Investing in Ohio or another state?

[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

[P.J. Bremner]

@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!!