Central PA Investing Success?

Question

Hello,

I am a very new investor looking for a solid place to broaden my portfolio. I am wondering if anyone has any success stories (or not so successful stories) they would be willing to share about investing in central PA. I am specifically interested and considering investing near Geisinger Hospital, Bloomsburg, Bucknell, and surrounding areas. Any tips/networking would be much appreciated.

Andrew Bosworth · Answer

@Collin Sceski,Welcome to BP. It's a great site; hope you find it helpful.Just my two cents, but if you want to get into buy and hold, then focus on that from day one. Maybe you need to wait a little longer to get that first property, but so be-it. Why? Because buy and hold and flipping are two totally different strategies. This isn't rocket science, but at the same time, if you want to be successful at this, get really good at one thing. Flipping just to raise some extra capital, especially in a smaller market, might not be the best use of time, money and resources. Flipping is also a lot riskier a) if you are new at it or b) if you are in a small market; plus you have tax and realtor costs associated with a flip. If you have the money to do a flip, then you might have enough to get a buy and hold right away. BRRRR is a great strategy, not always attainable, but worth pursuing...IMO. Why not start small and use the accrued equity to purchase more in the future?Buy and hold = investment; flipping = a JOB.

Andrew Bosworth · Answer

@Collin Sceski I can't give you a specific answer, in particular because flipping is not my focus. However, it's always important to have multiple exist strategies - in other words, maybe you buy a house with the intent to flip it, but instead of just calculating your possible profit (remember, factor in taxes, realtor fees, closing costs, etc.), make sure the property will also cash flow after all your costs (acquisition, rehab, financing, etc.). This way, if the property doesn't sell right away or for the price you were hoping, you can still rent it out and cover your monthly operating expenses. Additionally, having multiple exist strategies can help curb your flipping enthusiasm so to speak. I.E. it is easy to get carried away and spend "just a little more" on those fancy counter tops, floors or fixtures, thinking that they'll add a ton of value, but end up making you go over budget. If you know you can only spend $$$ in order for the property to cash flow, that will keep your budget in check. When you're considering a property, I'd ask @Jacob Plocinski to send you local comps to see not only what they sold for, but what kinds of finishes they had. You can work your numbers backwards from there.

Collin Sceski · Answer

@Andrew BosworthHey Andrew thank you for that response. I think that focusing on one strategy to start is solid advice. As I stated, if I find a house that will allow me to BRRRR (reclaim my capital and cash flow) I will jump on it! My thought process towards flipping some houses vs buy and rent is that some houses are in an area where they can be flipped but not in an area or structured in a certain way such that people will rent them at a good price. Have you found that to be the case? Are there some houses that could be flipped for a profit after rehab but would not cash flow after rehab?

Jacob Plocinski · Answer

I have not worked personally with any flippers in Danville. However, I know of about 3 or 4 properties that have been flipped in the last 3-6 months. There are cash flow properties in Danville, but a lot of the SFR are hard to cash flow because property value is higher. Average sale price in Danville was 225k over last year vs Bloomsburg 168k. Even Bloomsburg is a mixed bag because Central School District which is half of Bloomsburg avg sale price was 206k. Berwick is the easiest cash flow, but I wouldn't expect the same types of appreciation or even increased sale value after a flip. Send me a message about more specifics and I can take a look at current inventory and recent sales to give you a better idea.

Collin Sceski · Answer

Hi Jacob,Thanks for the reply! I am currently interested in residential flips to build my capital so that I can move into larger more stable cash-flowing properties. If I can find that holy-grail of investing: a BRRRR that allows me to draw out more cash than what I put in I will certainly jump on it! Flipping houses near Danville that will sell or rent to Geisinger employees seems like a good gameplan. Have you worked with any investors who have had success in that town? Thanks!

Jacob Plocinski · Answer

Hey Collin, I'm a Realtor in this market. Are you interested in residential/multifamily or school rentals?