Looking for advice on areas of Columbus, Ohio

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Looking for advice on areas of Columbus, Ohio

Michael Wentzel
Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes

Hello people,

I live in Colorado Springs, CO and I'm currently purchasing, rehabbing and refinancing properties in Pueblo, CO. I've been looking for a second larger market to enter. Being from Ohio, I've considered Cleveland, Toledo and Columbus. I think I've settled on Columbus and have started to look at properties there. There are certainly a lot of cheap properties in the city, but that doesn't necessarily mean they are going to make money. So here's a few questions...

I would like to purchase properties in the $20,000 to $30,000 range. Is anybody doing this? Have you found a good or bad areas for this price point?

Is anybody buying, rehabbing and refinancing? The neighborhoods I've looked at are so riddled with foreclosures I feel like it will be tough to get a decent appraisal after the rehab.

I would like to chat or email with a few investors, Realtors and property managers to learn more. So contact me if you have some insight on Real Estate in Columbus, Ohio.

Mike

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Peter Lohmann
Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
11y

My question is if there are neighborhoods in Columbus where these sort of deals might exist.

There are plenty of neighborhoods where deals just like that do exist. However, your plan has a few flaws:

1) Refinancing the property at 60k doesn't really help you much. For one thing, it reduces your monthly cash flow. For another, you're at risk of going underwater should you ever need to sell. Retail buyers are very scarce.

2) Assuming you plan to buy and hold, properties available to purchase for 30k will require a lot more than 15k in rehab to be solid performers in the long run (more like 50k). That is to say, homes in that price range in Columbus are OLD. They were not built in the 60's, not the 70's - these homes were built 80 to 110 years ago. The maintenance and capex demands are unreal. Without significant up-front investment, you will be nickel-and-dimed to death. Things like sewer and water service lines, main stacks - lots of old stuff that breaks and destroys your numbers for the entire YEAR.

We manage hundreds of these homes and, and our clients are barely breaking even in many cases, due to higher tenant turnover in those neighborhoods, the age of the properties, and the low rents. There's only so much a good property manager can do.

My recommendation is to buy one $100,000 home instead of 3-4 lower-priced homes. Your long-term performance will be higher.

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    11y
    Originally posted by @Michael Wentzel:

    Hello people,

    I live in Colorado Springs, CO and I'm currently purchasing, rehabbing and refinancing properties in Pueblo, CO. I've been looking for a second larger market to enter. Being from Ohio, I've considered Cleveland, Toledo and Columbus. I think I've settled on Columbus and have started to look at properties there. There are certainly a lot of cheap properties in the city, but that doesn't necessarily mean they are going to make money. So here's a few questions...

    I would like to purchase properties in the $20,000 to $30,000 range. Is anybody doing this? Have you found a good or bad areas for this price point?

    Is anybody buying, rehabbing and refinancing? The neighborhoods I've looked at are so riddled with foreclosures I feel like it will be tough to get a decent appraisal after the rehab.

    I would like to chat or email with a few investors, Realtors and property managers to learn more. So contact me if you have some insight on Real Estate in Columbus, Ohio.

    Mike

     Hi Michael,

    You can find some awesome deals across Ohio in the $20,000 - $30,000 range. Especially if your not buying turnkey.

    We just picked up a retail flip estate sale deal.

    $25,000 and needs $20,000 rehab.

    Will list in spring and push the $110,000.

    One of our better deals for sure.

    Thanks and have a great day.

    Podcast Guest on Show #89
    Oz Realty4.5369 Reviews
    WebsiteView Page
    2Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    Michael,  have you run the property tax numbers as compared to CO? We are talking two to three months more rent to cover vs CO. Not to poo poo your idea but keep in mind to make it at least close for cash flow sake. Thanks matt

    1Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Matt R. Good to hear from you old friend. I'm not fleeing Colorado. But in my long-term plan I'll need a second larger market for purchases. Diversification isn't bad.

    Have we talked about taxes before? When I was initially looking in Ohio, taxes scared me away. I tried to get some input from others about how tax rates state-to-state or area-to-area impacted their process in choosing a market. Surprisingly I didn't get much response.

    Don't worry, I have my spreadsheets and I'm running my numbers. Higher taxes in some areas of Ohio make the margins thinner, but in other areas the tax rates haven't put me off.

    Mike

    1Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    Sweet bro, Columbus does look attractive in many ways....pop and job growth, OSU talent powerhouse etc..take care, Matt

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    Columbus Campus

    Total University

    Total

    57,466

    63,964

    Men

    29,421

    32,472

    Women

    28,045

    31,492

    Undergraduates

    44,201

    50,551

    Graduate students

    10,013

    10,161

    Professional students

    3,252

    3,252

    Ohioans

    43,789

    50,258

    Non-Ohioans

    13,677

    13,706

    Foreign students

    6,037

    6,039

    Students with Disabilities*

    1,572

    *Self identified students whose disability has been documented based on OSU standards

    There are over 1000 student organizations. That's more organizing than most countries have.

    thanks,

    Matt

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    I say if your going for Columbo go for the campus gold somehow. 10,000 grad students is quite the pot of tenant gold. 74% live off campus. Thanks, matt

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    OSU Budget, FY 2014 (as approved by Trustees) ...mind boggling numbers when you consider the geographic pin point of where it is allocated.

    Total income $5.25 billion

    State Appropriations

    $503 million

    Other government

    $454 million

    Student fees $962 million

    Auxiliaries (residence halls, athletics, etc.)$307 million

    Health system $2.44 billion

    Other income$579 million

    Total expenditures $5.06 billion

    0Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Matt R. Thanks for doing some research for me. The presence of The Ohio State University and several large corporations, along with population growth have made it interesting for me. I was discouraged that the crime statistics are about the same as Pueblo per capita (not good). However, I think the population growth, economic growth and low prices are enough to interest me.

    0Reply
  • Shawn Price
    Real Estate Investor · Columbus, OH · Member since 2014 · 6 posts · 9 votes
    11y

    @Michael Wentzel 

    If you're interested in OSU's campus area you may want to keep this in mind...http://www.dispatch.com/content/stories/local/2014....

    It may not make much of an impact in the long run but it's something to bear in mind that the numbers may change in the next year or two.  But you're not going to find $30,000 houses close enough to campus for kids to rent anyway.

    That being said, Columbus is a great market, but the majority of $20,000-$30,000 houses on the MLS that I've found will be in a few somewhat sketchy areas. Mainly Franklinton, Olde Town East, The Hilltop and North Linden. I don't know much about North Linden so I can't give you much insight there. The other areas have potential deals but A LOT of vacant houses so you'll really need someone with boots on the ground to give you a good idea because it can vary greatly from street to street.

    In my mind if you're flipping, Olde Town East has a ton of potential because they're big beautiful houses that can be very appealing and can reach the $300,000-$400,000 ARV in certain areas. That being said, stay North of Main St. Way too many vacants anywhere south of Main.

    Franklinton has recently received a lot of media attention because there's a concentrated effort by the city to gentrify the area (though they are obviously trying to avoid that term).  They've already made a lot of progress on the Art District in East Franklinton and they've recently released a plan for West Franklinton. But in my opinion the plan is probably about 5-10 years away from getting the neighborhood where they want it. If you want to read more about their plan you can at http://columbus.gov/planning/westfranklinton/.  There is a ton of market research done for you already there including average rents, vacancy rates and what they plan for each part of the area.

    Anyway, hope that's helpful just my 2 cents.

    2Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    No doubt, there is an element there....I am going to say a bit more challenging than Pueblo demographically for the general area but pockets of decent ones are within reach hopefully.

    0Reply
  • David Rupp
    Rental Property Investor · Columbus, OH · Member since 2013 · 117 posts · 16 votes
    11y

     Hi Michael,

    You can find some awesome deals across Ohio in the $20,000 - $30,000 range. Especially if your not buying turnkey.

    We just picked up a retail flip estate sale deal.

    $25,000 and needs $20,000 rehab.

    Will list in spring and push the $110,000.

    One of our better deals for sure.

    Thanks and have a great day.

    Wow Engelo, that us awesome. 

    David 

    0Reply
  • David Rupp
    Rental Property Investor · Columbus, OH · Member since 2013 · 117 posts · 16 votes
    11y
    Originally posted by @Engelo Rumora:
    Originally posted by @Michael Wentzel:

    Hello people,

    I live in Colorado Springs, CO and I'm currently purchasing, rehabbing and refinancing properties in Pueblo, CO. I've been looking for a second larger market to enter. Being from Ohio, I've considered Cleveland, Toledo and Columbus. I think I've settled on Columbus and have started to look at properties there. There are certainly a lot of cheap properties in the city, but that doesn't necessarily mean they are going to make money. So here's a few questions...

    I would like to purchase properties in the $20,000 to $30,000 range. Is anybody doing this? Have you found a good or bad areas for this price point?

    Is anybody buying, rehabbing and refinancing? The neighborhoods I've looked at are so riddled with foreclosures I feel like it will be tough to get a decent appraisal after the rehab.

    I would like to chat or email with a few investors, Realtors and property managers to learn more. So contact me if you have some insight on Real Estate in Columbus, Ohio.

    Mike

     Hi Michael,

    You can find some awesome deals across Ohio in the $20,000 - $30,000 range. Especially if your not buying turnkey.

    We just picked up a retail flip estate sale deal.

    $25,000 and needs $20,000 rehab.

    Will list in spring and push the $110,000.

    One of our better deals for sure.

    Thanks and have a great day.

    Wow Engelo, that is awesome. 

    David

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    11y
    Originally posted by @David Rupp:
    Originally posted by @Engelo Rumora:
    Originally posted by @Michael Wentzel:

    Hello people,

    I live in Colorado Springs, CO and I'm currently purchasing, rehabbing and refinancing properties in Pueblo, CO. I've been looking for a second larger market to enter. Being from Ohio, I've considered Cleveland, Toledo and Columbus. I think I've settled on Columbus and have started to look at properties there. There are certainly a lot of cheap properties in the city, but that doesn't necessarily mean they are going to make money. So here's a few questions...

    I would like to purchase properties in the $20,000 to $30,000 range. Is anybody doing this? Have you found a good or bad areas for this price point?

    Is anybody buying, rehabbing and refinancing? The neighborhoods I've looked at are so riddled with foreclosures I feel like it will be tough to get a decent appraisal after the rehab.

    I would like to chat or email with a few investors, Realtors and property managers to learn more. So contact me if you have some insight on Real Estate in Columbus, Ohio.

    Mike

     Hi Michael,

    You can find some awesome deals across Ohio in the $20,000 - $30,000 range. Especially if your not buying turnkey.

    We just picked up a retail flip estate sale deal.

    $25,000 and needs $20,000 rehab.

    Will list in spring and push the $110,000.

    One of our better deals for sure.

    Thanks and have a great day.

    Wow Engelo, that is awesome. 

    David

    Thanks David,

    I will show you the deal next time your in town.

    We will do full blown before and after video.

    Its one of those deals of the year lol

    Thanks

    Podcast Guest on Show #89
    Oz Realty4.5369 Reviews
    WebsiteView Page
    1Reply
  • Peter Lohmann
    Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
    11y

    I would like to purchase properties in the $20,000 to $30,000 range.

    I strongly recommend against this. There's a reason veteran (5+ years) investors are not purchasing that asset class, and it's not because they're afraid of hard work.

    0Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Shawn Price Thanks for the article links. My price points wouldn't have allowed me to get too close to campus in any case. Franklinton sounds interesting. If the neighborhood is trending in the right direction, I'm more than happy to be a part of that.

    0Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Peter Lohmann The last couple deals I've done here in Colorado have been purchased around $30,000, rehab about $15,000 and then appraise around $60,000 so I can refinance most of my cash back out of the deal. The neighborhoods are mix of well-kept properties and a few run-down properties. Appreciation is unlikely, but I usually don't have a problem getting the places rented.

    My question is if there are neighborhoods in Columbus where these sort of deals might exist. The first couple properties I looked at in Columbus were in neighborhoods where around 25% of the houses were vacant and foreclosures were everywhere. So I imagine I'm going to struggle to get a good appraisal after the rehab. 

    Any suggestions of where I should purchase in Columbus?

    Mike

    0Reply
  • Peter Lohmann
    Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
    11y

    My question is if there are neighborhoods in Columbus where these sort of deals might exist.

    There are plenty of neighborhoods where deals just like that do exist. However, your plan has a few flaws:

    1) Refinancing the property at 60k doesn't really help you much. For one thing, it reduces your monthly cash flow. For another, you're at risk of going underwater should you ever need to sell. Retail buyers are very scarce.

    2) Assuming you plan to buy and hold, properties available to purchase for 30k will require a lot more than 15k in rehab to be solid performers in the long run (more like 50k). That is to say, homes in that price range in Columbus are OLD. They were not built in the 60's, not the 70's - these homes were built 80 to 110 years ago. The maintenance and capex demands are unreal. Without significant up-front investment, you will be nickel-and-dimed to death. Things like sewer and water service lines, main stacks - lots of old stuff that breaks and destroys your numbers for the entire YEAR.

    We manage hundreds of these homes and, and our clients are barely breaking even in many cases, due to higher tenant turnover in those neighborhoods, the age of the properties, and the low rents. There's only so much a good property manager can do.

    My recommendation is to buy one $100,000 home instead of 3-4 lower-priced homes. Your long-term performance will be higher.

    2Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Peter Lohmann Thank you for your insight. As a property manager I'm sure you've seen the good, the bad and the ugly.

    Mike

    0Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    11y

    @Michael Wentzel  why not Columbus bedroom communities...much more appealing than city limits. If you want cheap properties, just buy from the Columbus land bank. Though, I presume your risk tolerance is sky high...best of luck.

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  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Brandon Sturgill I was born and raised up in Delaware, Ohio. That is the reason I started looking back to Ohio for a second market to enter. I know the bedroom communities are probably safer long-term investments, but I would like to be in the city for a couple of reasons. First, purchase prices are lower so it allows me to learn and make mistakes with smaller amounts of cash. Second, I'm also looking to get to know a market where I can eventually purchase and help others purchase small apartment complexes. So there are many more of those to choose from in Columbus than on the outskirts. Buying small sfh's and mfh's in Columbus will help me get to know the market so I can eventually make good purchases on larger properties.

    Mike

    2Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    11y

    @Michael Wentzel  Best of luck in your ventures. I work downtown so I am a bit insulted from housing in the city. If you find an area you are comfortable with, let me know. I have a contact that is a regional planner. He knows the ins and outs of the entire city...

    937-979-7000
    Realize Multifamily Group11 Review
    View Page
    0Reply
  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    11y

    Stay away from pigs.  And as to good stuff, Columbus is inflated like crazy now days...be smart.  @Matt R. is right about the taxes.  

    2Reply
  • Michael Wentzel
    OP
    Investor · Colorado Springs, CO · Member since 2013 · 643 posts · 280 votes
    11y

    @Ben Leybovich Thanks for chiming in. I read your blog about pigs a couple days back. Wrestling with whether I agree with you or not...

    I assume some of your portfolio is in Ohio. Are there areas of Ohio that you like?

    Mike

    0Reply
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