Testing the market before diving in

17 Replies

Hello BP community,

Ok, I decided to focus on some major towns at Ohio (Akron, Toledo or Youngstown).

What is the next steps ? Looking at property values ? Making contact with investors / contractors / property managers / RE agents in those cities ?

How did you operate when entered a new market ?

Cheers,

Benny

@Benny Gelbendorf Those are the next steps you have mentioned above. Before you dive in, have you thought of your investing strategy and your exit strategy? Are you planning on buying multi families or single families? Flipping or Buy and Hold? Do you have a house criteria?  How you answer those questions will help you operate better in a new market.

Originally posted by @Benny Gelbendorf :

Hello BP community,

Ok, I decided to focus on some major towns at Ohio (Akron, Toledo or Youngstown).

What is the next steps ? Looking at property values ? Making contact with investors / contractors / property managers / RE agents in those cities ?

How did you operate when entered a new market ?

Cheers,

Benny

Hi Benny,

Focus on establishing trust and relationships with the right people first before looking at "stats and demographics"

I've seen many investors do it the other way around and it didn't end up going well for them.

Success in real estate and any other business for that fact comes down to the people.

Take your time and don't rush

Much success 

@Benny Gelbendorf Listen to the BP Podcasts. I am up to show 130. I am learning a ton. Engelo Rumora, has an awesome podcast on Show 89. 

I am seeing properties start to stay on the market longer in the Maryland area that is close to Washington DC. Find out from Engelo if this is happening in Ohio. If it is, you may want to wait and learn through the forums and podcasts.

Darrell

Originally posted by @Darrell Bratton :

@Benny Gelbendorf Listen to the BP Podcasts. I am up to show 130. I am learning a ton. Engelo Rumora, has an awesome podcast on Show 89. 

I am seeing properties start to stay on the market longer in the Maryland area that is close to Washington DC. Find out from Engelo if this is happening in Ohio. If it is, you may want to wait and learn through the forums and podcasts.

Darrell

Thanks for your kind words Darrell,

We still have a tonne of inventor in Toledo and feel like kids in a candy store

I feel like a broken record saying that all the time lol

Properties do sit here longer than other markets :)

Have a great day

@Benny Gelbendorf

My man Engelo has it absolutely right...there's a lot of excitement and activity in Toledo but still some excellent returns. I'd recommend you narrow your focus just a tad to a projected return, then hone that to a market and then neighborhood.

Regarding the pace of sales - I'd say that the good properties fly off the market with multiple offers...the turds remain turds and sit for 90+ days as the price continues to drop. If I had $1 for every out-of-towner that rang my phone excited for a $9,000 property listed in a $50k neighborhood that's been sitting on the MLS for 180 days I'd be rich. Ultimately it's near impossible for an out-of-state investor to try to resurrect a property that needs $30k in work...contractors don't last that long and smell blood when they're working for you remotely.

Relationships are all that you will have to rely on when things go sideways...there's a pretty solid foundation here on BP, take a look, read a TON, and connect directly with those who operate in your preferred market.

If you're into Toledo, reach out, it's all I invest in. Engelo knows the surrounding areas in Lucas County and by now I wouldn't be surprised he's into Cleveland and Columbus. I'm just a hound after sub-$50k rentals that bring in $800/mo rent. Can't afford to invest away from that sector!

Originally posted by @Andrew Fidler :

@Benny Gelbendorf

My man Engelo has it absolutely right...there's a lot of excitement and activity in Toledo but still some excellent returns. I'd recommend you narrow your focus just a tad to a projected return, then hone that to a market and then neighborhood.

Regarding the pace of sales - I'd say that the good properties fly off the market with multiple offers...the turds remain turds and sit for 90+ days as the price continues to drop. If I had $1 for every out-of-towner that rang my phone excited for a $9,000 property listed in a $50k neighborhood that's been sitting on the MLS for 180 days I'd be rich. Ultimately it's near impossible for an out-of-state investor to try to resurrect a property that needs $30k in work...contractors don't last that long and smell blood when they're working for you remotely.

Relationships are all that you will have to rely on when things go sideways...there's a pretty solid foundation here on BP, take a look, read a TON, and connect directly with those who operate in your preferred market.

If you're into Toledo, reach out, it's all I invest in. Engelo knows the surrounding areas in Lucas County and by now I wouldn't be surprised he's into Cleveland and Columbus. I'm just a hound after sub-$50k rentals that bring in $800/mo rent. Can't afford to invest away from that sector!

Thanks for the mention Andrew,

We expanded into other markets and lost our A$$ so we had to put the tail between the legs lol

Team is so important and having the right infrastructure set up

As you know, this takes years to establish and we still loose to shady contractors from time to time

I don't know of any other market that offers a better "bang for your buck" that Toledo

$50,000, $60,000 and $70,000 buys solid B class property in decent areas with infrastructure supporting a tenant and home owner demand

In other markets, it buys C class at best

Much success to all

@Engelo Rumora Thank you for responding to me. I am inspired by your story and other podcast. I have only known about BP for 6 months or less and I have bought a property and now I am buying land and the property (a duplex) will cash flow enough to pay for the land. After that, I will save up my money to buy ore rental property. I have a long range plan.

I only have the BP podcasts to thank for that. I am up to 5 doors so I am still a newbie, but I am taking action.

You are awesome.

Darrell

Thanks @Engelo Rumora for the elaborate response. Like many other investors (I'm sure) I've searched on a market where the numbers make sense. I think Ohio different markets can produce those, obviously it needs to narrow down to micro level. My only concern is that those markets are too crowded in terms of investors / deals ratio. WDYT ?

@Nick Rutkowski , I thought about my strategy - Flip or rentals with refinance, as I would like to be able to leverage my cash power. At first thought about starting with single family and then move my way up. But as you know it may vary as I'll move along.

@Darrell Bratton I'm a bit concern about you statements on market freeze. If a market reached that point it one of the hazard signs I should re-think about. Are you sure about your stats when it comes to Ohio ?

Originally posted by @Darrell Bratton :

@Engelo Rumora Thank you for responding to me. I am inspired by your story and other podcast. I have only known about BP for 6 months or less and I have bought a property and now I am buying land and the property (a duplex) will cash flow enough to pay for the land. After that, I will save up my money to buy ore rental property. I have a long range plan.

I only have the BP podcasts to thank for that. I am up to 5 doors so I am still a newbie, but I am taking action.

You are awesome.

Darrell

No problem at all mate,

You have taken the "Bull by the horns" and that is best way to go about.

You will probably fail many time like we all do but it all comes down to picking yourself back up and moving forward

If you make your whole world evolve around real estate and financial freedom, then you can't fail.

If you work hard and are willing to do whatever it takes, then you will achieve huge success.

Well done once again and keep the dream alive mate

Originally posted by @Benny Gelbendorf :

Thanks @Engelo Rumora for the elaborate response. Like many other investors (I'm sure) I've searched on a market where the numbers make sense. I think Ohio different markets can produce those, obviously it needs to narrow down to micro level. My only concern is that those markets are too crowded in terms of investors / deals ratio. WDYT ?

@Nick Rutkowski , I thought about my strategy - Flip or rentals with refinance, as I would like to be able to leverage my cash power. At first thought about starting with single family and then move my way up. But as you know it may vary as I'll move along.

@Darrell Bratton I'm a bit concern about you statements on market freeze. If a market reached that point it one of the hazard signs I should re-think about. Are you sure about your stats when it comes to Ohio ?

Thanks Benny,

Be the black sheep and don't follow the herd.

To this day people laugh at me for living in Toledo

"Do you guys have roads there?" is a popular question

Funny thing is that I have done hundreds of deals and made millions doing what I do... In Toledo lol

There are other investors doing very well in this market also and it's a hidden gem in my opinion

Very little competition

Find a small tertiary market and roll your sleeves up

Work hard and do deals.

Let others laugh but guess who has the last laugh?

You do

I wish you much success

Originally posted by @Andrew Fidler :

@Benny Gelbendorf

My man Engelo has it absolutely right...there's a lot of excitement and activity in Toledo but still some excellent returns. I'd recommend you narrow your focus just a tad to a projected return, then hone that to a market and then neighborhood.

Regarding the pace of sales - I'd say that the good properties fly off the market with multiple offers...the turds remain turds and sit for 90+ days as the price continues to drop. If I had $1 for every out-of-towner that rang my phone excited for a $9,000 property listed in a $50k neighborhood that's been sitting on the MLS for 180 days I'd be rich. Ultimately it's near impossible for an out-of-state investor to try to resurrect a property that needs $30k in work...contractors don't last that long and smell blood when they're working for you remotely.

Relationships are all that you will have to rely on when things go sideways...there's a pretty solid foundation here on BP, take a look, read a TON, and connect directly with those who operate in your preferred market.

If you're into Toledo, reach out, it's all I invest in. Engelo knows the surrounding areas in Lucas County and by now I wouldn't be surprised he's into Cleveland and Columbus. I'm just a hound after sub-$50k rentals that bring in $800/mo rent. Can't afford to invest away from that sector!

 I don't know about that your thoughts on remote rehab are contrary to the book BP put out last summer I think advocating it.. I am with you extremely risky to do that.. 

Originally posted by @Jay Hinrichs :
Originally posted by @Andrew Fidler:

@Benny Gelbendorf

My man Engelo has it absolutely right...there's a lot of excitement and activity in Toledo but still some excellent returns. I'd recommend you narrow your focus just a tad to a projected return, then hone that to a market and then neighborhood.

Regarding the pace of sales - I'd say that the good properties fly off the market with multiple offers...the turds remain turds and sit for 90+ days as the price continues to drop. If I had $1 for every out-of-towner that rang my phone excited for a $9,000 property listed in a $50k neighborhood that's been sitting on the MLS for 180 days I'd be rich. Ultimately it's near impossible for an out-of-state investor to try to resurrect a property that needs $30k in work...contractors don't last that long and smell blood when they're working for you remotely.

Relationships are all that you will have to rely on when things go sideways...there's a pretty solid foundation here on BP, take a look, read a TON, and connect directly with those who operate in your preferred market.

If you're into Toledo, reach out, it's all I invest in. Engelo knows the surrounding areas in Lucas County and by now I wouldn't be surprised he's into Cleveland and Columbus. I'm just a hound after sub-$50k rentals that bring in $800/mo rent. Can't afford to invest away from that sector!

 I don't know about that your thoughts on remote rehab are contrary to the book BP put out last summer I think advocating it.. I am with you extremely risky to do that.. 

Rehabbing from afar is a recipe for disaster in my opinion

We sometimes still loose our A$$ to this day and our office is within a 5 min drive of most of our properties 

Just had someone "pinch" $32,000 from us not long ago

First time we filed a report and a civil suit

Usually we just "dismiss it" as the cost of doing business

Thus far that cost has creeped into the high 6 figure range over the years lol

Just my opinion off course

Originally posted by @Engelo Rumora :
Originally posted by @Jay Hinrichs:
Originally posted by @Andrew Fidler:

@Benny Gelbendorf

My man Engelo has it absolutely right...there's a lot of excitement and activity in Toledo but still some excellent returns. I'd recommend you narrow your focus just a tad to a projected return, then hone that to a market and then neighborhood.

Regarding the pace of sales - I'd say that the good properties fly off the market with multiple offers...the turds remain turds and sit for 90+ days as the price continues to drop. If I had $1 for every out-of-towner that rang my phone excited for a $9,000 property listed in a $50k neighborhood that's been sitting on the MLS for 180 days I'd be rich. Ultimately it's near impossible for an out-of-state investor to try to resurrect a property that needs $30k in work...contractors don't last that long and smell blood when they're working for you remotely.

Relationships are all that you will have to rely on when things go sideways...there's a pretty solid foundation here on BP, take a look, read a TON, and connect directly with those who operate in your preferred market.

If you're into Toledo, reach out, it's all I invest in. Engelo knows the surrounding areas in Lucas County and by now I wouldn't be surprised he's into Cleveland and Columbus. I'm just a hound after sub-$50k rentals that bring in $800/mo rent. Can't afford to invest away from that sector!

 I don't know about that your thoughts on remote rehab are contrary to the book BP put out last summer I think advocating it.. I am with you extremely risky to do that.. 

Rehabbing from afar is a recipe for disaster in my opinion

We sometimes still loose our A$$ to this day and our office is within a 5 min drive of most of our properties 

Just had someone "pinch" $32,000 from us not long ago

First time we filed a report and a civil suit

Usually we just "dismiss it" as the cost of doing business

Thus far that cost has creeped into the high 6 figure range over the years lol

Just my opinion off course

when that book came out on BP and the guy had all these out of state people wooped up on it I just cringed I love BP but sometimes these things sound great in theory but are highly risky and especially remote rehab we all have been taken by contractors and like you said even if your there 5 minutes away.. but when you 5 states away the risk / reward to save 10k on a deal just seems foolish to me. 

@Engelo Rumora You said,

Find a small tertiary market and roll your sleeves up

I agree 100% I live in DC and I am deploying my DC money in Alabama and Vermont, where it will go farther than it will in DC.

Darrell

@Benny Gelbendorf - congrats on jumping in! 

a few questions/observations: 

  1. what are your goals? these inform your strategy
  2. are you based in Israel most of the time? there are more passive ways to invest in real estate besides outright ownership + management
  3. what led you to Ohio? not questioning the decision, just curious

@Benny Gelbendorf I did not make a market prediction the Ohio market. I am only watching markets that I am interested in which is Baltimore Maryland and Southern Alabama. I am seeing a slow down (not a freeze) in those markets. You will want to look at your specific market to see the trends. Also, it has to do with the class of property that you are interested in. There may be a slowdown in class C (my class of properties) and not a slowdown in class B properties. You will want to do your research and then take action. Being an observer will not get you in the game.

I hope this helps.

Darrell

Originally posted by @Spencer Hilligoss :

@Benny Gelbendorf - congrats on jumping in! 

a few questions/observations: 

  1. what are your goals? these inform your strategy
  2. are you based in Israel most of the time? there are more passive ways to invest in real estate besides outright ownership + management
  3. what led you to Ohio? not questioning the decision, just curious

Hi Spencer,

1. My goal is to become an active investor of real estate (and of course making money in the process). As for strategy, I'm considering couple of options: Flips, BRRRR and Rentals (I know they differ from one another, but it depends on my personality as well as market characteristics.

2. I'm based in Israel for most of the time. However, I'm not interested in investing in funds / syndications as I'm looking to be more active in my investments.

3. Ohio is only one of the states I'm looking into on Macro level. There's also Michigan, South Carolina and Tennessee. I choose to start with Ohio as a use case for 2nd-3rd tier state where growth (population, economy) still relevant and entry prices for B-C properties is fairly low as oppose to other states in the US.