackle my housing expense but this is the issue I've been stuck on. Anyone have any insight or knowledge as far as zoning in the area? 

    Thanks !

    Trying to convert from a SFH to a duplex is a nightmare. Also, Dormont is actually pretty average tax rate wise across Allegheny county. . . .so it's just kind of a Western PA things (and PA as a whole) to have garbage tax rates.

    Sounds to me like you are torn between high cash flow (which means buying in a C class area/or buying a beat up property) and buying something turnkey in a B class and up area. My advice would be to work that out first. Personally I have bought a lot of units in Dormont and although the taxes go up and the purchase price is high the area has been appreciating well rent wise and value wise, the tenant quality is good, and I've added so much to my networth over the years by being invested in a good/appreciating area. I still cash flow, but at this point as long as a building makes money after all expenses I'm not hung up on it being a home run cash flow wise. I'm really just looking for something that is most likely to grow my networth substantially, and after running the numbers a bunch of different ways that's been B class properties with a moderate amount of value add. 

    I also still house hack in Dormont and really the house hack deals that I've done the numbers have worked out after we leave, but they aren't home runs cash flow wise, however the ROI is gigantic considering the low amount of cash needed to get in.

    Haha I've become acutely aware of the tax rates in Western PA in general. I'm originally from Central, PA so it was a bit of a shock when I looked into it but I guess it could be worse (at least we're not in New Jersey). 

    It's not so much being torn between cash flow and turnkey, but mostly the fact that I'm a police officer and there's certain areas where I don't want to be parking a police car overnight given recent events. For a primary residence, I'm perfectly content with just covering a chunk of my housing expense compared to what I've been paying in rent to help increase my savings rate. Secondly, I'm not handy at all so I'd prefer to start small on the rehab side, the original question of a SFH conversion was me just wondering what the possibilities were long term.

    In your house hack, are you using a low down payment owner-occupied option? That's another concern of mine at this point, I don't want to wind up being stuck underwater on something if there is a serious downturn given the unprecedented situation we're in.  

    1Reply
  • Samuel Vogt
    Pittsburgh, PA · Member since 2017 · 36 posts · 23 votes
    5y

    Brendan sounds like you are being methodical and going about things the right way. I’ve been house hacking a duplex in southside for 3 years now. Happy to chat/text/ if you wanted to talk shop. I have some RE experience (3 total deals so far, and looking for a fourth), but not as much as someone like Anthony above (my agent).  My biggest recommendation/piece of advice is not to be overly picky with your first duplex purchase. Maybe have a couple non negotiable’s in your search, but anything outside of that, as long as the numbers work after you leave, then pull the trigger. The increase in your savings rate is a life changer.

    2Reply
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