Hard money lender in Scranton, PA.

I am a hard money lender in Scranton, and the building that defines this market is the double block: two homes under one roof, side by side, sharing a center wall, usually on a narrow lot with a porch across the front. Add the up-and-down two-family, the larger single on the hill, and the occasional small apartment house, and you have most of what investors buy here.

Scranton is a low-basis city by Northeast standards. That is the attraction, and it is also the trap. When the purchase price is modest, the rehab becomes a large share of the total, and a surprise in the basement or under the house moves the whole deal. This is coal country, and some of what sits under the house deserves a look before you commit.

I am a private money lender, so one person reads your file and one person signs the term sheet. This page walks through the parts of the city where investors are active, the buildings that change hands, the one local issue I want checked early, and how fix and flip loans in Scranton, DSCR loans in Scranton and new construction loans in Scranton work when the deal is real.

The double block is the trade that repeats. Each side is a full house with its own entrance, stairs and usually its own utilities, so it rents like two singles and sells either as one building or, in some cases, as two halves if the lot and deed allow it. The rehab question is whether the two sides were kept up together. Often one side was owner-occupied and maintained while the other was rented and neglected, and the budget has to treat them as two different jobs.

Stacked two-families trade too, with one unit per floor. They are simpler to heat and easier to lease, and they are the most natural BRRRR building in the city. Roofs, chimneys, old heating systems, original wiring and stone or block foundations with a history of water are where the money goes. Kitchens and baths matter, but they rarely decide whether the deal works.

Single-family flips happen in the steadier residential sections, where the buyer is an owner-occupant comparing your house with a finished one down the block. Those flips need a resale comparable that actually looks like the finished product, because a Scranton buyer who can see the next street over will not pay a premium for a renovation that stops at the paint.

Small apartment houses and converted mansions show up near downtown and the Hill. Ground-up work is less common than in bigger markets, and when it happens it is usually a single or a two-family on an infill lot where an older house was taken down.

Scranton grew on anthracite coal, and a large part of the city sits above old underground mine workings. Most of those mines have been closed for generations, but the voids they left can still settle. When the ground over a mine moves, the result can be cracked foundations, racked walls, doors that stop closing, broken utility lines, and in the worst cases a house that has to be braced or taken down.

Ordinary homeowner's and landlord policies generally exclude this kind of loss. Pennsylvania runs its own mine subsidence insurance program through the Department of Environmental Protection, sold through licensed insurance agents, to fill that gap. It is inexpensive compared with what it protects, and the state publishes maps showing where undermining is known or likely.

This is the one local fact I want handled before the contract firms, not at the closing table. I want to know whether the property sits over mapped workings, whether the seller already carries a subsidence policy, and whether the foundation shows signs of past movement. A diagonal crack in a block wall can be ordinary settling or something older and deeper, and an inspector who knows the region can usually tell the difference.

None of this means a Scranton deal is risky by default. Plenty of houses here have stood over old mines for a century without trouble. It means the coverage question gets asked early, the inspector looks at the foundation with this in mind, and a building with active movement gets priced and scoped for it, or passed on.

Fix and flip loans in Scranton put the purchase and the rehab in one facility, with the rehab money released in draws against finished work. On a double block that usually means the roof, the heating plant, the electrical service and anything structural are scoped and drawn first, before the cosmetic work on either side begins.

Because purchase prices here are modest, a small overrun matters more than it would on a bigger house, so I read the rehab budget line by line and want a contingency that reflects a hundred-year-old house. The after-repair value comes from renovated sales on the same street or very close to it. The written term sheet comes back within 24 to 48 hours, and once title is clear a Scranton flip loan closes in 5 to 10 days. Pricing is set per deal and stated in the term sheet.

How fix and flip loans work

DSCR loans in Scranton qualify on the property's rent rather than your personal income, so there are no tax returns or W2s in the file. I need the leases, a rent roll, and enough evidence that the rent is being paid. On a double block or a stacked two-family, each unit's lease is reviewed on its own, and a vacant side is underwritten conservatively until it is leased.

These close in 14 to 21 days. They suit landlords who already own stabilized two-families in the West Side or South Side and want long-term debt, and they are the natural exit from a bridge loan once the rehab is done. I also want the mine subsidence coverage confirmed on the property, because a rental with an uninsured foundation problem is a rental that can stop paying.

How DSCR loans work

New construction loans in Scranton cover the land and the vertical build in one facility, starting at $150K and running to $1M+. Ground-up work here is mostly infill: a new single or two-family on a lot where an older house came down, or a small project near the university and medical employers.

I review the contractor bids before closing. I want a line-item budget, a schedule that matches it, approved plans and a clear permit path with the city. On any lot in an undermined area I also want to see what the engineer or the soils report says about the ground, because a foundation designed for that condition costs more than a standard one and belongs in the budget from the start. These close in 10 to 14 days once the file is complete.

How construction loans work

The bridge loan is how a Scranton BRRRR begins. You buy a tired double block or two-family, fund the purchase and the rehab with me, lease both units, and then refinance into a DSCR loan with the same lender once the building is stabilized. Because I already know the property and the numbers, the refinance is a continuation of the same file rather than a fresh underwrite by a stranger.

The two sides of a double block often finish at different times. I can structure draws so one side is completed and leased while work continues on the other, which shortens the period with no rent coming in. The subsidence coverage and the foundation inspection belong at the front of this plan, since both the refinance lender and the appraiser will ask about them. Pricing is set per deal and stated in the term sheet.

How the BRRRR bridge works

Before the inspection contingency runs out, I want the state subsidence map checked for this address, the foundation looked at by someone who knows the region, and a quote for subsidence coverage in hand. If any of those turns up a problem, it is far cheaper to renegotiate or walk away at that stage.

The rented side changes the schedule. If the tenant stays through the rehab, the work on that side waits or happens around them, so the budget and the timeline should say which.

The refinance is sized on the rent both sides actually lease for. If the second lease signs below plan, the refinance proceeds shrink with it, so I would rather underwrite a modest rent and be pleasantly surprised.