Guaranteed 21% Annual Appreciation? Columbus, Oh?...where else?

Multi-Family and Apartment Investing
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Guaranteed 21% Annual Appreciation? Columbus, Oh?...where else?

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

How is your MF market price appreciation?

I hear a lot of folks claiming their market is on "fire", but nobody ever supports that with data...our local MF market in Columbus, Ohio has appreciated at a year-over average of 21% in the 20 most productive zip codes for the last 5-years...the highest appreciating zip code grew at a rate of 64%...

How is your MF market price appreciation in other major metro areas?...Raleigh? Nashville? Indianapolis?....others?

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Nick B.
Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
5y

Past performance is not a guarantee of future results. 

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  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y
    Originally posted by @Brian Garlington:

    Brandon, are you a Broker, or an agent? You are using both titles in your thread. I wasn't sure so I did a Google search of Hypothetical Insight in Columbus, Ohio and the first thing that popped up shows an address on Carpenter Street that (according to Google) is permanently closed. We all know that Google is not known for being super accurate, but you may want to look into why that's the first thing that pops up.

    As for Columbus....I have a lot of love for the area and have lots of family there.

    I got curious and did the same search, I got a house in Clintonville and saying they open at 6am .. walking distance to Crest and Studio 35, I'm jealous except for the 6am part.

    4Reply
  • Jim K.
    Rental Property Investor · Charlotte, NC · Member since 2017 · 271 posts · 259 votes
    5y

    @Brandon Sturgill

    I wouldn’t recommend guaranteeing future returns. Especially for 21% annual appreciation in Columbus. You can hope to see that, have data to support that, etc but guaranteeing it is foolish.

    Everyone should tread lightly and do their own research.

    4Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    Yeah it's 2021 the historically junk markets are getting lifted up because the class A/B areas are harder to find deals. Just take a look at Gary IN many of the properties there are 50% higher then a year ago. That doesn't mean that kind of appreciation is sustainable. My guess is when/if market falls these junk areas seeing double digit appreciation will fall much harder then the stabler class A/B areas. 

    7Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    5y

    @Brandon Sturgill

    Wow.. dont know about guaranteed

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Account Closed:

    I swear to god most of this Columbus growth is just our fleet of boiler-room realtors with their biggerpockets keyword nets capturing all the wandering California money.  Y'all killing me. What am I supposed to do, start buying in Newark or Circleville? Yuck

    I do kick myself every time I drive by a few of the small local multifamilies I got outbid on by what seems like nickles 3 or 4 years ago.  I didn't know what an escalation clause was then.

    In my experience, the out-of-state money buys in the C neighborhoods and the in-state money buys in A/B neighborhoods. I do not think there is that much competition between the two groups.

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Brian Garlington:

    Brandon, are you a Broker, or an agent? You are using both titles in your thread. I wasn't sure so I did a Google search of Hypothetical Insight in Columbus, Ohio and the first thing that popped up shows an address on Carpenter Street that (according to Google) is permanently closed. We all know that Google is not known for being super accurate, but you may want to look into why that's the first thing that pops up.

    As for Columbus....I have a lot of love for the area and have lots of family there.

     He is a broker and an agent in Columbus, Ohio.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Brandon Sturgill Cleveland has been and is still kicking ***!! 3, 4 5 years ago you could buy as many MF as you wanted for 10- 15, 20k per unit. Now good luck finding one anywhere under 35k per unit. Does not exist. SF same, more then doubled in the last 3,4, 5 years...... Try finding a nice SF under 60k,,,, not going to happen.  While past performance does not dictate future . SO nobody can clam guarantee 21% per year appreciation.  So if you purchased a SF for 30k, , , 4 5 years ago, those same props are now selling for 90- 100k. Sure you would have to make improvements of say , 15k, sill a hell of a return We used to provide our clients with 25- 30% net caps, YES NET, now 10 -14% still good . NOT SOLICITING !! 

    All the best 

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

    I swear to god most of this Columbus growth is just our fleet of boiler-room realtors with their biggerpockets keyword nets capturing all the wandering California money.  Y'all killing me. What am I supposed to do, start buying in Newark or Circleville? Yuck

    I do kick myself every time I drive by a few of the small local multifamilies I got outbid on by what seems like nickles 3 or 4 years ago.  I didn't know what an escalation clause was then.

    In my experience, the out-of-state money buys in the C neighborhoods and the in-state money buys in A/B neighborhoods. I do not think there is that much competition between the two groups. 

    I am in-state but only buy here in north linden...  I admit I keep to the B-ish "good blocks" though, so I guess that does fit the pattern.. I also admit my model is BRRRR so my competition mostly seems to be local flippers, I'm not buying in the same areas where the out of state buy-and-hold money seems to be going.......
    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Account Closed:
    Originally posted by @Remington Lyman:
    Originally posted by @Account Closed:

    I swear to god most of this Columbus growth is just our fleet of boiler-room realtors with their biggerpockets keyword nets capturing all the wandering California money.  Y'all killing me. What am I supposed to do, start buying in Newark or Circleville? Yuck

    I do kick myself every time I drive by a few of the small local multifamilies I got outbid on by what seems like nickles 3 or 4 years ago.  I didn't know what an escalation clause was then.

    In my experience, the out-of-state money buys in the C neighborhoods and the in-state money buys in A/B neighborhoods. I do not think there is that much competition between the two groups. 

    I am in-state but only buy here in north linden...  I admit I keep to the B-ish "good blocks" though, so I guess that does fit the pattern.. I also admit my model is BRRRR so my competition mostly seems to be local flippers, I'm not buying in the same areas where the out of state buy-and-hold money seems to be going.......

    Yup! But I also assume the out-of-state money is flushing more local flippers into your areas.


    I think the main issue is the regulation against building more housing. I would like to see the city deregulate housing so we do not have the issue of 20 offers for every listing that hits the market.

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  • Jeff Piscioniere
    Investor · Shelton, CT · Member since 2016 · 218 posts · 225 votes
    5y

    Probably just my CT/New England mindset, but of the 3 big reasons to buy investment properties (cashflow, mortgage pay down, price appreciation), price appreciation is a distant 3rd place, ESPECIALLY as you say, if rent rates are not keeping pace with these price appreciations. This has the same dangerous bubble written all over it we saw back in 2004-2007. I say this jokingly, but half serous too, might as well take a peak at which Canadian weed stocks Reddit is pumping today.

    Granted, Columbus and the Midwest as a whole have a much brighter future than the has-been, high tax, one-party, poor economy cities and states of the northeast, but a lower growth rate would make me feel more comfortable on consistency.

    @Brandon Sturgill, I wish you and the area nothing but the best because nothing pleases me more than seeing a part of the country deemed by the hoity-toity types as fly over country explode back on the scene. It’s a great American story! Just seems to be getting too white hot right now.

    3Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    5y
    Originally posted by @Remington Lyman:
    Originally posted by @Account Closed:
    Originally posted by @Remington Lyman:
    Originally posted by @Account Closed:

    I swear to god most of this Columbus growth is just our fleet of boiler-room realtors with their biggerpockets keyword nets capturing all the wandering California money.  Y'all killing me. What am I supposed to do, start buying in Newark or Circleville? Yuck

    I do kick myself every time I drive by a few of the small local multifamilies I got outbid on by what seems like nickles 3 or 4 years ago.  I didn't know what an escalation clause was then.

    In my experience, the out-of-state money buys in the C neighborhoods and the in-state money buys in A/B neighborhoods. I do not think there is that much competition between the two groups. 

    I am in-state but only buy here in north linden...  I admit I keep to the B-ish "good blocks" though, so I guess that does fit the pattern.. I also admit my model is BRRRR so my competition mostly seems to be local flippers, I'm not buying in the same areas where the out of state buy-and-hold money seems to be going.......

    Yup! But I also assume the out-of-state money is flushing more local flippers into your areas.


    I think the main issue is the regulation against building more housing. I would like to see the city deregulate housing so we do not have the issue of 20 offers for every listing that hits the market.

    Sorry to derail this thread, but our zoning code is being updated and they are taking feedback! Love to see the ability to have ADUs and allow 2-4 multifamily where right now only SFH is allowed. The housing crunch is unreal.

    https://www.columbus.gov/zonin...

    Anyway back to the regularly scheduled program

    2Reply
  • Justin Garland
    Developer · Columbus, OH · Member since 2019 · 11 posts · 7 votes
    5y

    @Remington Lyman Deregulate housing? Zoning code is in place for a reason and it just so happens that Columbus is currently seeing its first major overhaul in nearly 70 years. This should help ease the need for multiple variances or rezoning to achieve denser infill projects. 

    1Reply
  • James MaraditsPro Member
    Real Estate Broker · Cleveland, OH · Member since 2015 · 239 posts · 224 votes
    5y
    8Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    Well you said "5 year ago" because 3-5 year was exactly the bottom for Columbus, OH so it could be the highest point. But I agree with you this area has lot of potential because this city/state has the most MF and job growth is good too.

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

    @Remington Lyman Deregulate housing? Zoning code is in place for a reason and it just so happens that Columbus is currently seeing its first major overhaul in nearly 70 years. This should help ease the need for multiple variances or rezoning to achieve denser infill projects. 

     Yeah, I am excited to see the result of this. Hopefully, it helps the housing shortage in Columbus. I do not hold my breath for anything the government pledges, though.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    Also it's not about the price but about the cap rate compression, cap rate compression from 15% to 10% usually is accelerated within a year or so but the moment it hits 8% cap rate, things will be in a much more normal. 

    For comparison, in our CA market, when price bottomed at 2009-2012 til now, our return of equity is about 30,000 percent.

    Beside OH, STL market is also going crazy, some flipper is selling 900sqft house for $240 sqft , that's a new record created in that market ha ha....

    2Reply
  • Brandon SturgillBusiness Member
    OP
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Mike B. I used to look at Cash-on-Cash, but it's guesswork...returns on paper and actual property operations are vastly different...it's generally impossible to get accurate with CoC unless you are buying with cash...even then, it's not a good indicator of value...my personal first level filter is the relationship to purchase price and rents...I see too many investors analyze themselves out of the market because they cannot get their number to work...

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

    Good points indeed @Saleh Riazi

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

    Good point @Jay Hinrichs I think that's why I ended the post title with a question mark ;) 

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

    @Account Closed come on down to Lancaster...we just did a 41% IRR deal on a commercial MF.

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

    @Brian Garlington Good looking out...very helpful information...apparently my $300/mo marketing firm that was supposed to clean up our local search will be fired immediately.

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

    @Steve K. The first mistake is looking at public data...you can get about 5% accurate...we dissect the market...so, the 21% appreciation is the average of 5-yr price appreciation of only MF properties across the top 20 performing zip code by volume of sales...this is MLS data...right from the source. If we plug in off-market transactions our 21% increases significantly...

    Here is an example of 1 zip

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

    @Jim K. Truth be told I was really looking for you guys in similar markets to do some math and tell me how your market looks.

    1- download all closed MF transaction from the MLS for the last 5-years

    2- determine the top 20 zip codes by sales volume

    3- calculate the rate of change by zip code

    4- create power point

    5- share it on BP

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

    @Henry Lazerow take a look at the debt position and bond rating for Chicago vs. Columbus...I'll wait for your reply. Chicago is a dumpster fire, man. Get out while you can. 

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

    I hear you @Bob S. I'm down with Cleveland...I send buyers there routinely looking for lower barriers to entry and off-the-charts ROI. It's an incredible market for putting cash to work.

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