Where are you investing right now? (2-4 family hold/flip <$200k)

24 Replies

I'd love to hear about where people are investing and finding success!! I'm a real estate agent doing residential sales in Manhattan, and a beginning investor looking to invest out of state. I've done my reading and my research, and now it's getting to be brass-tacks time and start looking for and finding deals. Anywhere in the U.S. is fine. Some areas I'm interested in are northern Florida; Columbus, Ohio; Detroit, Michigan; Philadelphia and Pittsburgh; Denver and surrounding areas, but I'm open to anything, anywhere. Share your success stories ! I look forward to learning from you all.

@Daniel Akerman A lot of people are killing it here in Cincinnati... If you can find a deal that is. There are sub $200k 2-4 units to be found around Greater Cincinnati, but everyone around here is looking for it and anything that comes up that's not in a war zone is bought in a couple hours. Tough market right now

@Daniel Akerman @Grant Rothenburger Grant is right about Cincinnati.  I invest in the properties you are describing Daniel on the east side of Cincinnati.  Bought a 5 unit in 2015 at $149,000 and 4 unit in 2017 at $180,000.  I'd consider the area where these buildings are as B-.  I've lived in this area my entire life.  You can still find 4 units under $200k.  They will most likely be off market as my 4 unit was.  

Originally posted by @Daniel Akerman :

I'd love to hear about where people are investing and finding success!! I'm a real estate agent doing residential sales in Manhattan, and a beginning investor looking to invest out of state. I've done my reading and my research, and now it's getting to be brass-tacks time and start looking for and finding deals. Anywhere in the U.S. is fine. Some areas I'm interested in are northern Florida; Columbus, Ohio; Detroit, Michigan; Philadelphia and Pittsburgh; Denver and surrounding areas, but I'm open to anything, anywhere. Share your success stories ! I look forward to learning from you all.

 Hi Daniel, Columbus, Ohio is a great place to invest and glad to see that it was on your list.  There’s a tremendous amount of growth going on in Columbus at the moment and areas that folks would never have considered investing in less than 2 or 3 years ago are now, in some cases, fully turned around and the hot place to invest.  With OSU graduating 6000+ students year, as the state capitol and with tax incentives that bring and keep big business here in Columbus, just to name a few things, there is always a need for multifamily housing. The cost of property frankly across all asset classes (multifamily, industrial, office etc…) compared to basically any other city in the country is great and the returns are here. Good luck with everything! 

This post has been removed.

Following it carefully, also looking for market outside CA

Thanks for the feedback so far, everyone. Would love to hear more personal accounts and examples of deals you've done. I've already got all the market info, or access to it, so I don't need that so much. I'm more interested in seeing examples of deals you've done or details on some of your experiences investing in whatever area you're finding success in.

I have good success in 2 unit duplex than 4plex. The more units are better but I found the class of people in 4plex is lower and sometimes difficult. Water and sewers are common and shared in most old buildings and make it hard for landlord to distribute to tenants. Just my thoughts

@Robert Ellis Yep, I'm aware of all this, which is why I'm interested in Columbus! So do you have projects or deals you've done in Columbus as an investor you'd like to share? That's what I'm more interested in seeing and what I'd like this thread to be about. Share your deals!

@Moncy Samuel Thanks for your post. You didn't mention where you are investing or post any details on your deals. Care to share? 

@Grant Rothenburger I likely wouldn't be going to listed properties unless absolutely necessary, anyway. I'd be focusing on sourcing off-market properties and deals through wholesalers or through direct marketing to distressed owners. 

@Terry Lao Thanks for the link. As I had mentioned in my original post, I've already done all this sort of research, and was looking more for personal stories of where people are finding good deals and good success. Also, one of my problems with the Realtor.com report is that it is not investor-focused and is geared more towards end users (i.e. homeowners). Additionally, it is focused on market growth and sales activity, and neither is necessarily an indicator of good cash-flow investment opportunities. For example, I'm originally from San Francisco, which is #41 on this list of "Top Markets" and it's virtually impossible to cash flow there or anywhere else in the Bay Area, because of the underlying cost basis. Columbus, OH comes in at #75 -- well down the list, but I know for a fact that Columbus is one of the best places to invest in hold properties, and certainly beats out San Francisco, or Vegas, or many of the other cities on this list. I tend to focus on more investor-centric data and reports for my research and to identify markets. What I'm really interested in with this thread is personal experiences.

@Daniel Akerman so I am a Bay Area investor that has four 4 plex’s in Columbus all purchased in the last 12 months.   The deals can be had but do require a lot more work and deep knowledge of the areas from your on the ground team.   I have seen and heard stories of investors getting a great deal on a property but can’t get units filled at market rates based on area.   It goes without saying that PM makes a big difference.   I know you are looking for numbers and they do vary but I have a building on east side that I am in at $125k, in a C Area that had rents at $575 that I have pushed up to $625-$650 with all sub-metered tenet paid utilities.   On the west side also pushed up rents by $50-$100 to re-stabilize the property as well as rehabbed a few of the units.   Happy to discuss any Other questions you have as well as some other challenges I have run into if you want to PM me.

Cheers,

Art

Originally posted by @Art Mimnaugh :

@Daniel Akerman so I am a Bay Area investor that has four 4 plex’s in Columbus all purchased in the last 12 months.   The deals can be had but do require a lot more work and deep knowledge of the areas from your on the ground team.   I have seen and heard stories of investors getting a great deal on a property but can’t get units filled at market rates based on area.   It goes without saying that PM makes a big difference.   I know you are looking for numbers and they do vary but I have a building on east side that I am in at $125k, in a C Area that had rents at $575 that I have pushed up to $625-$650 with all sub-metered tenet paid utilities.   On the west side also pushed up rents by $50-$100 to re-stabilize the property as well as rehabbed a few of the units.   Happy to discuss any Other questions you have as well as some other challenges I have run into if you want to PM me.

Cheers,

Art

 Art -  having had the pleasure of working with you, I know first hand how much time you invest in educating yourself about the market and what an ongoing task it is as Columbus,  in particular,  is rapidly changing and without a team on the ground and the deep knowledge you mentioned in your post it's very easy to make a decision with incorrect or incomplete data/info and that's what most of us work so hard to avoid. Keep on rocking it Art! 

Originally posted by @Art Mimnaugh :

@Daniel Akerman so I am a Bay Area investor that has four 4 plex’s in Columbus all purchased in the last 12 months.   The deals can be had but do require a lot more work and deep knowledge of the areas from your on the ground team.   I have seen and heard stories of investors getting a great deal on a property but can’t get units filled at market rates based on area.   It goes without saying that PM makes a big difference.   I know you are looking for numbers and they do vary but I have a building on east side that I am in at $125k, in a C Area that had rents at $575 that I have pushed up to $625-$650 with all sub-metered tenet paid utilities.   On the west side also pushed up rents by $50-$100 to re-stabilize the property as well as rehabbed a few of the units.   Happy to discuss any Other questions you have as well as some other challenges I have run into if you want to PM me.

Cheers,

Art

 Hey, Art! Thanks for posting. Happy to hear from another Bay Area person! I currently live in NYC, but my mother lives in Pinole and she and I would be partnering on the deals. We're also in touch with David Greene, who is based in the Bay Area and has done lots of out of state investing.

Your experiences are interesting to me, and your deals sound very much like what I'd be looking to do. We're working with about $60k in cash, and looking to purchase something in the $180k-$225k range, 20-25% down, 75-80% LTV. Looking to do BRRRR strategy, so we're looking at getting distressed properties, most likely through wholesalers, getting them fixed up and performing, raising the rents and the underlying value.

How did you source your deals? What particular challenges did you face? Do you have any ongoing challenges that you're wrestling with? What other specific observations do you have about the area, or neighborhoods that are worthwhile? Who can you recommend as part of a "boots on the ground" team?

@Daniel Akerman I grew up in the Bay Area (Go Niners!) and currently live in Jersey City just outside of NYC. A couple months ago, I was on the same boat as you and I decided to invest in nearby Allentown / Lehigh Valley. It is only a 1.5-hour drive away from NYC so I could make frequent trips out there to check on my property. Through BP, I met a local investor friendly agent who was able to find me a duplex under $100k that I can rent out for $1,500 total. He was also able to introduce me to other local investors and I was able to quickly build up a team there.

With the numbers you are looking at, that is definitely doable in Allentown, although I might suggest starting off with a property in the 100-150k range so you will have extra cash for rehab. But other than that, stay patient and I am sure you will find a market that is right for you.

@Raymond Y.  Thanks Raymond! This is great info, and just the sort of personal story I was looking for. I'll take a look at Allentown! Since we're nearby each other, maybe we could meet up in Manhattan sometime for lunch and share info!

@Daniel Akerman Most who are doing BRRRR are buying with cash or hard money and not obtaining 75-80% LTV loans on the acquisition since they are typically very distressed properties. Also wholesalers are cash or HML deals only.

Originally posted by @Daniel Akerman :

@Grant Rothenburger I likely wouldn't be going to listed properties unless absolutely necessary, anyway. I'd be focusing on sourcing off-market properties and deals through wholesalers or through direct marketing to distressed owners. 

 Even that, there is a lot of competition for. Not saying you can't find something, because you can. There is just a lot of other investors mailing and marketing to the same people. 

We are buying 16 units in Heath, Ohio. It is just outside of Columbus to the east. We have been buying anywhere in the area and even started buying in the Dayton Area. Most of the units we buy are off market but we have found some success in buying off the MLS. Many times we find the more distressed the easier to get the deal as many are not wanting to do much work beyond cosmetics.

I live and invest in Dayton OH.  We can still get 2-4 units around $100K that have tenants in place that generate about a 10 cap.  I picked up a few in the last month and they are all in solid C neighborhoods.  I got 2 duplexes sub $60K.  Each were 3/1 renting 550-650 per unit to long term tenants.  I just got a triplex and a 4 unit each with 1/1 per unit that generate $1500-2000 gross rent with tenants paying their own utilities except water for around $100K.  These properties are all solid, with minor handyman type deferred maintenance needed along the way but nothing pressing.  After expenses including cap x, maintenance, vacancy, ETC most cash flow $100-150/Door.

If you ever want to chat about Dayton drop me a line... I always love to talk shop lol

Hi Daniel,

The Lehigh Valley which consists of Easton, Bethlehem, and Allentown in Pennsylvania is a great place to buy right now. This area is home to 823,000 people, the 3rd largest metropolitan area in PA, and has the fastest growing population in the state. Over the past two months I've purchased 2 deals of the local MLS. Details below:

2 unit purchased at $115,000 and appraised for $125,000 (8.69% upside)

2 unit purchased at $142,500 and appraised for $158,000 (10.8% upside)

Each property is yielding an 8% cash on cash return.  Although not the 10% return or higher I would ideally like to see, the annualized return made up for the difference in the upside appraisals.

The market here is hot, but if you are quick to see a deal as soon as it hits the MLS, and have an attractive offer, I've been able to see pretty good success in this sellers market.

Best Regards,

Hi, I would second what @Sean Bayliss has to say. I purchased a beautiful 2 family with 3 car parking 4 blocks from the new PPL downtown center. The house is also in the Historic District (built in 1868) and has stunning architectural charm on the outside  with a renovated interior.

Also, agree with Sean on being super prepared. I saw the MLS listing Friday morning, called my broker, drove from NYC on Saturday and put an offer in same day. My success in getting this was knowing the market, appreciating the housing stock, as well as knowing what the rent roll would be for the area. I get A+ tenants, a 12% return, as well as appreciation since the area is quickly becoming desirable. I would do it again in a heartbeat!

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