All Forum Posts by: Matt V.

I've thought about Pittsburgh. I don't dislike the idea, I think there's a much higher likelihood for cash flow... and I visit every few months anyhow for Pens, Pirates, and Stiller games. I would just be turning those into 'business trips.'

But I don't think I'm comfortable making my first deal a long-distance one, just because I think learning the ropes locally will be important for me, physically watching the process with a team and community I'm already comfortable with. Longer-term though, if this is right for me, I'll be interested in da 'burgh.

@David M. I don't have a whole lot of insight into the market there, but in general, anywhere a Wegmans or Trader Joes or the like pops up, I tend to think of it as a positive sign for an area. They're like anti-WalMarts. Then again, I agree in that (as an outsider) I see Lancaster as having the exact same economic problems as much of central PA. Buying homes near a proposed Wegmans site may be a good speculative plan, but I call that -speculation-, not -investment-.

@Dennis Walter, yes, "cheap" is relative. I live in a nearby town because I didn't want to pay the ~30% premium to be in SCASD. I was thinking "cheap" nationally - housing is the primary reason our cost of living index is so low in Centre County.

@Brian Johnson I was thinking Bellefonte may be an option... my worry with much of Philipsburg, Williamsport, Lewistown, etc., and almost as true in Bellefonte, is (1) houses are old and falling down and (2) there's no economy, so I can't imagine rents are very high.

That's my biggest worry in central PA - the economy, Penn State aside, is not very strong. Wages are low for even skilled workers (even relative to cost of living), but most of the economy is service-based and low-wage. Fixing up houses may not be supported - wages aren't high enough to support higher rents. So maybe aiming to turn around and sell rather than rent long-term would be a more appropriate direction. 5% ROI will not entice me.

Hello BP!

It looks like the 'cool thing' to do here is to introduce ourselves to the community, so I'll take a second and do that. 

I'm a central Pennsylvanian, near State College (home of Penn State). I am looking to get into the real estate space through rentals. I'm heavily invested in equity markets and have leftover cash flow from my 9-5 today as an engineer, and I'm thinking of diverting some of my monthly net into real estate rather than stocks. I've done the math several times and am convinced that real estate is often a better investment than broad stock portfolios. However, I'm a big proponent of having deliberate processes and taking time to learn before jumping in, so at the moment I'm assembling a group of advisers, reading books, and diverting money into a down payment fund (rather than just moving money, to ensure I give myself time to learn).

My goal is to have several thousand in cashflow in 20-25 years (I'm 30). I do not need the cashflow today, and would likely reinvest what I would receive. I enjoy my job but would also like to have some feeling of controlling my own destiny and have the ability to make decisions about my future as I see fit.

As I see it, there are two primary classes of rentals in my area: college students (which can be split into undergrad vs. grad students) and lower-income (in surrounding neighborhoods). There are some short-time support staffers who may have rentals, but in general real estate is cheap so even short-timers may buy homes.

I tend to believe the 1% rule does not hold here, but that's where I am in the process: learn what the advantages and disadvantages of the different classes of rentals are here, and learn which type of market I'd like to focus on first. Goal is to find a first rental in 2017, assuming the numbers I plug in still convince me it's appropriate.

Maybe I have something to learn here as well, but I believe 3.5% down loans are generally only available as FHA loans, and I thought FHA regulations stipulate that the person financing the home needs to live there? i.e., in the first scenario you provided, you would have to live in the home for some period of time, you can't just "repair it and rent it out," you need to live there. You can use FHA for a duplex and only live in one half, though.