All Forum Posts by: Kyle Kerekes

Hey Edwin - I've been in Scranton for most of my life. Feel free to message me with questions and I'll do my best to get you the right info and/or connections

Hey Justin, awesome to see more young people in Scranton interested in real estate.

Sounds like you have a nice potential deal - other than the conversion back to a 2 unit, what repairs/improvements does the house need? Do any major items need repair/replacement? (roof, foundation, mechanical systems, etc) If the current as-is value is accurate at 95k and you can buy for 50k you have quite a bit of room to play assuming there is even more room for adding value. I would put a few different scenarios together and run numbers to see what might work. 

One example scenario might be getting an owner-occupied loan with 5 or 10% down, living there during the conversion (assuming you're comfortable with that), and then refinancing post-construction to pull the equity and put into the next deal. Another angle entirely could be wholesaling it if you can get such a steep discount.

There isn't going to be any 1 specific way to do the deal that is "right" or "wrong", it's more of a matter of what you're comfortable with and capable of with the resources at your disposal, which is one of the coolest things about real estate.

Hope that helps a little, feel free to message me about Scranton-specific stuff. I'm no veteran yet but I know a couple of them!

@April Munoz no need to apologize, that's a fair question!

As I said, I was partnered with a friend and we were in college at the time. Around the end of junior year, people started making us offers out of the blue. There was a lot of uncertainty about where each of us would be and what we would each be doing post-grad. After a lot of consideration, we decided it was our best choice to get rid of it with the idea that we may continue the partnership in the future, but if we did it wouldn't be in student housing anyway.

Looking back, I wouldn't have done anything differently. I'm glad we got out when we did. Sure we could've gone the route you suggested, but I still have no desire to be in student housing regardless of the typically higher cash flow because it was just a major pain in the neck. As you said, it all depends on the individual and circumstance :)

Like @Victor Steffen my first deal was in Scranton too! Freshman year of college a friend and I wanted  to try and wholesale a student housing duplex that was listed on Craigslist, we told two potential buyers about it and they wanted nothing to do with it. So of course we wanted to give up lol.

I had the crazy idea to borrow money from family to buy it. We negotiated from $300k ask down to $250k purchase, put about $5k into minor repairs and upgrades, held for 2 years at about $38k/year cashflow, sold for $285k.

Easily one of the best learning experiences of my life!

As with most markets, if you're providing nice clean units, you screen tenants properly, and you treat people well, they will generally be good to you and your property. That hasn't only been my experience, it's also advice I received from a local developer who has 400+ units here.

My advice to anyone just looking to buy cheap places here and throw anyone in there just to collect a check is to stay out cause we don't need that. There has been a lot of exciting development/improvement in Scranton in recent years, particularly downtown and the surrounding areas!

I'm not as familiar with WB, but Scranton is a good market for cash flow rentals. Taxes are high, but purchase prices are low and rents are fair. Expect for most properties to need at least minor improvements cause there are a lot of old buildings here.

Hey Jarod - I had a duplex in the Hill Section for two years that we rented to students. They were renting "by the room" but the lease was joint and several, cause we brought in the groups altogether. If it's an option for you to bring in one group together for a joint and several lease, that may be easier.

As far as the unrelated adults thing - last I checked it is in fact an issue, kinda. I believe by code we weren't supposed to have more than 4 unrelated adults per unit (one side had 5 one had 6). Luckily with my property, we were surrounded by other large groups doing the same thing, and we were never bothered about it.

There are so many different zones in the Hills, I'd recommend getting the zoning map, should still be on the county website, and digging in to find out what it says for the property you're considering.

Hope that helps a little, feel free to hit me up with your questions.

I can't speak on GA but I can tell you that the rental market in Scranton is generally strong. During college, a friend and I bought a duplex for student housing. We kept it for 2 years and never had a day of vacancy, and no major disasters. Sold it for a solid premium too! 

I'm now a year into house hacking an up/down duplex in Scranton with my brother, and our upstairs unit was leased within only a few days of listing it. People shy away from buying in Scranton, but the properties are generally strongly-built and very affordable which is nice for cashflow. The entire interior was gutted and remodeled in 2013 and we still only paid $70k for it. Only work we've done was exterior for the most part.

If you're more interested in rentals, Scranton really is a solid market both by my (limited) experience and from what more experienced area investors have told me. Fix/flip is more ideal outside of the city borders.

Hope that helps a little!

@Larry Fried thank you!

@Andrew Feil thank you very much, will do!

 Thank you very much, I appreciate it!