All Forum Posts by: Chris Mylan

@David Johnson

Another simple solution is to partner with someone who has enough W-2 income to buy at that price point. Combined, that will put your DTI back in favor with the bank's "formula."

Hey @Jason B.,

Magnolia Plumbing has done some good work for me with a hot water heater and some general pipe work. Very professional and will do the job right. I also got a quote from them to snake a main sewer drain and it came in very high. Might be worth giving them a call depending on the scope of our project.

Hey @Derek Persuit,

Small world - hope you're doing well!

I'll PM you with a hello message, but I agree with Brent and David. Those numbers are very tight for a BRRRR.

Lots of better deals out there that will require that same amount of repair costs and can net you a higher return. 

I just refinanced a house in South Side if you want to compare notes. About the same rents and comps as Mt. Washington. 

Welcome Josh! I'm originally from Ambridge and do some investing in the Pittsburgh area. I would suggest reading a lot of the free materials such as the ultimate beginners guide and various other free deal analysis forums/ resources BP has to offer. 

Beaver County is definitely a great cash flow market and has affordable houses that newer investors can take advantage. Feel free to reach out and welcome again!

@Sara N. - Thank you for the kind words. I'm always looking and attending open houses to see if I can get a bargain somewhere, but it looks like I will be waiting it out over the Spring and Summer, as well. Too much competition this time of year with flippers and the margins on deals are already tight to begin with in DC.

The only exception I'll make is if I can find a condo or a one/two bed house that would allow vacation rentals. I know most HOAs do not allow such a thing, and as you said, competition makes this difficult, but it really makes the numbers work in one's favor if you have the time and know how to operate that system.

Until then, I'll be enjoying the spring weather and I hope you do the same!

I do not with foreclosures, just be mindful of any tax liens. Be sure to do a thorough and realistic evaluation and you will be alright. Numbers don't lie.  Good luck!

Hi Corey,

I think you should aim to be more specific with where you're looking to purchase and what your overall budget looks like. In the city (ie. South Side, Oakland, Lawrenceville, Mt. Wash, etc), you probably should aim for $100 - $200 per door, but you should get some nice appreciation in the coming years. In general, I have seen people hit the 1% rule and be successful - for example, $100,000 purchase/ remodel and you get $1,000 in rent per mo. Outside of the city in the smaller communities, you should be getting a little more cash flow per door, maybe $200 - $400, but will not see much appreciation. For example, there are duplexes in my hometown of Ambridge that sell for $40,000 and rent for $1,000 per mo, but will be worth $45,000 in 20 years. Hope this helps!

@Adi Lutvich Yea, unfortunately Columbia Heights is a popular place right now. You really only see totally rehabbed $700,000+ places, or total shells for $500,000.

I found this one on Realtor.com, but I never got a response from the listing agent. I literally walked to the front door and starting talking to the owner to get things moving.

@Account Closed Thanks Bobby - I would love to move back to Pitt in a few years, just have to build the foundation here first. There's a couple nice BRRRR options down there now that probably need $30k - $40k worth of work if you're looking for a project like that. Good luck to you as well!

I have two main goals of posting today 1) To let folks know that it is possible to successfully invest in higher priced cities with little money out of pocket, and 2) To build relationships so that I can partner with other individuals and acquire properties that perform at or above a 12 percent Cash on Cash return (whether through private lending or a structured partnership).

Since moving to Washington, DC six years ago, one of my major goals was to break into the RE investing space with a buy and hold property. With the costs to enter this market, this proved to be easier said than done; however, five months ago, I successfully bought, renovated, and rented my first DC property.

Here is that story-

Before getting further, I have another property in Pittsburgh, so I had some experience going in that made this possible. That post can be seen here:

https://www.biggerpockets.com/forums/223/topics/37...

I had been looking for a property in DC for a few months, probably searching and quickly running the numbers on over 1,000 condos and SFHs online and personally viewing ~30 houses/ units. The market is expensive, so the numbers really have to work as an investment. For that reason, I was only viewing three and four bedroom units as rents could cover (and hopefully exceed) the various expenses. I found a SFH in the Columbia Heights neighborhood listed at $625,000 three bed (and an English basement), three full bed and acted. It's a 10-minute walk to the subway and accessible to many restaurants, shops, bars, and I would call it a B+ neighborhood.

As an aside, it's nearly impossible to get a small multi here. Bigger fish investors pay higher than asking and cash for those properties. Short of getting inside information, I was priced out of that often profitable market.

Eventually, the agents, owner and I worked out a deal where I would pay $635,000 for the property, but he would cover $35,000 in closing costs along with some repairs before I moved in. This was advantageous because I could put down less liquid capital. I also bought through an FHA loan, so I ended up spending only ~$25,000 to acquire this property.

Time for the renovation - the two upstairs floors were manageable; time, effort, a lot of paint, and some minor fixes (thanks YouTube!) got the three bed, two bath rent ready. However, the basement was a disaster - asbestos floors, some plumbing and appliance issues, holes in the wall, etc. It was almost a complete gut job. However, in the end I think it turned out great!

Overall, I spent ~$15,000 to renovate the entire house. This does not include the many, many hours I put in myself, but it was well worth the time and effort after it was all said and done (while working a full time job I might add).

Today, on a per month basis, I collect roughly $6,000 -$7,000 in rent and have on average $4,000 in expenses - not a bad cash on cash return. This includes the $1,300 I "pay" myself to live in one of the bedrooms (that's what I was renting at before). And utilities are split four ways to keep expenses low.

One major advantage to living in such a transient, tourist-popular destination is the money I have made through AirBnB and other vacation rental sites. I rent out the English basement and one of the upstairs bedrooms on these platforms. Some months, I am getting 2.5x the amount of income from a traditional long term tenant. Yes, there are more costs such as furnishing, cleaning, management, etc., and I do most of the cleaning myself (but have used crews when I cannot get out of the office), but the profits far outweigh any costs or time I put in.

Thank you for listening to my story and if you have any questions, would like to dig into the numbers more or see pictures, please feel free to message me. I look forward to the community’s feedback and meeting like-minded people!

-Chris Mylan

Hi Scott,

Congrats on your first property! Seems like it is going well for you. I actually grew up in Ambridge, Pa. and have a property in the South Side, so I have knowledge of the area and am always checking for favorable deals.

Aside from notes, turnkey opportunities, and vacation rentals, it seems to me like you have you have two options that would fit your lifestyle and goals. This is just a short summary for both. Message me if you want to talk in more detail as I would love to get more specific and compare notes.

1) Rinse and repeat - Find a comparable property (or two/three) in Beaver County, put down 20 percent and collect the cash flow. The area is great for collecting cash flow and cheaply building a portfolio. I would look for a small multi in Beaver Falls, Monaca, Hopewell, etc. I've been seeing duplex/ triplex's selling between $30,000 - $60,000 and getting rents above $1,000.

These properties will more than likely never appreciate and the quality of tenant is suspect, but rents will rise with inflation and finding something that hits the 2 percent rule is commonplace. Just make sure to run your numbers correctly as you did with the Ellwood City deal and you'll get another great cash flow property.  

By putting more down on these houses you'll probably be able to get a HELOC for your next deal as well. Something to consider as you think about your next move down the line.

2) Go to the "big" city - As more individuals are moving downtown, there's a lot of opportunity to snag a house now before prices soar (look at Shady Side Lawrenceville!). Many college students and young professionals need a place to live in Oakland, South Side, Mt. Washington, etc. and you can find a place for roughly $100,000 that needs less than $10,000 in repairs. You'll probably be getting less than $1,500 per month in rent - so not great for cash flow, but I would anticipate these places appreciating greatly in the coming years. Of course it's speculating - but if you buy for $100,000 and sell for a substantial amount more you'll make more than you ever could with the nickel and dime "cash flow" approach in option one.  

Both are good options that can easily be held for years to come. The cash flow vs. appreciation decision is one that many investors need to make.

Just my two cents, but good luck in your endeavor!