Investing in Ohio or another state?

Investor · CA · Member since 2020 · 4 posts · 14 votes

How is the real estate investing market in Ohio?

I was looking to possibly invest in a rental property there.

I also just heard of a lot of newbie real estate investor traps going on there and would like some advice on maybe who or who not to work with?

Also, what other states would you recommend investing in (if any)?

I'm looking to buy a single family home or duplex around $50k that I can fix up for around $10k-20k, refinance, and make a rental cash flow profit along with appreciation over time. Basically using the brrrr process.

Thanks for all your guys' help! <3

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P.J. Bremner

Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes

@Katja Jeschke

When I first started out, I was buying in California (2012-2016). Like you, I decided to look out of state thereafter because the numbers were looking rough for anything local.

I decided upon Cleveland Ohio as my focus, but to be honest it could have easily been 100 other cities. I liked Cleveland because of the medically focused industries which are generally well paying and stable. The price points were attractive as well because I could splash around with multiple properties for the price of half of a property in Ca and still earn 15% or more cash on cash.

I have learned SO many lessons in that time, I could probably write a book on it lol. I'll be happy to chat sometime if you are interested, but a few key points to make that I learned:

- Focus on building your team first. Without these people, you have nothing. Most important is your PM as they will make or break you as I found out the hard way with 3 different companies. Contractor is next, then everyone else (handymen, CPA, lawyer, property tax lawyer, etc.). Also be sure to vet them with references THEY DID NOT GIVE YOU. Ask their reference for someone who also works with them to get someone they didn't want to give you as their reference. You are more likely to avoid fake references.

- Trust but verify!! Find good people to help you out, but look over every detail to verify. I like to have unrelated people looking at the same projects for me. If my PM says the roof needs repair, I want a contractor that doesn't know the PM to verify it. If my contractor says he's 50% done, I want my PM to check in on it to make sure. If your PM and contractor are buddy buddy, they could easily put you together (rip you off) and tell you what the other is saying. If you have an unrelated 3rd party helping you, the odds of them both telling you the same lie is basically zero.

- Watch. Every. Single. Penny. That. Leaves. Your. Pocket. You should know if an invoice is off by a single penny from what your bank statement shows. It's so key to know what's going on with your business to the finest detail so that you can spot problems before they become massive. And let me tell you, small problems compound into massive, bankruptcy inducing problems very quickly when you are not local. I know from experience how painful this is, so please do yourself a favor and learn excel, QuickBooks, notion, freshbooks, anything that you can use consistently to get a precise view of your businesses income and expenses on at least a weekly basis, if not daily.

- Know the market you are looking into better than anyone you are going to work with. This sucks, it's a grind, tedious, kills the fun of looking at property online, but it's very important in my opinion. I looked at the market every day for over a year before I bought my first, but I knew damn well what it was worth when I pulled the trigger and made a handsome profit when I sold a few years later (even after losing money due to mistakes). My strategy to learn was to look at one or two properties each day in a specific neighborhood, look at sold properties for comps and input this into a spreadsheet. As time goes by, you can guess what a property is worth before you do the work and then see how close you get. I also like to follow properties for sale and see what they do (flip, rent, etc). You can identify a good deal and see what the person who bought it did with it and compare to what you estimated it to be.

Like I said I could probably go on for hundreds of pages, mostly me making $#&$ ups and learning lessons lol. Feel free to PM me if you have any questions or just want to chat in general about investing as I'll be happy to share what I've learned. Best of luck!!

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Ryan Mainwaring
Rental Property Investor · Blacklick, OH · Member since 2016 · 286 posts · 253 votes
6y
@Katja Jeschke I love columbus, ohio. The market is hot because of population growth and lack of housing inventory. Here is link to projected population growth by 2050 and how Columbus plans to handle it.
What newbie investor traps have you heard about in Columbus, Ohio?
2 Reply
Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
6y
you can do that here in central indiana as well
0 Reply
Connor Johnson
Property Manager · Columbus Ohio · Member since 2015 · 11 posts · 8 votes
6y
In Columbus 50k is going to get you into a neighborhood that is pretty dicey, I think you can deploy this plan in any Midwest city with a little digging. If you had any questions about the city feel free to PM I have had great success with small multifamily thus far.
1 Reply
Cameron Tope
Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
6y
Katja,

A blanket statement like "Ohio is a great/bad place to invest" is dangerous as there are good and bad deals in every state, city and neighborhood.
What state and city can you have a competitive advantage in? What are your real estate goals?
Then you can narrow down the area and start looking for deals.
2 Reply
Tien James
New to Real Estate · Gardena, CA · Member since 2017 · 17 posts · 6 votes
6y
@Katja Jeschke
I'm with you Katja, I too am wanting to invest in Ohio somewhere. Where are you about in CA if I can ask? I'm planning a trip out there the second week of January next year, cleveland to be exact...maybe we can connect and see what ohio has to offer??
1 Reply
Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
6y
Originally posted by @Katja Jeschke:
How is the real estate investing market in Ohio?

I was looking to possibly invest in a rental property there.

I also just heard of a lot of newbie real estate investor traps going on there and would like some advice on maybe who or who not to work with?

Also, what other states would you recommend investing in (if any)?

I'm looking to buy a single family home or duplex around $50k that I can fix up for around $10k-20k, refinance, and make a rental cash flow profit along with appreciation over time. Basically using the brrrr process.

Thanks for all your guys' help! <3

At that price in Columbus you aren't going to get very far, not too much inventory for SFH at 50k or under and the ones that are at that price generally need more than 10-20k worth of work. There are some out there though, but you're not going to find a Duplex at that price that isn't gutted.

If looking at columbus in Ohio I would raise your capital up to look to purchase under 100k for SFH and BRRRR in a c or c+ class neighborhood for around 1%. Great appreciation here in the sub 200k price for SFH.
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4 Reply
P.J. Bremner
Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes
6y
@Katja Jeschke
When I first started out, I was buying in California (2012-2016). Like you, I decided to look out of state thereafter because the numbers were looking rough for anything local.
I decided upon Cleveland Ohio as my focus, but to be honest it could have easily been 100 other cities. I liked Cleveland because of the medically focused industries which are generally well paying and stable. The price points were attractive as well because I could splash around with multiple properties for the price of half of a property in Ca and still earn 15% or more cash on cash.
I have learned SO many lessons in that time, I could probably write a book on it lol. I'll be happy to chat sometime if you are interested, but a few key points to make that I learned:
- Focus on building your team first. Without these people, you have nothing. Most important is your PM as they will make or break you as I found out the hard way with 3 different companies. Contractor is next, then everyone else (handymen, CPA, lawyer, property tax lawyer, etc.). Also be sure to vet them with references THEY DID NOT GIVE YOU. Ask their reference for someone who also works with them to get someone they didn't want to give you as their reference. You are more likely to avoid fake references.
- Trust but verify!! Find good people to help you out, but look over every detail to verify. I like to have unrelated people looking at the same projects for me. If my PM says the roof needs repair, I want a contractor that doesn't know the PM to verify it. If my contractor says he's 50% done, I want my PM to check in on it to make sure. If your PM and contractor are buddy buddy, they could easily put you together (rip you off) and tell you what the other is saying. If you have an unrelated 3rd party helping you, the odds of them both telling you the same lie is basically zero.
- Watch. Every. Single. Penny. That. Leaves. Your. Pocket. You should know if an invoice is off by a single penny from what your bank statement shows. It's so key to know what's going on with your business to the finest detail so that you can spot problems before they become massive. And let me tell you, small problems compound into massive, bankruptcy inducing problems very quickly when you are not local. I know from experience how painful this is, so please do yourself a favor and learn excel, QuickBooks, notion, freshbooks, anything that you can use consistently to get a precise view of your businesses income and expenses on at least a weekly basis, if not daily.
- Know the market you are looking into better than anyone you are going to work with. This sucks, it's a grind, tedious, kills the fun of looking at property online, but it's very important in my opinion. I looked at the market every day for over a year before I bought my first, but I knew damn well what it was worth when I pulled the trigger and made a handsome profit when I sold a few years later (even after losing money due to mistakes). My strategy to learn was to look at one or two properties each day in a specific neighborhood, look at sold properties for comps and input this into a spreadsheet. As time goes by, you can guess what a property is worth before you do the work and then see how close you get. I also like to follow properties for sale and see what they do (flip, rent, etc). You can identify a good deal and see what the person who bought it did with it and compare to what you estimated it to be.
Like I said I could probably go on for hundreds of pages, mostly me making $#&$ ups and learning lessons lol. Feel free to PM me if you have any questions or just want to chat in general about investing as I'll be happy to share what I've learned. Best of luck!!
9 Reply
Zeke Liston
Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
6y
Hi @Katja Jeschke, I would agree that $50K won't get you far in Columbus, OH but I would check out Cleveland and Cincinnati. I saw the same post, so sad to hear, I would spend a good amount of time looking at references, doing due diligence, etc for your CORE 4!
2 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
6y
Originally posted by @Katja Jeschke:
How is the real estate investing market in Ohio?

I was looking to possibly invest in a rental property there.

I also just heard of a lot of newbie real estate investor traps going on there and would like some advice on maybe who or who not to work with?

Also, what other states would you recommend investing in (if any)?

I'm looking to buy a single family home or duplex around $50k that I can fix up for around $10k-20k, refinance, and make a rental cash flow profit along with appreciation over time. Basically using the brrrr process.

Thanks for all your guys' help! <3

Great to hear your interested in Ohio. Ive been investing here in Columbus for a couple of years and its turned out great so far, killer cash flow and very fast appreciation. With 50k you could buy something, you'll be looking in the Hilltop and Linden areas which are C areas though
1 Reply
Jonathan Oh
Investor · Las Vegas, NV · Member since 2019 · 499 posts · 259 votes
6y
@Katja Jeschke
50k is a very low price point. Things are cheap for a reason. Just be careful which neighborhoods you invest in. Do your research thoroughly, because the cashflow might look great, but if you get evictions every few months, you're going to be losing money. Good luck! Let me know if you need help researching anything.
1 Reply
Uri Gofman
Member since 2018 · 150 posts · 200 votes
6y
Cleveland Ohio is an excellent market in which to build a rental portfolio. We have been in this market since 1995 and would be happy to assist anyone interested in Cleveland real estate investment. It is always essential to start with having clear goals and realistic expectations. Unfortunately it is very easy to buy into all kinds of less than desirable situations if someone does not have a clearly defined plan. Remember that higher returns, whether actual or proforma, almost always translate into higher risk and / or volatility.
2 Reply
Leo F.
Developer · New York City & L.I. · Member since 2013 · 79 posts · 29 votes
6y
In Columbus is it possible to Find a 5-20 unit property in a B or B- area that that doesn't need heaving lifting work , light add value that cash flows ?
1 Reply
Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
6y
Ohio is very very nice! Great success!
1 Reply
Josh HeebPro Member
Member since 2018 · 12 posts · 6 votes
6y
I can be boots on the ground for that southern Indiana/ southern Ohio market. I have a rental and a Brrr I’m working on right now. I have a better understanding of the southern Indiana market but I can travel to Ohio and take videos or what ever you feel you need.
2 Reply
Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
$50K in Columbus is not very reasonable....You can do that in Cleveland though. In fact I even know of a lender that will do mortgage loans on proerties below $50K in Cleveland.
2 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
6y
Originally posted by @Leo F.:
In Columbus is it possible to Find a 5-20 unit property in a B or B- area that that doesn't need heaving lifting work , light add value that cash flows ?

Yes this is possible in Columbus, Ohio if you purchase it with cash.
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0 Reply
Todd Pultz
Rental Property Investor · Dayton, OH · Member since 2019 · 293 posts · 440 votes
6y
@Katja Jeschke Buying for 50k and fixing up for 20k and then reappraising for 105-110k is absolutely doable, just a lot harder in the bigger markets like Columbus and Cincinnati. It can be done anywhere but it’s harder to find decent neighborhoods at that price point in high appreciation markets such as Columbus.
However, if you want to really create a portfolio that cash flows in Ohio, you should look at my quad strategy I talk about on a few forums as that would be wiser to utilize your 70k on tgan a duplex. Just a thought.
I love real estate, so feel free to reach out and I’ll give you everything I know about Ohio and share with you my partners experiences before we were partners and he was investing out of state here.
Good luck to you
2 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
6y
Originally posted by @Leo F.:
In Columbus is it possible to Find a 5-20 unit property in a B or B- area that that doesn't need heaving lifting work , light add value that cash flows ?

Yes, I come across about 2 of the 5-20 unit buildings a week in the Columbus area. Most are under 10 units, and most of the time they're overpriced, but on occasion i'll hit a great cash flowing deal that just needs paint to raise rents to make it an incredible deal.
0 Reply
Nate Sanow
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Katja Jeschke
Once you work with some of these awesome individuals in Ohio, we will also welcome you to build your portfolio in Tulsa, Oklahoma & Oklahoma City with arms wide open. :)
2 Reply
Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
6y
@Leo F.
Yes, but depends on purchase price.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
6y
@Katja Jeschke

A $50,000 price point 10 years+ into a bull market is not going to get you the best property.
It will likely either need a lot of fixing up(gut rehab) or in a horrible neighborhood.
If it wasn't, other investors would have scooped it up by now.

I would highly recommend if you invest from afar - don't ever work with just one person and visit the area/property even if it requires you to spend 2-3 days in the area.

Good luck to you in your investing career!

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
6y
Originally posted by @Katja Jeschke:
How is the real estate investing market in Ohio?

I was looking to possibly invest in a rental property there.

I also just heard of a lot of newbie real estate investor traps going on there and would like some advice on maybe who or who not to work with?

Also, what other states would you recommend investing in (if any)?

I'm looking to buy a single family home or duplex around $50k that I can fix up for around $10k-20k, refinance, and make a rental cash flow profit along with appreciation over time. Basically using the brrrr process.

Thanks for all your guys' help! <3

"Traps" isn't what I'd consider accurate. A more accurate description would be naïve and inexperienced investors buying solely based on price without understanding the risk level that comes along with low prices, high prices and everything in between. For more info on the risk levels associated with all of the neighborhoods in the Cleveland, Ohio area give The Ultimate Guide to Grading Cleveland Neighborhoods a read.
1 Reply
Alyssa Dyer
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
6y
I'm biased, but Oklahoma City is great. Diverse economy. Fair/mild appreciation. Low property taxes. Rents remain competitive, but don't spike. Happy to share more about the market any time!
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