I bought 30k pigs in Ohio with success.

19 Replies

30k houses in OH have been a topic on bp. Because they gave me my start I had to give my 2 cents.

I bought the low cost pigs in Ohio (Cincinnati) to hold and it worked for me. Because of this I get asked all the time from guys/gals "you got started buying houses for 10-30k I think I can afford that. is this how I should start?"

And to all those people I say probably not.

To begin let me explain where I buy: The median house price is 90k, there is a 60/40 OO to rental split, 25% of the residence have bachelors degrees. Call that c class b class I don't care in these areas There are some investors that will buy a pig and put lip stick on it. Others may do one better and buy the pig a nice new dress. From day one I knew the pigs I bought I would gut, and turn it into a nice Christmas ham. I bought the 15k house that needed 30k in rehab. Or the 7k house that needed 60k in rehab. Why? Because my labor/skill was all I had to offer at the time. My self and my partner wanted to get into REI, we had little money, little experience, no understanding of private money, lots of time, and lots of skills in the construction trades. We would do all 30k in renovations our self and it would only cost us 10k ( not paying ourselves). And it worked, BUT it sucked! It's hard it takes to long and this is not passive at all.

The main concern with the 30k houses is cap ex. We minimized this by adding much of our own labor. We would update everything in the properties to avoid as much cap ex down the road while also tenant proofing. This has left us with fantastic rental properties. However it was a very difficult 3 years to get there. I will be leaving this strategy behind. I would advise others to take an alternate route as well.

Instead of buying a $15k house that needed $30k of rehab, you might have considered a $25k house that only needed $5k in rehab.  Your turnaround time would have been much shorter and you wouldn't have had to spend so much of your own time doing it.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

Very good post.

Originally posted by @Jered Sturm :

30k houses in OH have been a topic on bp. Because they gave me my start I had to give my 2 cents.

I bought the low cost pigs in Ohio (Cincinnati) to hold and it worked for me. Because of this I get asked all the time from guys/gals "you got started buying houses for 10-30k I think I can afford that. is this how I should start?"

And to all those people I say probably not.

To begin let me explain where I buy: The median house price is 90k, there is a 60/40 OO to rental split, 25% of the residence have bachelors degrees. Call that c class b class I don't care in these areas There are some investors that will buy a pig and put lip stick on it. Others may do one better and buy the pig a nice new dress. From day one I knew the pigs I bought I would gut, and turn it into a nice Christmas ham. I bought the 15k house that needed 30k in rehab. Or the 7k house that needed 60k in rehab. Why? Because my labor/skill was all I had to offer at the time. My self and my partner wanted to get into REI, we had little money, little experience, no understanding of private money, lots of time, and lots of skills in the construction trades. We would do all 30k in renovations our self and it would only cost us 10k ( not paying ourselves). And it worked, BUT it sucked! It's hard it takes to long and this is not passive at all.

The main concern with the 30k houses is cap ex. We minimized this by adding much of our own labor. We would update everything in the properties to avoid as much cap ex down the road while also tenant proofing. This has left us with fantastic rental properties. However it was a very difficult 3 years to get there. I will be leaving this strategy behind. I would advise others to take an alternate route as well.

haha

Thanks for sharing Jerry.

Bough 40 pigs last year. Looking at 100+ this year.

Some of them won't be "pigs" tho 

Probably $30,000 or higher purchase purchase haha

With that being said, check out my blog on why you shouldn't put lipstick on a PIG haha

http://www.biggerpockets.com/renewsblog/2014/07/19...

Thanks and lets catch up soon ;)

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89

@Dawn Anastasi  yes that would have been easier but the additional work will limit my cap ex down the road. Also I didn't know anyother way.

@Engelo Rumora   I believe you are one of the few people that have the energy to wrangle 40 pigs a year! (Total compliment) Congrats on that accomplishments.  PM me when you're headed down to Cincinnati to look at new markets.

@Ben Leybovich   Hopefully all good smiles! 

Originally posted by @Jered Sturm :

@Dawn Anastasi  yes that would have been easier but the additional work will limit my cap ex down the road. Also I didn't know anyother way.

@Engelo Rumora  I believe you are one of the few people that have the energy to wrangle 40 pigs a year! (Total compliment) Congrats on that accomplishments.  PM me when you're headed down to Cincinnati to look at new markets.

@Ben Leybovich   Hopefully all good smiles! 

Will do mate,

I actually have a meeting in Cinci on the 26th.

Lets catch up for coffee?

Thanks

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89

Oh, oh - can I come ya'all?  I wanna come.  I got friends investing in Cinci that haven't been able to find a damn thing that makes sense in a year. I've had people looking for me for a years, and have not been able to come up with anything either.  Although I look at the big stuff, but still...

Besides, I like coffee.  In fact, I know the greatest hole in the wall Thi place across from UC. @Jered Sturm  - @Engelo Rumora  is buying!  Can I come?  I wanna learn about pigs - can I, can I?

Originally posted by @Ben Leybovich :

Oh, oh - can I come ya'all?  I wanna come.  I got friends investing in Cinci that haven't been able to find a damn thing that makes sense in a year. I've had people looking for me for a years, and have not been able to come up with anything either.  Although I look at the big stuff, but still...

Besides, I like coffee.  In fact, I know the greatest hole in the wall Thi place across from UC. @Jered Sturm  - @Engelo Rumora is buying!  Can I come?  I wanna learn about pigs - can I, can I?

Jered,

What you think?

Should we let him attend?

I don't trust the guy. Will have to bring my gun this time haha

Grazie

Love you Ben xoxo

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89

Haha, 

Well @Engelo Rumora  & @Ben Leybovich   I am looking forward to this! I'm not sure what I got my self into I'm meeting with an Aussie, and a Russian both of which have now publicly admitted to needing a gun to be in each others presence haha. You guys bring your guns I'll just bring my business partner should be a good time!

Originally posted by @Jered Sturm :

Haha, 

Well @Engelo Rumora & @Ben Leybovich   I am looking forward to this! I'm not sure what I got my self into I'm meeting with an Aussie, and a Russian both of which have now publicly admitted to needing a gun to be in each others presence haha. You guys bring your guns I'll just bring my business partner should be a good time!

No guns on my end.

Just my good friends Chico, Chico and Chico haha

Thanks

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89

Originally posted by @Jered Sturm :

@Dawn Anastasi  yes that would have been easier but the additional work will limit my cap ex down the road. Also I didn't know anyother way.

This was the most killer point in the entire thread:

A common theme seems to be out of state investors buying cheap houses, doing $5,000 cosmetic "rehabs", renting them out, bragging about the positive cash flow for awhile and then BANG, a few months later they are back on BP, screaming bloody murder and complaining about the leaking roof that has caused a ceiling to collapse. 

and then we have Big @Ben Leybovich  , piling on, pointing out the smeared lipstick on our $30k pigs, dancing on the dead carcass of the out of state investor, and "P r o b a b l y" wagging his "I told you so" finger at his computer screen, and grinning ear to ear as he pats himself on the back for being right again.  

Pay me now (at acquisition rehab) or Pay me later (with repeated big dollar repairs). 

DL

p.s.  I love this thread.  : )

so would you consider 4 SFR purchased for $60,000 total / $15,000 each, currently renting for $500 per month each and in low income neighborhoods with no chance of appreciating, pigs?! thanks!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you