All Forum Posts by: Alex Hileman

Hello Shalom,

Welcome to BP!

I have worked with other investors from Israel, and I would be happy to speak with you about the Pittsburgh market and learn more about your investing goals.

Sincerely,

Alex 

Welcome Noy!

Jeremy posted some great insights. Another thing to look out for is the sewers. Here in Pittsburgh, the homeowner owns the sewer line from the house to the sewer main tie in. A lot of the sewer pipes here are old terra cotta and they can easily crack or shift over time. You can elect a camera sewer inspection to check for this. If the pipes haven't cracked, a plumber can usually re-line the existing pipes. If they've collapsed, they will need to be dug up and replaced. It's a very expensive repair (ballpark $15,000) and the cost depends on how long the sewer line is.

A lot of municipalities here require dye tests and occupancy inspections. Usually the seller completes these before closing, but for the "as-is" sales or foreclosures, they tend to put that responsibility on the buyer. These requirements are posted on the municipality websites and you can look them up or call the municipality to find out what's required. If the house doesn't pass the occupancy inspection before closing, the municipality can usually issue a temporary occupancy permit. If the dye test fails, then the municipality may make require the funds for the repair to be escrowed in order to give a temporary permit. These inspections are common, but they're also the most common reason that I've run into for closing delays. It's important to get started on these as soon as the offer is accepted because the municipalities can be slow to respond and schedule the inspections.

 Hey Logan,

I'm seeing properties that appraise for about $80k. Is that something you can work with?

Hi Paul,

The main risk with buying a wholesale property is that they're usually sold as-is with no contingencies. Unless you are confident in estimating the renovations needed, I would highly recommend getting a contractor's professional opinion of the rehab costs. Ask your contractor to walk the property with you if they're available during the showing, or at least send them the photos and information that you received from the wholesaler to get their opinion.

In Pittsburgh a light or cosmetic renovation is about $20k, medium is $50k, and a full gut is $100k. You can get some estimates from contractors for what they charge for big ticket items like to renovate a bathroom, renovate a kitchen, replace the furnace, replace the roof, etc.

All wholesale deals should have free and clear title and you should be able to see the sales agreement before submitting the earnest money deposit. You should also have access inside the house in most cases. If the home is occupied, there's usually 1 group showing scheduled, so you'll want to come prepared with your comps and ARV.

When you go inside, you're verifying that the condition and estimated rehab costs match your expectations. There usually aren't photos of the basements and that's were most of the big ticket issues are. Check for cracks in the foundation, condition of the mechanicals, any water coming into the basement, etc. 

Hey Everyone,

As many of you know, Pittsburgh is a unique market with a lot of opportunities in neighborhoods where properties can still be purchased for less than $100K. However, many DSCR lenders have a minimum loan amount of $100K, which can make it challenging for investors to secure financing for lower-priced properties.

I'm currently working with a lender that has a $50k minimum, and his rates and customer service have been great so far. His name is Dalton Godson with Nexa Mortgage and we're using a UWM product.

If you’ve found a lender willing to work with smaller loan amounts, what were their requirements and rates like?

I’m sure others here are also running into this issue, so any recommendations and referrals would be greatly appreciated!

Thanks in advance,

Alex

Welcome Ana!

I recommend reaching out to Mary Verratti. She is an investor-friendly agent, investor, and STR host. She's an agent with Deacon and Hoover. I can message you her contact info if you'd like. She's a wonderful person and is successful in the STR space in Pittsburgh.

Good for you for adjusting so many times and not getting discouraged. That's a lot of bad surprises but you made the most of it!

I am curious about the local companies that you found that house project workers. How did you find them, and what did you look for?

Hi Kwok,

From my experience, it's really common to have to expand your search for comps, either by looking for more than 6 months back or by going more than a mile out. It depends on the market, but more densely populated areas like New York City will have more sales in a closer radius than a suburban market.

Starting with 6 months back and 1 mile out is a good start. You can adjust the price of the sold comps and expand your search to 9 months and 1.5 miles, or 12 months and 2 miles, and so on. Stay in the same housing plan, school district, etc.

Don't just look at sold comps, also look for active, contingent, and under contract listings. This will show you what houses are currently priced for, and you'll see what other homes buyers are comparing your subject property to. Check for any withdrawn and expired listings too. Listings are usually withdrawn or expire if they're priced too high.

Hi Mo, I work with investors and I can help you. Please feel free to reach out with any questions or anything real estate related that you need help with.

Hi Nicole, I just messaged you a referral. Best of luck with your flip!