Out of state investor looking at Cincinnati
Eagle, ID · Member since 2018 · 9 posts · 4 votes
Out of state investor looking at Cincinnati
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Lender · Sacramento, CA · Member since 2016 · 61 posts · 84 votes
8yHi Jason -
I am wrapping up a house we are flipping in Cinci right now, all while living in SF. I have not seen the house, and that comes with a certain degree of stress, both as we go into the final inspections as well as throughout the entire process. What led you to Cincinnati? Is it a place you would consider moving? As a first time investor, there's (debatably) no better way to invest than house-hacking with an FHA loan. That's a strong first step to building long-lasting financial wealth, as noted in the fantastic book, Set For Life.
I recommend getting acquainted in the area, finding a solid contractor crew (and vetting their previous work thoroughly) and calling around to local property management companies to find who they use regularly to manage their repairs. You should have a firm grasp on the general processes involved in buying, drafting plans, construction timeline and resale strategies before getting into it as a first timer. You don't want to sound like an out-of-state newbie to a local contractor, who very well may use your account at Home Depot to buy materials for other projects.
Get comfortable with uncertainty, or be explicit about your expectations when working with a contractor (weekly visits/photos, invoices prior to payment, etc) - don't make assumptions. Feel free to DM me.
18 Replies
- Lender · Sacramento, CA · Member since 2016 · 61 posts · 84 votes8y
Hi Jason -
I am wrapping up a house we are flipping in Cinci right now, all while living in SF. I have not seen the house, and that comes with a certain degree of stress, both as we go into the final inspections as well as throughout the entire process. What led you to Cincinnati? Is it a place you would consider moving? As a first time investor, there's (debatably) no better way to invest than house-hacking with an FHA loan. That's a strong first step to building long-lasting financial wealth, as noted in the fantastic book, Set For Life.
I recommend getting acquainted in the area, finding a solid contractor crew (and vetting their previous work thoroughly) and calling around to local property management companies to find who they use regularly to manage their repairs. You should have a firm grasp on the general processes involved in buying, drafting plans, construction timeline and resale strategies before getting into it as a first timer. You don't want to sound like an out-of-state newbie to a local contractor, who very well may use your account at Home Depot to buy materials for other projects.
Get comfortable with uncertainty, or be explicit about your expectations when working with a contractor (weekly visits/photos, invoices prior to payment, etc) - don't make assumptions. Feel free to DM me. - Real Estate Agent · Cincinnati, OH · Member since 2016 · 169 posts · 146 votes8y
If you plan on investing in any of of state location I would recommend you visit the town and get a lay of the land. Cincinnati especially can have A, B and C areas all within a few streets of each other. Having someone familiar with investment properties and having a team in place is helpful as well so once you pick up something you can hit the ground running.
- Real Estate Agent · Cincinnati, OH · Member since 2017 · 44 posts · 10 votes8yCincinnati can definitely be a tough market if you don’t have a good grasp on the locations. I tend to stay in the tertiary markets because I don’t have a good understanding of the city. Joseph Cornwell is a great agent who can help you and he invests in some of the outlying parts of Cincinnati. I would also recommend at least making a few visits to the city and driving around to get an idea of where you are comfortable investing. Good luck!
- Rental Property Investor · Shorewood, IL · Member since 2016 · 80 posts · 46 votes8y
Jason, we're in a similar situation. We have just a single SFH on the South side of Chicago but my W2 employer's HQ is downtown Cinci and I'm travelling there more often so I'm looking for a small multi family that has a 1br unit that I could stay in while travelling and have the other renter(s) covering all the costs. As @Eric Gross mentioned, @Joseph Cornwell is a good contact to have. He's had a few listings I looked at but didn't jump on soon enough and missed out. They go fast!
Since i have 600+ co-workers in the Cinci area, I have folks I can ask their opinion on the neighborhoods before investing too much time on building an offer.
- Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes8y
Jason, be careful of what area you are buying in, and the quality of the tenant. It is particular difficult for an out of state investor to do well in the C- and D areas and the price point you are talking about for a multi, well...that is all you might come with.
- Cincinnati, OH · Member since 2015 · 214 posts · 107 votes8y
Jason,
I live in Cincinnati and invest in properties like you are describing. If you have any questions on anything feel free to send me a message. Happy to help in any way that I can. If you need contacts for anything let me now.
- Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes8y
@Eric Gross and @Andrew Hargreave Thank you so much for the shout out!
@Jason Evans 50-100k for a 2-4 family is possible, but most likely you are looking in C or D area, or at something distressed and in need of rehab work. Most C+ or better areas with updated or turnkey units is going to be above 100k. If you would like to talk more feel free to connect with me!
- Eagle, ID · Member since 2018 · 9 posts · 4 votes8y
Awesome feedback! Thank you all so much for the great information, it is really encouraging to have the support of people with experience especially as a brand new investor just learning the business. I have messaged many of you and I will continue to reach out to people as questions come up. I am in the process of contacting some realtors this week and I think I may have a property management company nailed down already. My next goal is to leverage the experience of the realtor I choose to narrow my search to the appropriate neighborhoods for long term buy and hold rentals. I know for now I am limited to class C neighborhoods because of my financial resources but I plan to change that as soon as I can build some healthy cash flow and a financial/investment owner track record.
- Rental Property Investor · Chicago, IL · Member since 2014 · 108 posts · 49 votes8y
We have been investing in Cincinnati since 2007 from out of state. It is really interesting how the number of out of state investors has really increased in the last year or two. I would echo the comment that any multi families that are sub-$100k are probably to be avoided for the reasons cited. Anything even remotely reasonably priced in a C or better neighborhood is under contract in days. We just made a cash offer on a place for $5k over list and was told there were 30 offers since it was listed 4 days ago and the accepted offer "blew ours away". Building is 65% occupied with empty units requiring updating and in a C neighborhood. I don't mean to discourage anyone from investing in Cincinnati so much as trying to get people looking at Cincinnati for the first time to have realistic expectations.
- Eagle, ID · Member since 2018 · 9 posts · 4 votes8y
@Ryan Ball
Good advice, I am currently in contact with a realtor and another investor in the Cincinnati area so I will make sure to learn from them about areas to avoid and properties to be cautious of for the reasons that have been pointed out. Thanks!
- Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes8y
Just kind of mirroring what other people have already said, but there's some definite risk both in that market and in that price range.
Are you sure you can even get a property in a C class neighborhood with that price range? $50-100k on a MFR, just about anywhere, can start getting super sketch pretty quick. I can't imagine how you'd get better than D neighborhood at that. Or at least D on the $50k side and maybe C/C- on the $100k side. And would this property need work? That's another ballgame if you're long-distance to it.
- Rental Property Investor · Turlock, CA · Member since 2018 · 226 posts · 147 votes8y
I talked to an investor I met here on BP from San Fran and she has invested in the Columbus area. She mentioned to me that she is also looking at Cincinnati and that prices in both areas have climbed over the last several years. Personally I think I would get more educated before making a move. I listened to @David Greene podcast and just purchased his book on long distance investing. Once I read through this book I plan on looking seriously out of state.
@Jason Evans, what are your thoughts on investing in Boise? Is there a reason you are looking out of state?
Thanks!
- Eagle, ID · Member since 2018 · 9 posts · 4 votes8y
@Ali Boone
Yes, it is the low end of the market for sure and I don't plan to stay in that price range for long. I am working with a realtor now so I am going to have to trust their knowledge and instincts of the area at first until I get to know it better. I also am in contact with an investor who lives in Cincinnati that is giving me some good information about neighborhoods to avoid. More than likely the property will be close to the $100,000 point. Thanks for the input.
- Eagle, ID · Member since 2018 · 9 posts · 4 votes8y
@Kevin Moules
@Jason Evans, what are your thoughts on investing in Boise? Is there a reason you are looking out of state?
Yes, I believe it is very important to educate yourself before you jump into something especially when it involves money. I am working with a realtor who lives in Cincinnati and will use her expertise and knowledge to make a wise investment when the time comes.
As far as Boise is concerned, it is a great market to invest in from what I have seen. It is consistently on the top 10 best places to live in the country and there is an explosion of population growth, jobs, and housing. The current projection for the Treasure Valley is a continued and steady growth rate for the next 10-20 years. All that being said, the entry point for this market is higher than what I am currently capable of investing in. However, if I had access to investor money and had some experience and a track record I would invest in Boise and more specifically Eagle, Star and eventually Middleton.
- Rental Property Investor · Turlock, CA · Member since 2018 · 226 posts · 147 votes8y
Hi Jason,
Our goal is long term buy and hold and looking for cash flow. Being in CA it is pretty hard to cash flow where I am at. You have to find a stellar deal and usually it is snatched up by an investor before you can blink an eye. We do have appreciation but that should be the icing on the cake and not the meat and potatoes. I only mention Boise because my wife has some family in ID.
I appreciate your tidbits of knowledge regarding where you would invest if you had the money right now. I will have to keep those in mind.
@Joseph Cornwell, I am going to have to save your info. As mentioned earlier I had a CA investor tell me that there are some good deals to be made in Cincinnati. If I can make it out to OH this year I think I would like to meet up and learn more about Cincinnati and where you would consider the good areas to invest in.
Thanks! - Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes8y
@Kevin Moules I would be happy to help anyway I can. Feel free to reach out when you want to talk more, thanks!
- 8yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Originally posted by @Kevin Moules:
Hi Jason,
Our goal is long term buy and hold and looking for cash flow. Being in CA it is pretty hard to cash flow where I am at. You have to find a stellar deal and usually it is snatched up by an investor before you can blink an eye. We do have appreciation but that should be the icing on the cake and not the meat and potatoes. I only mention Boise because my wife has some family in ID.
I appreciate your tidbits of knowledge regarding where you would invest if you had the money right now. I will have to keep those in mind.
@Joseph Cornwell, I am going to have to save your info. As mentioned earlier I had a CA investor tell me that there are some good deals to be made in Cincinnati. If I can make it out to OH this year I think I would like to meet up and learn more about Cincinnati and where you would consider the good areas to invest in.
Thanks!Hello Kevin,
Investing from out of state is challenging but if set up correctly, it can be a great way to reach areas that can give you a better return. First thing to consider is the team: lender, agent, property manager, attorney etc... Build a local team that is familiar not only with the area but also with the type of property you are purchasing - location, unit count/mix, rents etc...These folks will be your boots on the ground. If you can come to the city to visit that helps but often, as a majority of properties are "curb offers only", buyers will come out for inspections after the offer is made and then go home and complete the rest of deal form there. It's critical as an out of state investor to build a team that you trust to advise you. Good luck with everything!
Section 8 Launch52 Reviews - Rental Property Investor · Turlock, CA · Member since 2018 · 226 posts · 147 votes8y
Hello @Robert Ellis, you have been someone I planned on reaching out to in the near future regarding properties in the Columbus area and for some guidance on building a team. You mentioned that investors come out after the offer. Seems that this can end up being expensive if you fly out every time you buy a property, isn't that the point of building a team, so you do not have to physically see the place?
My thought process is to come out and visit with folks and learn more about them before being under the gun of trying to close and meet people on the way. Is there anything wrong with trying to meet people of your potential team before even placing offers on a place?
Thanks for your comment above!
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