All Forum Posts by: Monico Lorenzana

I want to purchase an investment condo for $150,000.

I want to get Heloc loan from my other investment condo for $50,000 and use it as downtown payment for this condo.

Can I get a 30 year fixed conventional loan for $100,000 and use $50,000 for down payment from heloc?

I also want to combine it to one $150k  30 year fixed loan instead of having two separate  $100k and $50k loans 

what options do I have can anyone help.

I don't want to use my own money.

@Matt Cecala Hi Matt and everyone else here. Yes Pittsburgh is a good choice for Investors who either live here or are remote as the buy-in is a lot more conducive than other more saturated markets. You can certainly find a property for cash flow that may also bring you a strong return on that investment. However, if you don't know the layout here, it's best to get with those that do as properties change street by street and sometimes even on the same street. I've lived here my whole life and have really seen a dramatic change in this amazing city. 

Hey Matt, and Happy New Year. 

I'm presently a facilities engineer by trade, who does some construction and maintenance for landlords on the side, hoping to get back into the private real estate game. I used to be a landlord and flipper in New Zealand until a couple of years ago when I liquidated my portfolio and moved out here to Pittsburgh. I'm just buying my time and making some connections while I build my credit history again - worst part about moving country haha! I'm always down to chat to people about REI, especially in the Pittsburgh market.

This is some research I did a while back about the ‘Burgh. I have learned many new things about the market – most of which is very good!

1. Pittsburgh ranks #5 on Marcus & Millichap’s list of high-yield multifamily markets.
2. Pittsburgh’s unemployment rate (4.7%) has dropped by 17.5% over the past 5 years.
3. Pittsburgh is experiencing a demographic shift. Their millennial population has seen a 25% increase over the last 5 years and the baby boomer population has grown by 13%. These two demographics are projected to be long term renters which will help keep vacancy rates low for years to come.
4. In recent years, Pittsburgh has become a tech hub in its own right, attempting to create a dynamic job market similar to Silicon Valley.
5. Pittsburgh is home to many major universities including the rapidly growing Carnegie Mellon University which is “at least partially responsible for Pittsburgh’s growth, from revitalized neighborhoods to a vibrant and booming restaurant scene.” Carnegie Mellon creates “$2.7 billion in economic impact each year”. Marcus & Millichap’s report also mentions the importance of universities to Pittsburgh’s rental market, “The considerable number of universities in Pittsburgh will provide a diverse hiring pool for the area’s growing tech sector in 2017 and beyond. The metro’s unique road system has attracted companies, including Uber, to test new automated car technology, bringing many high-paying jobs to the area.”
6. Marcus & Millichap bullishly forecasts continued increase in rents due to stronger demand and higher incomes. The analysis also reports that new multifamily development will “remain near the average recorded over the past five years”.
7. Integra Realty Resources’ 2017 Commercial Real Estate Trends Report ranks Pittsburgh #2 on its Top Markets by Multifamily Transaction Volume Based on YoY Change.
8. Pittsburgh’s rental vacancy rate has declined by 25% over the last five years.
9. Pittsburgh is booming with developments (see reference #6), “there is no better place to be a developer right now than in Pittsburgh. If you look at the demographics of the city, we’re not growing but we’re rapidly changing”.
10. Large institutional money has not found the Pittsburgh market yet. Most owners are local and therefore “hot” money or out of area players are not yet chasing Pittsburgh assets, keeping prices favorable.

References

1. United States Census Bureau
2. http://www.cmu.edu/news/stories/archives/2017/august/economic-impact-report.html
3. Marcus & Millichap 2017 Multifamily Investment Forecast
4. 2017 Commercial Real Estate Trends Report by Integra Realty Resources
5. http://www.pittsburghmagazine.com/Pittsburgh-Magazine/September-2017/Staying-CMU-All-Eyes-on-Carnegie-Mellons-Future/
6. http://www.nextpittsburgh.com/features/pittsburgh-developments-watch-2017/

@Monico Lorenzana

The types of units that attract long term tenants in multifamily are the townhome style units, and if they have garages, a big bonus. It feels as if the shift to more of an apartment home is what helps with tenant retention.

Having amenities on property, such as dog parks and fitness centers, help with retention, and being close to amenities also helps.

I think the same can be said for most smaller multifamily, with having washer dryer hook ups, 2 to 3 beds, at east 1 1/2 baths, if you have some privacy for a yard would be a huge bonus.

I really would stay away from pools for small multi families. The cost and the insurance is not worth the extra rent.

Gino

@Monico Lorenzana - I think it's great you are starting out in REI. Good luck on your journey. Now, if you want the blunt truth, I'd recommend you look at another location for OOS investing. Right now, the market here is brutal and at a standstill. Why? Overbuilt MFH, the vast majority of STRs being converted to LTRs in the past year due to law changes, and rent amounts are currently outpaced with what properties are selling for. Personally, we are on pace to sell more properties this year than the number of acquisitions for the first time since I started doing REI in 2017. To answer some of your other questions in general about Huntsville, there are almost no basements here, and you never want a pool for a rental unless its an STR, which are now forbidden here without proper zoning and permitting.

@Kerlous Tadres - just as an FYI, duplexes basically don't exist in Huntsville relative to the number you may see in your home city.