All Forum Posts by: Anthony Angotti

 We don't always include the financing contingency, but are just prepared to lose hand money if that goes south. Depends on how competitive the deal is. 

That being said I think if you don't have a relationship with a lender it's hard. It's a bad time for people who like to bounce around from bank to bank compared to people with well established relationships. 

They also like to see deposits. If you have money in a deposit account with the lender they generally will be more receptive to your situation. 

Ask you lenders what they want to do deals before you have a deal and things will go smoothly. The bigger presence that a specific lender has in the area of the property the better also.

@Imtiaz Koujalgi

Are you local? Taxes in Wilkinsburg can be a killer. It's also fairly street by street so you'd want some advice on specific places when buying. 

Forest Hills has some decent pockets. I'd say target places with a lot of owner occupants when looking because those streets will tend to be a bit more stable. 

It's close to the highway so you can get tenants with decent jobs. That being said tenant quality is more to do with screening than area. It's not a high income area for the city though so a lot of your applicants may apply with vouchers and you might need to make exceptions on credit reports. If you can get good at this part of the business with your screening and working with voucher programs it's not a bad area to be as far as cash flow. A

As far as other zip codes, what are you looking for, and what's your price range?

 Welcome to the community and Pittsburgh is a good rental market. Where in Pittsburgh are you from? That's probably a good place to start with because even though it's been a while you'll be more familiar with the area. 

 There are more resources for someone investing out of state closer to the city as far as property managers, contractors, etc. 

What has you looking at Beaver County specifically?

Edit: I noticed our comment about being local. I think generally if you focus on neighborhoods that are more owner occupied than tenant occupied you generally will have a smoother experience. What neighborhoods are you targeting?

 Best place to start is where you live. Best way to start is by house hacking. 

If looking out of state your team is more important than the market, but what are you looking for as far as properties. Appreciation, cash flow, etc. That would help dictate what markets to focus on. Also your purchase price that you can afford. 

You just can't have two FHA loans at one time (unless some specific conditions exist, namely how far from the original your new house is).

You'd have to refinance out of the existing FHA loan and into a conventional. So you'd want to add enough value or accumulate enough cash in hat time to get a conventional loan after the initial year.

There's more info you'd want to talk about with a lender, but the above is usually the path.

 I somewhat get what you're saying, but in this market you won't be buying much. 

You really have to project forward a little. This specific deal is probably still a pass, maybe not. Would rental comps be higher if you renovated the units? Was that projection based on as is condition?

It's great to say I offered what it was worth as it stands now, but a lot of the time you're going to be passing on opportunities that would be a great deal in 5/10 years with that mentality. IMO too many people listen to podcasts/read articles that focus way too much on the numbers at purchase. Real estate is still a get rich really slowly game. Usually also don't factor in the wealth creation parts of it too when they use most calculators. For instance, debt paydown (by the tenant) increases your equity. In 5/10 years you pull out that equity with a tax free refinance. People say appreciation is speculation, and value appreciation can be, but rent appreciation?  Values cycle, swing, etc. Rents generally, just go up. Sometimes slowly, sometimes not at all, but they hardly ever go down. Over the past 100 years there's very few examples of rent values falling drastically. https://www.in2013dollars.com/...

In a market like this it becomes how can I add value to make this property work and then what can I pay given that I am going to be adding value. You don't find a good deal you make a good deal. 

Some of the places I bought 5 years ago I know for a fact 80% of the people on these forums would balk at when I bought them. Now they cash flow pretty well and offer a good alternative to my stock holdings. Not to mention I've refinanced all of my initially invested cash out at this point. 

I saw some comments that said that they laugh at "below market rents" because the seller is going with a list price for a building with at market rents. That's just not factual, they are being listed based on comparative sales. Similar condition, unit count, etc. It's residential real estate when it comes to 2-4 units. The more units you have the more you can do an income approach, but no matter what you are going to be paying for "potential" in a sellers market. Same goes even for commercial real estate which is usually valued more on the income method. 

 A lot of the places I bought in the past had way below market rents and I still paid what they wanted. Because I knew that it really wasn't that hard to get the building to market rents. Within a year and easily within 2 you can have a building at market rents and ready to go for the long term. They aren't listing it at a price for a property with market rents, they are charging a price based on a comparative sales analysis. I still pass on a lot of deals too, it's fine to pass, but you also need to consider what you're going to turn it into just as much as what it is currently. 

 I agree that a PM is more expensive than doing things yourself, but unless you are from the area and know the $100 person you speak of I wouldn't trust them as far as you can throw them. 

$100 is getting most people to the door for someone that doesn't either give them a ton of business or is employed by the person giving them the $100 directly. Even though the PM is more expensive part of the reason you have them is because they have enough doors under management that they can even find someone that will show up for small repairs and given them enough work to keep them coming back. 

The small job handyman is one of the hardest things to find. Even worse if you aren't local. I am local to my portfolio and ended up hiring my own employees because this was such a hard person to find consistently and reliably for the long term. 

 Apartments.com bought Cozy which was a good management tool. I assume their current one is now similar. 

That being said this is a bad idea. 

 I house hacked for years! It helped save up the money to accelerate traditional RE investing. I now own over 100 units, mostly commercial. When it comes to house hacking don't worry so much about the cash flow. OBVIOUSLY you don't want to be so negative that it kills you, but if you're only a few hundred under your expenses you get a super cheap place to live, like you said. Also, if you buy in a pretty valuable neighborhood you basically get a good asset for low money down that will appreciate well AND cash flow well after you move out (Assuming you live there for a few years). 

Real Estate really is a get rich slow game. Don't forget it. Value appreciation, rent appreciation, and principal paydown are still the MAIN drivers to wealth creation in real estate.