All Forum Posts by: Marcus Geiser

The reality of “bad” neighborhoods in Pittsburgh is there is still money to be made. It all comes down to your strategy. Even in these neighborhoods there exist people who grew up there, have family there, and don’t want to move elsewhere.

This creates a value proposition. Homes are cheaper, often $5K to $15k to purchase with ARV of $75K plus. The renovations when completed quickly and with off the shelf materials can be resold to owner occupier or as a rental often with Section 8 in mind. $25K profit is not a great amount but as ROI is fantastic.

I have completed many of these deals and they work. At least for me. They are good fill in deals. We have done them as JV projects just to keep cash flowing, half the materials are leftover, clearance, and whatever we can find.

Oh, if you look on the Allegheny County assessment site you can see the home sold for $45,000 and later for $355,000. This is how I began to analyze deals. Work for investor. Look up info on house and see the bought and sold price, factor in my work as contractor, and I could see the profit potential. 

Here is a picture of the oldest house I ever worked on. It was a basket case. The were 7 layers of roofing. We tore the roof off the house and demo’d the entire structure to the facade you see here and 8 feet on each side. I poured the new foundation for the addition of 2500 SF in the rear, framing, layer some block, and other work for the first half of the project. The place turned into a Mexican War Streets beauty. 

Here is a link to the finished project when the investors I worked with on this one completed the project.

https://www.zillow.com/homedetails/110-Sampsonia-Way-Pittsburgh-PA-15212/11388591_zpid/?

I have remodeled many of Pittsburgh’s older homes. They can be challenging. Knowing what you are getting into is a great help. The demo process with plaster lathe is filthy and produces a great deal of debris. The older plumbing can just disintegrate in your hands at the slightest touch. Running new wire to replace knob and tube, cotton jacketed, or NM can be tiring. Oh, and the terra cotta pipe. All these obstacles can be opportunities. I always have a sewer camera inspection done before I buy. If they look bad I ask for a reduction in price. The other stuff requires planning and if you have a contingency budget in your rehab plan everything will go fine. 

I personally like to older homes in worse condition or homes with structural problems. I have a background in construction. Those larger scopes of work are profit makers for me in the ARV.

Keep in mind the Pittsburgh investment area includes the surrounding counties. There is a steady amount of new homes being built in the suburbs. Check out Ryan Homes and Maronda Homes. Once you get out of Allegheny County people are commuting from Cranberry Township, South Hills, east in Murrysville, Penn Township. Those areas have a tremendous amount of new growth. We built decks on those new homes for years and the work never stopped. It is what also makes flipping in those areas attractive. If anyone wants to come here and see the area DM me I would be glad to show you my city. Always looking of new connections and JV partners.

Today I found a good target property. The house in relatively poor condition and has been vacant for some time. An associate of mine bought one on the same street. We went to go look at it today. I see the house across the street and begin talking to the neighbor. She tells me the owner has kind of abandoned the property. She then tells me the neighbor on the other side is battling the boroough over the houses condition. 

I talk to the "little old lady" next door and get the owners phone. 

Call his office and get an answering service. Left a message. 

I have his office address, and his home address. 

The last conversation the neighbor had with the guy was that the borough was on the guy to do something. The house needs $20k-$25K in repairs to be worth around $75K-$85K. The borough was threatening to demolish the home as many do around here for some reason. If they stay empty long enough the tear them down. I am a contractor so this house is an attractive deal for me as the circumstances can work. 

I would buy the house for less than $5000, the owner paid $14,510 in 1999. HOWEVER since the last conversation the owner from Georgia has with the complaining neighbor was if they want it down find a contractor and have them call me. 

Once I get in touch with the owner I am planning to offer to either take the property off his hands and handle the problem at no cost to him or a slight cost. Offer to take the property outright, or buy. Either way he is an older retired medical professional with a home in Pittsburgh, Pa while he lives in McDonough, Ga. 

I had a friend skip trace the guy and found very little useful information. I am still digging an will update as progress or lack there of is made. 

“@Tim Oppelt”

I have experience in my market. I have been involved in the renovation side as the contractor. I have a good base of REI knowledge. I appreciate the advice. PPC was amazing for remodeling. I'll hold off on testing it out for a while. My focus will be signs, d4d, and cold calling for now.

"@Jonathan Greene"

I have 25+ years remodeling experience. I rehabbed my first property in 2004 for an investor. Since then I have been the general contractor on a couple dozen projects. The renovations have been simple lipstick renovations and full on guts with additions and architectural drawings. I have worked with structural engineers on fire guts, handled mold remediation, and repaired water damaged properties. As far as estimating costs I can consistently hit good numbers. In addition I can see the problems behind the wall from experience. 

I have worked with a number of good investors and can market deals to some of them. I have a partial buyers list in my phone. Up to this point I wholesaled as more of a locator. Finding deals and passing them off for a handshake $500 to $1000 per property. In the event I cannot assign the paper or find a buyer I should be in a position to close myself toward spring. I do not anticipate not being able to close a deal because I have never had a problem before. 

My plan to generate leads is as follows:

1. Driving For Dollars

2. Business Cards with large font WE BUY HOUSES on back, left everywhere.

3. Flyers Printed WE BUY HOUSES posted in visible locations

4. Networking in general many leads come from just striking up conversations. 

5. Driving Traffic to the web site with AdWords (SMART goals test)

6. Social Media Advertising (SMART goals test)

7. Yard Signs 12"x18" or 18"x24" around $200 the last time I got them for the construction.

8. I have some cold calling ideas and will post them after testing this isn't so much for wholesaling as locating deals for myself to flip around spring 2021. 

The $ARV is fairly easy for me to ascertain using online resources. I also have relationships with several real estate agents to confirm. I will be running comps past the agent who will be eventually selling my flips. A second opinion and confirmation is always a good idea. Furthermore I believe it is always better to over estimate repairs, and under estimate $ARV. As a wholesaler, bird dog, property locator it is important to make sure the deals you market are solid home runs. It is why people pay for them.

Locating property owners has never been a problem for me. I have a good number of resources here in Allegheny County. I have searched court records in the past. Talked to neighbors. Went to the local bar. If all else fails I have an actual skip tracer who does it for a living for advice or a quick search, they do call me with there handyman questions often resulting in a quick stop to lend a hand. One thing I have always been good at is building a network of people will to help me out. I first go the extra mile to help them most reciprocate those who don't aren't worth the time to type about. 

Additionally I worked with a group of guys who did the Fortune Builders thing. I acquired some good contacts through them and good understanding of the investment process. To date almost all my experience in real estate investing has been ears open while swing a hammer.

INFUSION OF CAPITAL: A good friend I have made money with in the past is doing very well right now. I was telling him of my plans and he wrote me a $1000 check and wished me luck.

I agree with what has been said above. I would make sure to send a letter that explains the expectations in very clear terms. I would also stop by and visit the tenant. People can be more reasonable than expected when asked to help provide a solution. In the end if there was a problem that persists I would then look into an area rug from somewhere extremely cheap, or a used piece of carpet. Only for the living area. The $100 would be worth it to me as a gesture of my willingness to solve the problem. Get the carpet and tell the tenants I understand kids need to play, especially with covid keeping us in. When I delivered the area rug I'd ask them to try to keep the kids playing in the living room. That is why I'd visit to ask if they like a carpet, then hit them with the keep the noise down request. In the end I don't like to spend money if I don't have to but I like continued BS even less.

My best advice is to read everything you can here. Over time it sinks and makes sense. Good Luck.