All Forum Posts by: Andy Madden

@Ryan Fish, I will contact you directly with some more information. 

@Anand S. - I just sent you a direct message with some information that might be helpful.

@Naveen Desai please feel free to send me a direct message with the address and I'd be happy to let you know my thoughts.

@Mary Jay

I will send you a direct message with some information that may be helpful.

@Tim Rostro I have used this approach to fund the full purchase or down payment for several duplexes and triplexes in Pittsburgh. While it is a "loan for another loan" as you said, if done responsibly it can be a terrific way to grow your portfolio faster than you otherwise could with your savings. Before I utilize funds for my line of credit, I think about the worst case scenario for the property I want to buy, as well as the properties I already have in my portfolio. If I can still meet all my debt obligations and expenses in the worst case scenario, then I move forward with purchasing the property. 

In using this approach of looking at the worst case scenario, consider running a model where you have 50%-60% occupancy in your existing units, interest rates go up 2%-3% over the first 5 years of the loan, and (if there's rehab) that the costs are 25% above what you estimate. If your portfolio can handle these types of occurrences and you can still make your HELOC payment + other mortgages and expenses then I think you should feel comfortable moving forward.

@Abel C.

I reached out to them about a month ago to inquire about having them manage one of my 1BR apartments as an Air BnB. I filled out the form on their website twice and then finally emailed them because I never received a response. It took about a week after emailing them before I received a response saying they don't work with my type of property.

I ended up renting this unit to a tenant on a 1-year lease, so it all worked out. However I was very surprised to hear that they wouldn't manage a fully remodeled 1BR/1BA apartment that's within a 10 minute walk to PNC Park, Heinz Field, etc. Please share your experience if you reach out; I'll be anxiously following this thread!

@Account Closed more. I have a small portfolio of 5 multi-family properties in Pittsburgh, and I have a decent understanding of the Philadelphia market based on family visits over the years. The cash flow in Pittsburgh is significantly better.

@Cody Williams

I think it may be helpful to understand in more detail what you mean by "quality" investments. If by "quality" you mean a higher-priced property in a better neighborhood, it's certainly possible to achieve this in Pittsburgh. That's not to say you can expect to easily find a property in Shadyside on the MLS and expect it to generate positive cashflow with with a 20% down payment, but I personally have 5 multi-unit properties properties in what most would consider to be A/B+ neighborhoods, all of which generate >$1,000 cash flow/mo. after debt service. It may require networking or finding off-market deals, but it's definitely possible!

@ John Steffen

Congratulations on taking your first step in real estate! I was in a nearly identical position when I graduated 7 years ago. It's great you're taking the time to think about the type of property to buy, because the criteria you use now will be helpful in expanding your portfolio in the future. Here are the criteria I used when buying my first triplex:

1. I completely agree with @ Jim K. about building a building without structural issues. The last thing you want to do is dig yourself into a financial hole by buying a property that requires a new roof, new wiring, new plumbing, etc. 

2. Buy a building in which one unit is vacant (live in that one) and one or both of the other units (depending on duplex or triplex) are already rented. I know some people don't like buying buildings where tenants are already in place, but I believe cash flow is king in real estate, especially when starting out. If you're able to collect rent from another unit to help pay for the mortgage and renovation costs starting on Day 1, not only will this help to fund your renovations , but it will also teach you to be a landlord. 

3. As @ Jim K. said, do some of the renovation work yourself. It took me about 10 months to renovate a 1,000 sq. ft. 1BR/1BA property because I did much of the work myself, but I don't regret that. Since then, I've been able to re-use my knowledge from that renovation to buy the right materials for my other four multi-units, communicate with and manage contractors confidently, and take care of routine maintenance issues when they arise. 

I repeated this pattern for my next four properties (with the exception of living in one of units), and it has worked pretty well. Pittsburgh is definitely a market that makes this strategy feasible.

Best of luck!

I second Jeremy. I would recommend @Alexander Hamilton.