All Forum Posts by: Anthony Angotti

 Well. A lot of times permits add a lot of unnecessary cost with architectural drawings. For instance just to place a commercial tenant (no physical changes to the space) the Borough required us to pay $5000 for an architect to draw the space. 

Kind of dumb. 

It also adds a lot of time. 

I don’t mind permits when they are truly for safety but the local governments often overstep beyond just safety and it becomes a bit of a money grab ($500-1000). The problem isn’t the money to the local government though, that’s insignificant, it’s the money paid to professionals like engineers, surveyors, and architects when it costs as much or more than the project cost. 

For instance I’ve paid more than double the cost to have drawings and engineer reviews on projects than what I paid the actual contractor. 

When safety is involved I always do them. 

 Not sure at all but I don’t think I’ve seen anything of the sort in Pittsburgh. 

If you’re talking in city limits you might have a permit problem because they are ridiculously annoying to work with for even regular construction, outside of city limits though, especially outside of allegheny county I assume you’d have an easier go at it. 

 This time of year is awful. Once April hits it's a lot easier. General information as an agent that I follow applies to rentals as well. 

1. No inquiries no showings no applications: Your pictures likely stink, your apartment may be mislisted, your price is probably way too high. Everything in your presentation and pricing is likely bad. OR (possibly in your case) there's just no market for what you're offering where you are offering it. 

2. Inquiries, no showings, no applications: Your pricing is probably a little high, but not crazy high. You should review your pictures and marketing presentation, but it's likely OK. What you are offering (price/amentities) is likely not as good as your competition. 

3. Inquiries, showings, no applications: Pricing and marketing are good. Something is off when people come to see the place. Either it looks nothing like the pictures, or they expected better in some other way. You must collect feedback from showings or you won't figure it out. 

4. All of the above going well: Great job, but if you're getting blown up with requests and showings and applications it means you probably priced your place too low and you should consider increasing the asking the next time. 

A healthy price will generate a lot of inquiries, but only one of two applications in the first couple week. 

If something sits for longer than 2 weeks in prime leasing season you should consider adjusting price, marketing package, or easy to change amenities (appliances, include window AC, dishwasher, etc. you really need to review competing rentals and see what they include). Off season like we are in now (but right at the end of it) it's not uncommon for things to sit for 4+ weeks. Most landlords in Pittsburgh only end leases May through September (I do that). So people are just now deciding to renew or look for somewhere else. 

I hope that's helpful. Leasing isn't a perfect science, some places that I think aren't great lease right away and some that I think will go fast take more than a month. It's 70% what you do and 30% luck of the draw with who shows up. 

 Welcome to BP! If you have any specific questions on Pittsburgh I’d be happy to answer. 

Pittsburgh is a good market with good cash flow however the buildings are older so there will be a decent amount of maintenance over time. The more you spend up front on renovation will help you to reduce your expenses later. 

Do you have any specific questions about the market? 

There aren’t many awful neighborhoods, but if you hear anyone talking big cashflow it’s usually a D/c- type neighborhood, though there are still a few places with decent opportunities.  

 If he is working full time on real estate you’ll qualify as real estate professional for tax purposes. So you should talk to a CPA. 

Really in my opinion you’re overthinking it. You don’t need to make many changes other than filing your taxes differently and just budgeting differently due to the lack of one W2 income. 

Moving forward you might want to buy new properties in an LLC but for the original ones I don't think you need to go crazy making changes other than making sure you're protected well with insurance. A lawyer will likely want you to split them up to protect assets, but more so to make some money making entities.

For any new acquisitions though you'll likely want to buy in a new LLC just to create some separation between your personal liability and your rental properties.

There’s tons of things you can do, but you probably don’t NEED to do anything other than look for more deals to buy and likely buy those in a new entity. 

What are you looking for specifically. People are going to give you a lot of specifics on population growth, numbers, etc, but in my opinion the real answer with investing out of state is where can I invest in a place that helps me achieve my financial goals without increasingly my headaches dramatically. 

Also be wary of people who give you big numbers on deals. If you see big numbers in a true metro area it generally means that property is going to require a bit more attention (D class)

 In Pittsburgh the out of state investors I work tend to have the least amount of turnover and headache by investing in single family rentals in B class areas. 

The arguments for multifamily over single family make sense however you lose a lot of these advantages when you have to have a property manager for everything. 

A normal 2-4 unit has drastically more turnover than a single family house. This means that you are going to pay leasing fees more often and you’ll generally have more downtime since it usually takes longer to rent an apartment out than a full house in my experience. 

You get SOME advantage of economy of scale on a 2-4 units like sharing the roof, one foundation, etc, however single family tenants are generally more caring of the house. They generally feel like it is their home over just somewhere they are living. To the last point this means they stay longer. To this second point it generally means that the take a lot better care of the mechanicals and sometimes even fix minor things on their own.

These are all generalizations and with the hundreds of tenants I manage across my portfolio and property management there are obviously exceptions, but over time I’ve started to direct out of state investors more towards single family unless they have a good bit of experience managing out of state and know how to manage the manager so to speak. 

In Pittsburgh you can get a 2 bedroom house or a condo in a C/B- type area