Possible deals in Columbus, OH

16 Replies

Hi all. I posted a thread several months ago about selling my house in Alabama and moving to Ohio for a two year assignment. I got alot of good advice at that time about what to do with the equity from my home sale, etc.. Well, now we're in Ohio and everything is going fine. I am renting a house and have banked the equity (~$65k) from my house sale in Alabama. My original plan was to just put that money in a mutual fund and let it make a little money until we're ready to go back to Alabama where I would use it for the down payment on a lake house. 

A colleague at work has discussed some of his rental properties and another one has come up that he doesn't want to use any more of his 401k to fund so he told me about it. It's very similar to his other 2 properties that he's making money on but I can't seem to make the numbers work on it. If I could work it out, I would think about investing my equity in a rental property instead of having it sit in the bank and this would, hopefully, get my REI career started.

So, what I'd like to get advice on is whether I should bite the bullet now and try to find a different (good) property in Columbus and get started with my equity money or not. I can't think of another time when I'll have this money available. But, if I do this, I'll be using the money that I need to use as a down payment when I go back to Alabama. I know that I can use a much smaller down payment on my primary residence when I go back (5% I think) so that might be helpful. 

Are there any investors in the Columbus area that could give me advice on the rental market here? Maybe outside of Dublin where the houses and the property taxes are very expensive? There are several things that I am stuck on:

  • Should I go for a smaller, cheaper house in a less than stellar neighborhood or go with a nicer house in a good neighborhood that's also in a very good school district? 
  • Do you always have to put 20-25% down on a rental home mortgage? 
  • What about property management? I think I can do the property management now until I go back to Alabama but what about after that? I have big concerns about living in Alabama and having a rental house in Ohio but I know the market is good here so it's attractive.
  • When I move back, are there any additional expenses for being an out of state investor (taxes, insurance, etc...)?

I'm really ready to do this but I haven't been able to pull the trigger yet. It's like I just need someone to tell me that I can do it and tell me where to start but I know it's not that easy. 

Any advice would be greatly appreciated. 

Thanks

@Matt Smith there are a lot of questions there but to get started would look at a few other options.   If you in Ohio for two years why not look to do a house hack with a multi-unit and after your two year assignment you can evaluate if you want to sell/1031 your Ohio property into another property when you go back to Alabama or keep it, sell and take profit as part of homestead exemption or just keep.   Additionally by doing this way you can do it with as little as 3% down.  Look to find a place that would allow you to live for free while also taking cash flow would seem to be ideal.    As far as neighborhood would really depend on your strategy as investor as there are number of factors to consider.

Cheers,

Art

Thanks for the reply @Art Mimnaugh . Unfortunately, I am locked into a 2 year lease on the house I'm in now or that would certainly be an option. Outside of the house hack idea, are there other options that would be a little lower cost than being in the $290- $350k range in Dublin or Powell? My thought is, for the first time I do this, I'd like to start a little bit smaller to get to know the process and then maybe go bigger. 

@Matt Smith absolutely just depends on what your strategy is. If you are ok to buy a value add and manage some cosmetics upgrades there are a number sub-$100k properties that with a well managed rehab would cash flow well. On the other side you could look at some of the SFH portfolio deals that are consistently out there as well, just have to really run numbers to account for neighborhood and expenses.

I would connect with a local investment realtor (@Robert Ellis ) and the local meet ups to meet and understand what’s happening in the area.   A large number of the listed deals are being bought by OOS investors (I am one) so being there and hustling to find the opportunities and deals that are never listed will put you in a stronger position.

Cheers,

Art

Hi @Matt Smith - Glad to hear you are looking to invest in Columbus! If you have any questions about the Columbus areas or market, please let me know.

Originally posted by @Art Mimnaugh :

@Matt Smith absolutely just depends on what your strategy is. If you are ok to buy a value add and manage some cosmetics upgrades there are a number sub-$100k properties that with a well managed rehab would cash flow well. On the other side you could look at some of the SFH portfolio deals that are consistently out there as well, just have to really run numbers to account for neighborhood and expenses.

I would connect with a local investment realtor (@Robert Ellis) and the local meet ups to meet and understand what’s happening in the area.   A large number of the listed deals are being bought by OOS investors (I am one) so being there and hustling to find the opportunities and deals that are never listed will put you in a stronger position.

Cheers,

Art

 Thanks for the mention Art!  Always a pleasure be able to help you! 

Originally posted by @Sarah Wheeler :

Hi @Matt Smith - Glad to hear you are looking to invest in Columbus! If you have any questions about the Columbus areas or market, please let me know. I am more than happy to provide some answers on property management, as well!

Good luck!

 Sarah - please give me your input on this....What areas in Columbus would you consider a "B" with a good return?  Focusing on the MUH listings that have come on market in the last two weeks which ones do you like the best with the given criteria? Much appreciated. 

@Matt Smith . Hi! Welcome to Columbus from an investor from California.  To answer your questions, this is what I have seen so far.

Smaller cheaper house in solid C class neighborhoods cash flows the best. Better COC return if you will. But since you are right in town and Columbus haven't shot down the short term rental law yet, have you thought about Air BnB type of investments if you want to get a sexier home in a A, B class neighborhood? The math works really well if you are savy. I have done really well with my condo in SF near Moscone convention center and I am a Super Host. Just a thought. You can always use it for yourself and don't have to commit to a permanent tenant.

Down payment: if you are going 4 unit and more, be prepare to do 25% down. FHA possibilities with 5, 10 % down if single or less than 4 units. Mind you, you may be in competition with other offers so sellers take this very seriously. Your agent such as @Robert Ellis who will work hard for you can advise. 

Property management is like your husband and wife in a marriage.  You have to pick the right one for your investment to be in harmony.  This is so important and I can't stress this enough. Often times, if you get a commercial property that you like, you have to ask a PM if it is a good one that they will consider managing.  Their opinions are most important and you will find them to be more honest than you will think. 

I think managing out of state is the same in terms of taxes, insurance, etc. But if you form an LLC, for example for myself I live in California. They will charge me $800 state service fee flat, even though my LLC is in another state so do your research.

Good luck!  Let me know which hood in Columbus fancys you. 

Originally posted by @Angela Yan :

@Matt Smith . Hi! Welcome to Columbus from an investor from California.  To answer your questions, this is what I have seen so far.

Smaller cheaper house in solid C class neighborhoods cash flows the best. Better COC return if you will. But since you are right in town and Columbus haven't shot down the short term rental law yet, have you thought about Air BnB type of investments if you want to get a sexier home in a A, B class neighborhood? The math works really well if you are savy. I have done really well with my condo in SF near Moscone convention center and I am a Super Host. Just a thought. You can always use it for yourself and don't have to commit to a permanent tenant.

Down payment: if you are going 4 unit and more, be prepare to do 25% down. FHA possibilities with 5, 10 % down if single or less than 4 units. Mind you, you may be in competition with other offers so sellers take this very seriously. Your agent such as @Robert Ellis who will work hard for you can advise. 

Property management is like your husband and wife in a marriage.  You have to pick the right one for your investment to be in harmony.  This is so important and I can't stress this enough. Often times, if you get a commercial property that you like, you have to ask a PM if it is a good one that they will consider managing.  Their opinions are most important and you will find them to be more honest than you will think. 

I think managing out of state is the same in terms of taxes, insurance, etc. But if you form an LLC, for example for myself I live in California. They will charge me $800 state service fee flat, even though my LLC is in another state so do your research.

Good luck!  Let me know which hood in Columbus fancys you. 

 Thanks so much for the kind words Angela!  - we make a great team! Its a pleasure working with you. 

Originally posted by @Matt Smith :

Hi all. I posted a thread several months ago about selling my house in Alabama and moving to Ohio for a two year assignment. I got alot of good advice at that time about what to do with the equity from my home sale, etc.. Well, now we're in Ohio and everything is going fine. I am renting a house and have banked the equity (~$65k) from my house sale in Alabama. My original plan was to just put that money in a mutual fund and let it make a little money until we're ready to go back to Alabama where I would use it for the down payment on a lake house. 

A colleague at work has discussed some of his rental properties and another one has come up that he doesn't want to use any more of his 401k to fund so he told me about it. It's very similar to his other 2 properties that he's making money on but I can't seem to make the numbers work on it. If I could work it out, I would think about investing my equity in a rental property instead of having it sit in the bank and this would, hopefully, get my REI career started.

So, what I'd like to get advice on is whether I should bite the bullet now and try to find a different (good) property in Columbus and get started with my equity money or not. I can't think of another time when I'll have this money available. But, if I do this, I'll be using the money that I need to use as a down payment when I go back to Alabama. I know that I can use a much smaller down payment on my primary residence when I go back (5% I think) so that might be helpful. 

Are there any investors in the Columbus area that could give me advice on the rental market here? Maybe outside of Dublin where the houses and the property taxes are very expensive? There are several things that I am stuck on:

  • Should I go for a smaller, cheaper house in a less than stellar neighborhood or go with a nicer house in a good neighborhood that's also in a very good school district? 
  • Do you always have to put 20-25% down on a rental home mortgage? 
  • What about property management? I think I can do the property management now until I go back to Alabama but what about after that? I have big concerns about living in Alabama and having a rental house in Ohio but I know the market is good here so it's attractive.
  • When I move back, are there any additional expenses for being an out of state investor (taxes, insurance, etc...)?

I'm really ready to do this but I haven't been able to pull the trigger yet. It's like I just need someone to tell me that I can do it and tell me where to start but I know it's not that easy. 

Any advice would be greatly appreciated. 

Thanks

Hi Matt, getting started with REI and taking a real step forward is one of the most challenging and rewarding things we do as investors. It's scary, exciting and mind boggling all at the same time! It's all about the people you surround yourself with. Make sure to work with a knowledgable team and make decisions after all the data and information has been presented and explained. All the best!

@Angela Yan you sure said it about PM being like a marriage!  We just ended our relationship.  I would like to give my view as an investor that used Panzera Realty.

In 2016 we decided to purchase more properties in Columbus we looked on Bigger pockets for recommendations. People had talked about Panzera and we looked into them. David was personable, and knowledgeable of the market then. We purchased a 12 unit thru his company and he managed them.

Things have changed though. As of last month we are no longer with them. While the management went fine for awhile, we always had the feeling that although we were the owners and should have final say in things, David ran his business his way and was not as responsive to our concerns. Three big issues finally made the decision to leave them easy.
  The first issue was turnovers. While the units looked nice after they were done, the turnovers took entirely too long. Painting, putting in new interior doors or locks, laying down allure flooring were what most of the units needed. Some needed new vanity's' and stoves but nothing too crazy.  That had been an ongoing issue which we communicated with Panzera about rectifying, to pretty much lip service, nothing material had changed. This past summer we had 3 units go vacant around the same time. The last unit was not even started for over 29 days. His response was he was trying to spread the income and expense. He did not talk to us about that, just did it on his own. We had the funds set aside and the units needed to be turned and tenant placement began. His estimation of market rents were great, but not getting people signing the leases. After demanding the leases lowered from his idea of $715 to ours of $675 tenants began looking at the units again and signed.   When we first bought the property rents were low due to the old owner not paying attention, David did raise them during his time from there though. It's cold comfort to us to have at market rents but not have people (during this time period) not in the units for over 80 days, 60 days and 50 days. You cannot make up the missed rents from that time with the increase in rents.
 Second main issue was a letter delivered to us from an exterminating vendor David had not paid. The letter stated they were taking legal action against us sine David had not paid them for work done at our property. We had no clue of this. I called the company and found out that 8 months prior they were out there to perform work.  They provided documents and I spoke with David about it. He said they did not perform the work and would not pay for work not performed. Once again he did not mention any of this to us, he took this action without any consultation with us, or thought of the ramifications on our property. The owner of the exterminating company said Panzera had done this with many of their properties. I asked David to provide any info and his response was" We have quite a bit of emails and notes that we are working on putting together. This will take a bit of time", but none were provided to us.
  We had made the decision to part ways with Panzera at that time and tried to close things out. 
Last problem was actually after we notified we were leaving. Panzera does in-house water meter reading and billing. We switched over to Guardian but a tenant had a question about the last water bill that Panzera provided. Since I do not see the bills I asked him 3 time and my wife asked him to provide the bill. He would not do so. No reason given, just no. I went to his office to get the bills and he would not provide them, not any readings. Again he would not give a reason. Just kept saying we are no longer a client, even though though we were at the time of the billing, reading and when we initially asked for the readings/bills.  We are still baffled as to why he would not do this.

I am not sure what has changed with Panzera but something surely has. In all, our experience  has left a bad taste in our mouths and would not recommend them. 

@Sean Dawson - We agree that PM relationships are like a marriage - with that being said - not all investors are made for each PM company. Sometimes PM companies work better with a certain type of investor, and vice versa. As a company, our mission and goal is to provide our investor clients with the best possible professional advice and guidance. Sometimes, conflicting ideas get in the way, making our ultimate goal - taking the work and worry off our investors - impossible.

As investors know, sometimes the world of investing can be a bumpy ride. Our goal is to lessen the burden and provide as much professional advice and guidance as investors will accept. 

This post has been removed.

@Sarah Wheeler , yes,  investing can be a bumpy ride.  But I wonder why you sent me a message a month ago asking "

Hi Sean!

I saw that I had a profile view from you. Can I answer any questions for you about Columbus investing or property management?

Please let me know.

Thank you!"

When I was already a client ( at that time) of your PM company.  You did not even know that we were current clients!  Like I said something had changed at Panzera and we've gone our separate way

@Trent Ecklar rates are low, but prices are higher to compensate.  As a side note, when I purchased my first duplex I had horrible credit.  Paid 12% interest, and that was in 2000!  Crazy thinking about it now.  But even then I made it work.  Ate a lot of Ramen, but made it work.

  • @Matt Smith , cheaper houses in less stellar spots sometimes require more hands on work.  We self manage some of our properties in the OSU and Bexley area.  Those place are mostly grad students (at least the spots we are in) and are not too much of a bother.  

I'd stay away from the Westside personally. True, prices are great there, but unless you really want to be hands and do it yourself, it would not, in my opinion, be worth it to have a PM manage a couple of SFH there.

  • yes, we've put that much down for rentals.  Except of course when we lived in a place then it wasn't as much.  
  • well,you've seen my review of our previous PM.  With your time here I think you should be able to make some connections with handymen, contractors etc.. and use them when you move back.  With all the software out there tenants can log on and pay, send work requests, etc.  Showing the property would be the problem, but even then, agents can do that for a fee.
  • Dont know about any additional expenses.  Talk to @Jason Bott about the insurance side.  Good guy

Good luck

Hi @Robert Ellis - to get back to and answer your question, it is always our recommendation for our investors to stay near good school district areas here in Columbus. We find that these areas in/near good school districts tend to have those "B" and "A" type properties with a good return. 

With the current listings on the market, that would be our recommendation, as well. Although, as you know, there are pockets of areas that have properties that may fit into the "B" type and bring a good return. We are always more than happy to look at and run an analysis on any property an investor is looking at. That way we can give the best advice based on each individual situation. 

I hope this helps!

@Sean Dawson  Compared to the rest of the country, Columbus Ohio is a bargain for everything the city has to offer. Columbus is a completely different city than it once was. The prices do seem high compared to the history of prices in Columbus. With all the demand for our city, I believe that even with a healthy correction property values in Columbus will stay stable. Time will tell. Mmmmm. Ramen.

@Matt Smith keep an eye on Sharon Heights, Columbus Ohio. There are some great SFH rental opportunities.

Originally posted by @Sean Dawson :

@Angela Yan you sure said it about PM being like a marriage!  We just ended our relationship.  I would like to give my view as an investor that used Panzera Realty.

In 2016 we decided to purchase more properties in Columbus we looked on Bigger pockets for recommendations. People had talked about Panzera and we looked into them. David was personable, and knowledgeable of the market then. We purchased a 12 unit thru his company and he managed them.

Things have changed though. As of last month we are no longer with them. While the management went fine for awhile, we always had the feeling that although we were the owners and should have final say in things, David ran his business his way and was not as responsive to our concerns. Three big issues finally made the decision to leave them easy.


 

The first issue was turnovers. While the units looked nice after they were done, the turnovers took entirely too long. Painting, putting in new interior doors or locks, laying down allure flooring were what most of the units needed. Some needed new vanity's' and stoves but nothing too crazy.

 That had been an ongoing issue which we communicated with Panzera about rectifying, to pretty much lip service, nothing material had changed. This past summer we had 3 units go vacant around the same time. The last unit was not even started for over 29 days. His response was he was trying to spread the income and expense. He did not talk to us about that, just did it on his own. We had the funds set aside and the units needed to be turned and tenant placement began. His estimation of market rents were great, but not getting people signing the leases. After demanding the leases lowered from his idea of $715 to ours of $675 tenants began looking at the units again and signed. 

 When we first bought the property rents were low due to the old owner not paying attention, David did raise them during his time from there though. It's cold comfort to us to have at market rents but not have people (during this time period) not in the units for over 80 days, 60 days and 50 days. You cannot make up the missed rents from that time with the increase in rents.


 Second main issue was a letter delivered to us from an exterminating vendor David had not paid. The letter stated they were taking legal action against us sine David had not paid them for work done at our property. We had no clue of this. I called the company and found out that 8 months prior they were out there to perform work.  They provided documents and I spoke with David about it. He said they did not perform the work and would not pay for work not performed. Once again he did not mention any of this to us, he took this action without any consultation with us, or thought of the ramifications on our property. The owner of the exterminating company said Panzera had done this with many of their properties. I asked David to provide any info and his response was" We have quite a bit of emails and notes that we are working on putting together. This will take a bit of time", but none were provided to us.


  We had made the decision to part ways with Panzera at that time and tried to close things out.  Last problem was actually after we notified we were leaving. Panzera does in-house water meter reading and billing. We switched over to Guardian but a tenant had a question about the last water bill that Panzera provided. Since I do not see the bills I asked him 3 time and my wife asked him to provide the bill. He would not do so. No reason given, just no. I went to his office to get the bills and he would not provide them, not any readings. Again he would not give a reason. Just kept saying we are no longer a client, even though though we were at the time of the billing, reading and when we initially asked for the readings/bills.  We are still baffled as to why he would not do this.

I am not sure what has changed with Panzera but something surely has. In all, our experience  has left a bad taste in our mouths and would not recommend them. 

 Are you still looking for other property manager referrals? 

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