All Forum Posts by: Sean Bayliss

Take a look at the Colonie, NY market.  Taxes are relatively low, neighborhoods are generally safe, and my tenants have been great.

Personally speaking from experience, I would follow the deal through and eat the $400.  If the deals falls through the expense will be greater as your holding costs will be greater to get the house under contract again.

Hi Daniel,

The Lehigh Valley which consists of Easton, Bethlehem, and Allentown in Pennsylvania is a great place to buy right now. This area is home to 823,000 people, the 3rd largest metropolitan area in PA, and has the fastest growing population in the state. Over the past two months I've purchased 2 deals of the local MLS. Details below:

2 unit purchased at $115,000 and appraised for $125,000 (8.69% upside)

2 unit purchased at $142,500 and appraised for $158,000 (10.8% upside)

Each property is yielding an 8% cash on cash return.  Although not the 10% return or higher I would ideally like to see, the annualized return made up for the difference in the upside appraisals.

The market here is hot, but if you are quick to see a deal as soon as it hits the MLS, and have an attractive offer, I've been able to see pretty good success in this sellers market.

Best Regards,

Starting in the real estate game in the spring of 2010 I would consider myself a small time investor. The first deal I completed was actually the first house my wife and I bought for $150,000 in Albany, NY. This charming bungalow (as listed by the agent!) is a 1142 sq ft house with 2.5 beds/1 bath. In 2012 I bought my first duplex for $40,000 in upstate NY. Lastly, this past summer I bought my most recent property in Easton, PA. This house is also a duplex and was $102,000. Three houses and 5 units in total I have completed 3 deals. Fast forward to 2018 and looking to scale, I've found another investor who wishes to diversify from the stock market to real estate. Here are the hard facts of what we are trying to accomplish as a start up LLC:

Total start up capital: $100,000 ($50,000) each

Cap Rate looking for: 8-12%

Property Size: 3-10 unit multi family

Total Loan: $400,000 (20% down using portfolio lender for $500,000 total)

Questions I have for the local Allentown real estate investors:

1. What are the typical cap rates you see in the Lehigh Valley?

2.  Are there any wholesalers out there looking to get rid of a similar property we are looking for?

3. Are we currently in a buyers market or sellers market?

4. Can you recommend a good property management company?

5. What maintenance rate, vacancy rate, and cap X rates are you using?

Thanks!

Hi Kyle,

I borrowed off my employer matched 401K to finance my first duplex.  There were several pros and cons to this type of borrowing.

Pros:

1. The fee to borrow off my own money was $75.00.

2. I borrowed the money at 4% interest which I pay back to myself and the principal amount of the loan.

3. Repayment of up to 10 years (I payed the loan off in 2 years).

Cons:

1. You lose any gains in the stock market on the amount borrowed.

2. You lose the compounding interest effect of the money borrowed over time.

3. If you fail to pay the loan back the IRS will tax you 10% off the bat and then tax you again at the end of the year.

Hope this helps and best of luck!

Hello Bigger Pockets Community,

Just recently introduced to Bigger Pockets through a Youtube Search, I'd like to take a moment and tell everyone a little bit about myself.  Originally from Upstate NY, I currently reside in Bethlehem, PA.  Currently I have two rental properties in upstate NY; a 1 family property and a duplex.  After moving to the area for work I recently bought a primary home as my third property and now am looking to start investing in the Lehigh Valley.  I'm looking forward to networking in the local area and outside the area to possibly partner on a deal or find my next rental.

Best Regards,

Sean Bayliss