Pittsburgh is an attractive place for real estate investors because of the low prices. However, those low prices don’t always translate to high profits.
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Pittsburgh can be a great market for real estate investors to get into. I probably get three to five calls a week from investors looking at properties to buy and flip here in town. Most of them think it will be a simple process, but it can become pretty complicated if you don’t have your ducks in a row.
More and more investors are coming into the market thinking they can get an automatic 60% ARV. However, if you’re using someone else’s money, you are only going to make a 20% to 30% return after paying the lender and vendors off. It’s like looking for a needle in a haystack. When there is a property out there with a possibility of a 60% ARV, every investor comes to bid on it. That drives the price up and the ARV down.
One of the biggest problems that investors have when flipping homes here is that they don’t have a lot of local connections. They think they can just hire any old person off the Internet to get everything done right. That’s a bad way to do business. You need to visit the area, see it, understand the market, and understand the properties you’re looking at.
A lot of agents in town that work with investors have the right contractors to help you achieve your goals. That’s why you should reach out to a local expert like myself at the very beginning. Nobody wants to buy a house for $20,000 that ends up costing $40,000 and is pieced together all wrong. I see it happen here every day.
Each micro market is different.
Having a local expert on your side means having someone with the experience to help you succeed. Adding new carpet, paint, and a kitchen won’t raise a property’s value by 40%. There are better ways to spend your money.
Finally, investors tend to miss when it comes to pricing. Again, this is where a local expert comes in. Each micro market is different. A price that’s just right in one neighborhood may be much too high in another. Only someone with years of experience working in this real estate market will know where you need to price in order to sell quickly and for a nice profit.
If you have any questions for me or you’re looking to invest in Pittsburgh area real estate, I’d love to hear from you. Give me a call or send me an email anytime.