Agents in Youngtown, OH zip code 44507 and 44502

20 Replies

Hi, I am trying to analyze an opportunity that I may have with an investor in Youngstown, specifically the zip codes I mentioned in the subject. It seems as though properties can be bought very cheap and with about $20-30K can be renovated into a good looking home. According to realtor.com the median homes in the area are worth around $71K. Rents, I was told, are max $600/mo. and the area is low income. The numbers seem to meet the 2% rule and if it costs me $35-40K to buy and renovate a house and it's worth $71K, that seems good to me too. I have seen that the vacancy rate is high too. Anyway, if there is anyone that is familiar with these areas in Youngstown and could shed some light on the city it would be greatly appreciated. Do my numbers make sense? How bad or good is Youngstown for investors? Is there any appreciation? Is the city improving or declining? Do the areas I've mentioned have any investor activity? Thanks.

@Christopher Nerio

I lived in Youngstown all of my life until a very recent move to Chicago so hopefully this helps a little bit for you. I was an agent for the last 5 years as well and do have a couple investment properties close to those areas but mine are 44512 zips, which the big difference there is the school district. Youngstown city schools are tough and there is a very drastic line of property values between the zip codes due to this right on the line of where your 44502 and 44507 areas are. The 70k values in those areas is probably a bit on the high side, though there are some select streets that could maybe get close to that number, it would be very dependent on the street. The vast majority of properties there however are selling to investors in the 10-20k range with varying rehab costs to get rent ready so if the 30-40k purchase costs are rent ready or very close to then it could be a good rental property though it's likely only worth around 30-40k for most properties. Most rentals seem to be section 8 there and yes it is a high vacancy area. Youngstown as a whole is a declining market but it's pretty much been in a very slow decline since the steel mills closed in the 70s, not much has changed for better or worse since then though as far as real estate is concerned. Feel free to ask me any other questions, certainly could try to assist.

To answer the last 2 questions,

No there is not appreciation in Youngstown, and unless something drastic happens, my opinion would be that there is no likely appreciation any time soon.

There is lots of investor activity because of the cheap costs of acquisition and the majority of the market in the city are renters so it can be a great cash flow purchase but as always tenant selection is everything and property management selection is of major importance and very difficult for those properties.

Thanks for your help @Joe Cantanzriti and your honesty. Doesn't sound very appealing to me because it sounds like it would be a lot of work and possible headache. I would be investing out of state so that would add to the stress too. I read that Cleveland is on the rise, is this true? There are also other areas in Ohio that are reasonable and seem to be improving or better places to invest? Do you mind telling me where I may have better success investing in Ohio? What city or areas have good schools in Ohio or near the zip codes I mentioned? How far out from the zip codes I mentioned are safer zones to invest, if any? Thanks.

@Christopher Nerio  I can't personally speak to Cleveland as I really don't have any experience there though I do know there are many areas around Cleveland that have been booming. Maybe @James Wise might be a place to start there, he seems to be knowledgeable in the Cleveland area as well as many other on here I'm sure. 

It's not that Youngstown is a "bad" place to invest, it just depends what your looking for.... I'll keep buying property in the Youngstown suburbs but that's partially because I have the bias of it being my hometown and also the knowledge of street to street changes in the areas I invest. I have all of my property in the 44512 & 44471 zip codes which are Boardman & Struthers school districts. These areas are certainly not appreciating any time soon if ever but they are areas I'm very comfortable with and provide a very solid cash flow for the costs of the property. Also there is a very strong rental market here with a good balance of homeowners that keep the values at least stable. 

Columbus is a very strong market, though mostly between downtown & the university from what I understand... which has seen a huge influx of money in the last 5 or so years. Might be worth looking around that area. 

Hey @James Wise I just listened to your appearance on the BP podcast, great stuff! I live in Northern Va where investment properties are pricey. On the podcast you suggest that I get familiar with my market and invest there. I find it tough to do so unless I have a lot of money to put down to start. In your opinion do you think saving, learning my market, and then buying a property is wiser than investing out of state?What does Cleveland have to offer or any areas you are familiar with in Ohio? I like the affordability to acquire. Thanks.

Hi Christopher,

I have done a little in Youngstown .I Live in Medina but invest in the Cleveland Market. 

Cleveland is better in my opinion because you have more occupants to choose from, higher rents and the home prices are not that much more then Youngstown. 

With that said, Youngstown can be very good, I just prefer Cleveland. I am not sure about Youngstown, but In Cleveland, I sell to folks all over the globe. 

If ya ever wanna visit the area, I will buy ya a coffee! :-)

Originally posted by @Christopher Nerio :

Hey @James Wise I just listened to your appearance on the BP podcast, great stuff! I live in Northern Va where investment properties are pricey. On the podcast you suggest that I get familiar with my market and invest there. I find it tough to do so unless I have a lot of money to put down to start. In your opinion do you think saving, learning my market, and then buying a property is wiser than investing out of state?What does Cleveland have to offer or any areas you are familiar with in Ohio? I like the affordability to acquire. Thanks.

 If one can afford to invest in their own backyard I recommend they do so. If that is not an option Cleveland is a great market with a low barrier to entry. 

Joe,

I noticed that you have property in Youngstown, OH. I bought my second property there last year (2016), but in the 44504 zip code. With me being fairly new to real estate, I didn't do my full due diligence, especially when it comes to areas with some appreciation. Cash flow is good, but I now know that cash flow is not everything. 

Perhaps we can get together sometime to talk more about buying in the Youngstown area.

@Garrett May I actually owned a property over near yours by the university that I rented out to a fraternity. It actually worked out really well for me and I only sold it because it was owned with a partner and he needed to sell it. That area in my opinion actually could be a long term appreciation play, now I think long term could be 10-20 years at the rate Youngstown moves but the university has to improve I would think so student housing could be a good play over there. I would love to meet up though that may be tricky, I just moved to Chicago about 3 months ago so I'm only in the Yo on occasion now. Still will invest in my 44512 zip though, love the cash flow and my comfort with the area doesn't hurt.

Hi @Christopher Nerio .  i currently live in youngstown and have lived here my entire life.  For the most part I would agree with everything @Joe Cantanzriti said.  I invest here and also am an agent, but i would keep my investments in the suburbs.  The zips you mentioned aren't bad and should definitely cash flow, but don't be surprised if you sell it 10 years from now for the same price.  If you have any specific questions just let me know.  I live in 44514 and it's great but Youngstown is a bit of a crap shoot.

Hey  @Joe Cantanzriti , @Jonathan Kelly thanks for your help. If I am ever in the area I will take you up on that offer @Rob Gillespie . I have been looking into Columbus recently and seem to like the area better. However, in all these areas I continue to hear a common theme about cash flow and appreciation. I want to buy and hold so obviously I want good cash flow but would also like the property to appreciate. Also, I have heard good arguments for both. Cash flow VS appreciation. From things I've heard and read it seems that Ohio can be tricky for someone that is not from the area. There are up and coming areas but that overall appreciation is not good but cash flow is. Any thoughts?

Hi @Christopher Nerio ,

Disclaimer: I think as a general rule, appreciation should be looked at as a bonus because it isn't guaranteed (which you already know I'm sure, but I had to say it). With that being said, some things are more sure than others in my opinion.  If you're looking to buy and hold long term and looking for appreciation I would look to the suburbs of Youngstown particularly Poland and Canfield. Houses in Youngstown proper are dirt cheap - you can get a historical 2.5 story 6 bedroom 5 bath house with 3600 sq. ft and 4 fireplaces for under 40k but even if you fix it up you won't be able to sell it for more than 150. Normally I would say that leaves a lot of room to make money but this thing needs a ton of work.  6 bedrooms & 5 bathrooms all need redone.  Hardwoods throughout need repaired and it will probably have to be gutted and have vents run since it was boiler heat, etc.  In my opinion a place that needs that much work better produce a huge return.  That's too big a risk and too much money to tie up for a 30-40k return (if you can even reno it that cheap).

The house in the pic above will bring in probably 140-160 if done correctly because it's in a decent little nook right by the park but go east 2-3 block and you're in a very sketchy part of town which drives a lot of people with money away.  This is an extreme example but you get the idea.  Whatever this house sells for this year, will be what it sells for in 5, 10, 20 years adjusted for inflation of course.  As far as rents go in Poland and Canfield I'd say 800-1200 are reasonable most places.  I would buy in the 80-150 range (estimation after renovation).  As far as the 2% rule goes, you're looking more at the  1% mark unless you rehab first but even then it will be tough bc of the low price of housing here.  Buying a house for cheap is wonderful but the issue is that the rents stay low for the same reason and construction materials cost the same here (relatively) as they do in Denver and NYC.  These 2 town have great schools and it's basically where all the doctors, lawyers, managers etc live at around here.  You know the type I'm sure, 25 mph through the center of town, very clean, little to no crime, etc.  Houses should appreciate in these 2 towns over time if you buy in the right areas but again see disclaimer stated above.

For Columbus I would suggest Dublin, Powell, New Albany or Pickerington same reasoning as Poland and Canfield  (although not to a "T") but to a higher degree because of the big city factor.  Or buy a condo in a nicer part of the city.  Columbus is booming right now and tons of young people are moving there.  I'm 32 and I'd say out of every 10 people I know that move away, 5-6 of them move to Columbus.  A nice condo could give you good rents and also be a long term play for appreciation as well, but you'll probably have to spend a bit more to get started.  If I was looking to buy and hold I would look at buying condos in a well established part of the city and rehabbing them but this is going to tie up a lot of money.  In the 4 towns listed below you would have to find houses in the area that went to these schools that weren't very expensive.  Let's be practical, not many people will rent a $650,000 house (in ohio we'd rather buy bc why throw money away?) but they'll rent a $250,000 house, you'd have to stay on the lower end.

Those are a few of my thoughts on the matter and I am by no means an expert but I hope this helps.

Jonathan

@Jonathan Kelly

I love those properties down by the park like that one on Volney.... would love to rehab one, just like you said hard to make any sort of numbers work for an investment. Still there are some amazing properties down  there that will unfortunately just be lost in history. We need to get a major employer or some corporate offices relocated to the Yo for those areas to ever rebound, and that would just be a start.  

@Joe Cantanzriti I agree, they are beautiful and next to the park makes them that much more appealing.  And yes, that would be the start of a revitalization in the area.  Are you aware of the non-profit that is rehabbing houses in Youngstown?  I can't remember the name, something about youngstown neighborhood in the title.  I don't think they would ever rehab a house like this, but they are doing their part to make youngstown more attractive.  I think there are a lot of good things happening, more than I have ever seen in my life here.  Maybe we're at the beginning of something great?

@Jonathan Kelly , you're talking about Youngstown Neighborhood Development Corporation (YNDC)

http://www.yndc.org/

They are doing amazing things. Have really grown in less than a decade. Have been recognized nationally. They have been a model for many other CDC's in the country trying to replicate the same type of thing. Not just revitalizing homes and vacant space, but also community education in financial literacy and home ownership for would-be home owners. They have a program for people that meet certain income criteria by family size to buy the revitalized homes. Very similar to the guidelines for qualifications for Habitat for Humanity homes. Many great homes by the park and on the north side that I would love to go into, look around, and fix up!

@Jen Kurtz Yes!  That's them.  Awesome organization.  They are really doing great work for the people of Youngstown.  And yes me too.  Every once in a while I'll do that just to see what they're like.  I'm a realtor also so it's pretty easy to get in and out.

I've been tempted to go into Youngstown but have been warned off through similar comments as others have expressed here.  Much like the older neighborhoods of Cleveland, the declining  population ( because of steel, automotive and other manufacturing leaving the area) created a situation where there are more houses than demand and many properties don't receive the maintenance needed to keep up. The hey-day of NE Ohio was the early 1900's and a lot of our housing stock was built between 1900-1955.  Downtown Youngstown is rough and with all respect, not a place you'd want to run out of gas if you know what I mean.  The immediate areas around Youngstown State and the hospital are better but they both have large security forces.

That said, Boardman is known to be a decent place to live and invest in the Youngstown area and if the right deal came up I think I'd be interested. I use a property manager for my places in Kent. He and his wife are from Youngstown and are slowly buying rentals for themselves. I would consider him hands-on and knowledgeable. PM me and I'll refer you.

Originally posted by @Joe Cantanzriti :

@Christopher Nerio  I can't personally speak to Cleveland as I really don't have any experience there though I do know there are many areas around Cleveland that have been booming. Maybe @James Wise might be a place to start there, he seems to be knowledgeable in the Cleveland area as well as many other on here I'm sure. 

It's not that Youngstown is a "bad" place to invest, it just depends what your looking for.... I'll keep buying property in the Youngstown suburbs but that's partially because I have the bias of it being my hometown and also the knowledge of street to street changes in the areas I invest. I have all of my property in the 44512 & 44471 zip codes which are Boardman & Struthers school districts. These areas are certainly not appreciating any time soon if ever but they are areas I'm very comfortable with and provide a very solid cash flow for the costs of the property. Also there is a very strong rental market here with a good balance of homeowners that keep the values at least stable. 

Columbus is a very strong market, though mostly between downtown & the university from what I understand... which has seen a huge influx of money in the last 5 or so years. Might be worth looking around that area. 

Hi Joe,

My name is Marge and my partner and I are just starting our Boardman, OH REI journey. I was searching the forums for posts mentioning the area and stumbled upon yours. That was from 4 years ago. Curious if you're still in the area and if you have any RE agent and PM referrals you're willing to share.

Thanks!

Smiles,

Marge