How do I market a multi-family in Columbus Ohio?

Multi-Family and Apartment Investing
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How do I market a multi-family in Columbus Ohio?

Todd J Killian
Columbus, OH · Member since 2017 · 25 posts · 20 votes

I have a multi unit in Columbus, Ohio under contract but I have not gotten much traction on buyers and feel I am missing something.  We are looking $385k purchase price and with monthly rents at $4375 when all units are rented. The rent is below market, so it could be raised.   What is a buyer looking for on something like this?  What is considered a good deal?

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Zeke Liston
Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
5y
Originally posted by @Todd J Killian:

I have a multi unit in Columbus, Ohio under contract but I have not gotten much traction on buyers and feel I am missing something.  We are looking $385k purchase price and with monthly rents at $4375 when all units are rented. The rent is below market, so it could be raised.   What is a buyer looking for on something like this?  What is considered a good deal?

I'd love to see this deal. Can you send it over?  

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    What is a buyer looking for on something like this? What is considered a good deal?

    Wow, seems you may have some issues about not knowing if you bought right.  Wholesaler, right?

    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    Steve, right! I said I have it under contract and am looking for a buyer.  It would be great if you added some assistance instead of being critical.  I am asking for help here!  

    0Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Todd J Killian:

    I have a multi unit in Columbus, Ohio under contract but I have not gotten much traction on buyers and feel I am missing something.  We are looking $385k purchase price and with monthly rents at $4375 when all units are rented. The rent is below market, so it could be raised.   What is a buyer looking for on something like this?  What is considered a good deal?

    I'd love to see this deal. Can you send it over?  

    2Reply
  • Armin Nazarinia
    Saint Paul, MN · Member since 2018 · 189 posts · 107 votes
    5y

    @Todd J Killian I would be looking for rent roll, photos of the units if available, if possible previous 12-24 months income and expenses, pro forma rents for the area so I know what it could get to, cma for the property to see what the arv would potentially be and finally what recommended work needs to be done to it, age or mechanicals, roof etc and what should be done to get to that pro forma. There is more than that but those are some items I would start with feel free to message me if you have more questions. I'd like to see that deal also :).

    2Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y
    Originally posted by @Todd J Killian:

    Steve, right! I said I have it under contract and am looking for a buyer.  It would be great if you added some assistance instead of being critical.  I am asking for help here!  

    What neighborhood is it in?
    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Account Closed It is in the Hilltop

    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Armin Nazarinia Good info, thank you!

    1Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    How have you been trying to market it so far? @Todd J Killian

    [email protected]614-963-3340
    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Brandon Goldsmith mostly through local channels.  I posted the property on BP today too. 

    1Reply
  • Arun Gambhir
    Member since 2019 · 2 posts · 1 vote
    5y

    @Todd J Killian..Can you send additional details around proforma, current rent rolls, appraisal . arun at livelaughlovehome.com

    1Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Todd J Killian you're trying to sell the most expensive property in the neighborhood...unless it's a 12+ unit property

    937-979-7000
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    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Brandon Sturgill interesting way to look at it. This is a 7 unit, a 4 unit sold on the same street for about same about 2 years ago: https://www.zillow.com/homedetails/30-36-N-Eureka-Ave-Columbus-OH-43204/296625158_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

    1Reply
  • Thomas WillinghamPro Member
    Investor · Birmingham, AL · Member since 2020 · 32 posts · 26 votes
    5y

    Are you the owner or wholesaler?

    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Thomas Willingham wholesaler

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Todd J Killian:

    I have a multi unit in Columbus, Ohio under contract but I have not gotten much traction on buyers and feel I am missing something.  We are looking $385k purchase price and with monthly rents at $4375 when all units are rented. The rent is below market, so it could be raised.   What is a buyer looking for on something like this?  What is considered a good deal?

    It is greater than 4 units so buyers cannot use conventional debt. Out of state investors have a hard time getting lending for this type of deal since they do not live in Columbus, Ohio.

    I know this deal is in a C class neighborhood. You should try to talk the seller down on price or get them to list it on the market so they can get it in front of more buyers.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Jay Elaine Slaydon
    Interior Decorator · Charlotte · Member since 2021 · 20 posts · 3 votes
    5y

    @Todd J Killian try doing some Facebook posts in marketplace. And searches to see what the rate is.

    0Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y
    Originally posted by @Todd J Killian:

    @Brandon Sturgill interesting way to look at it. This is a 7 unit, a 4 unit sold on the same street for about same about 2 years ago: https://www.zillow.com/homedetails/30-36-N-Eureka-Ave-Columbus-OH-43204/296625158_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

     That's misleading data on zillow, so thus a bad comp. If you look it up on the auditor site, that transfer was 5 total parcels,  30-36 eureka is only one of the 5 that transferred together for 378k 

    2Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Account Closed good catch.  I was on my phone and saw that property.   I did not pull comps on this property as I didn't think that is how multifamily did things.  I was always under the impression that it was about monthly income.  Am I wrong about that?  

    0Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Todd J Killian, commercial is both about comps and income.  At this price and even this size, you are playing in an odd space where you will attract sophisticated (those looking more at income) and unsophisticated (those looking at comps) buyers.  Only knowing a little about Hilltop, it is a rougher neighborhood, so your sophisticated buyers are going to be dinging value with higher vacancy and turnover costs.  Your unsophisticated buyers are likely going to ding you because they are afraid to show up there at midnight to when someone locks themselves out.

    But on to your original question, how to market it: craigslist, Facebook marketplace, calling agents that you see listing other multi families, calling other multifamily owners, etc.  If you are doing those things, and getting a lot of people looking but no buyers, I would venture to guess that this is like all other real estate: you have it priced too high.

    And Remington makes a great point: beyond the financing, for the landlord next door, a duplex to fourplex seems manageable, but jumping into a 7 unit might feel daunting for those not as well versed with real estate.

    0Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    Reaching out to multi-family owners directly is a good idea, thanks.  I will look for some agents too.  @Evan Polaski That was helpful, and that is why I posted, was to find help.  I agree with @Remington Lyman this is not for a new investor, this is for a more seasoned investor. Currently it is managed by a management company and I would suspect whoever buys it would do the same thing.  
    As far as the price, I am also looking for help here. At 385k, the monthly payment with 20% down would be around $1500/mo + $500/mo taxes plus insurance would be around $2200-2300 PITI. When fully rented it bring in $4375 (but should be $4725 or more). So to me this looks like it can cover 50% of the a payment but a little more with a 20% lender.

    0Reply
  • Rob Gillespie
    Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    5y

    @Todd J Killian

    I always say that good deal Will bring all of the buyers you need.

    At a glance that looks like a six Cap. If it has more potential, how much money will it take to bring that potential out and how much of an increase in rents?

    I am personally selling an off market 40 unit right now that is a value add, and I am not marking it anywhere. I am lightly putting it out there and the buyers are coming to me. With that said, I have all of the data that it will take to turn it around and make it a winner.

    I’m not saying that your deal is not good or I’m not saying that you do not have the data, I’m just telling you what brings the buyers.

    Hope that helps

    1Reply
  • Todd J Killian
    OP
    Columbus, OH · Member since 2017 · 25 posts · 20 votes
    5y

    @Rob Gillespie That is one thing I was not sure of... the numbers.   You are right, at this time I have some basic numbers and I had a feeling it was not enough.  What is "All the data that it will take to turn it around?"  Is that rehab or repair costs?  I have expenses from the last 12 months, I have rent history and I have rental comps in the area.   It was rehabbed about 5 years ago.   

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    You can put it on the BP Marketplace or add it to the biggest real estate investing Facebook group in OH. 

    I'm sure that deal will fly off the shelf considering everything else checks out on the deal! 

    0Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y
    Originally posted by @Todd J Killian:

    @Rob Gillespie That is one thing I was not sure of... the numbers.   You are right, at this time I have some basic numbers and I had a feeling it was not enough.  What is "All the data that it will take to turn it around?"  Is that rehab or repair costs?  I have expenses from the last 12 months, I have rent history and I have rental comps in the area.   It was rehabbed about 5 years ago.   

    I think at this level you want to figure out the CAP rate, eg whatever investors are paying for cash flowing properties in that area. The cap rate should reflect the demand, risk, reward etc for a building and a neighborhood.

    Someone with more experience would have to confirm/deny this, but I would assume you can only take into account current rents and expenses to determine the NOI, then the general cap rate, to determine the market value of this property. However I have no idea with the current market, fundamentals seem out the window. Maybe people are willing to pay for potential rents, even in hilltop?

    Disclaimer: I am still stuck in 1-4 unit resi-land so I haven't had to put on my big boy pants (buying and selling based around cap rates) yet. 

    However I will say, if you do pick comps, they have to be "arms length" and advertised to the open market .. Even if that comp for Eureka was just that one 4-unit, it appears to never have been on the market, the Eureka deal looks like it was some sort of off-market deal related to someone 1031'ing out of those 5 properties. I noticed that by the Zillow price history noting it was "public records" and not sourced off MLS.

    If this property were in North Linden I'd be wooing you like it was prom night though, lol. 

    1Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    Trying to market a property based on filling vacancies in the future and raising rents "to market" begs the question of why is the building not full and the question of why are the rents so low?  I suspect the more sophisticated investors are put off by this approach.  How much are the gross rents currently?

      

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