2013 Memphis, 2014 Atlanta, 2017 Indianapolis, 2018 Ohio ?

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2013 Memphis, 2014 Atlanta, 2017 Indianapolis, 2018 Ohio ?

Lane Kawaoka
Rental Property Investor 路 Honolulu, HAWAII (HI) 路 Member since 2011 路 4k+ posts 路 2k+ votes

I used to buy turnkey rentals and it seems like the trend in 2013 Memphis, 2014 Atlanta, 2017 Indianapolis, 2018 Ohio ? What do you think the next secondary market that all the out of state buyers go to next?

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Account Closed
Investor 路 Columbus, OH 路 Member since 2017 路 861 posts 路 1k+ votes
8y

All the Ohio turnkey operators:  Come here, your East Coast, California and Colorado money is safe in the midwest! Its all sunshine and roses! 

Me, the local Ohio RE investor that likes sane un-inflated markets: Go away! This is a snowy depressing midwestern hellscape of dirty, broke, unemployed tenants with 21 dogs and they cook greasy foods and touch all the walls and sit around all day smoking tweeds and trying to stuff q-tips in the drains! 

(Well not really, I wish success to all, but aaaah dont inflate my market!) 

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  • Tom Ott
    Equity Raiser and Turnkey Provider 路 Cleveland, OH 路 Member since 2016 路 4k+ posts 路 1k+ votes
    8y
    Originally posted by @Lane Kawaoka:

    I used to buy turnkey rentals and it seems like the trend in 2013 Memphis, 2014 Atlanta, 2017 Indianapolis, 2018 Ohio ? What do you think the next secondary market that all the out of state buyers go to next?

     With everything that I have been seeing in Cleveland and other markets in Ohio, I would vote for Ohio for 2018 as well!

    2Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @Lane Kawaoka

    I am making money in the Cleveland market. 

    @Tom Ott & @James Wise know this market inside and out. Both have always been very helpful to me and have always been gracious enough to answer my questions. Be careful in this market, I must warn you. I have lost my butt on a couple of investments. However, my big winner cash flows $575 per month and I am in it under $31,000. They all do not work out that way. Keep asking questions as you proceed. 

    3Reply
  • Jason Bajaj
    Kirkland, WA 路 Member since 2016 路 19 posts 路 7 votes
    8y
    Originally posted by @Kristopher Hanks:

    @Lane Kawaoka

    I am making money in the Cleveland market. 

    @Tom Ott & @James Wise know this market inside and out. Both have always been very helpful to me and have always been gracious enough to answer my questions. Be careful in this market, I must warn you. I have lost my butt on a couple of investments. However, my big winner cash flows $575 per month and I am in it under $31,000. They all do not work out that way. Keep asking questions as you proceed.

    Would love to hear more on the properties you lost your money on, what went wrong from the original plan? I feel like there's not enough of those stories shared to learn from 馃槙

    4Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @Jason Bajaj

    Truthfully, most if not all people hate to acknowledge and / or discuss their failures. Everyone has a little bit of ego if not a giant ego. But alas, I must confess I did not listen to certain key pieces of advice from the many experienced people that came before me. But I learn by doing not reading, so that is my Achilles Heal. If you step back and see the big picture a lot of us here are not just trying to invest we are also trying to build businesses. Glaringly pointing out your business failures is not exactly the kind of P.R. that you normally want. But, the point of this website and community is to help others learn. 

    So, here is what I will do in an effort to help. 

    This is what I will do and have been working on doing. I am in the process of building my business page here on BiggerPockets. You will see the Deals section in my profile. I have put up details on my big winner (so far) :) including pictures of the property. 

    I will work on putting together details of the two big failures I had and exactly why they failed. It was a huge joint effort to cause what should have been great money makers into total disasters. But in the end I only have myself to blame.  

    I do not have a set completion date for this so you will just have to keep checking in to read about them when I complete the project. 

    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    8y
    Originally posted by @Kristopher Hanks:

    @Jason Bajaj

    Truthfully, most if not all people hate to acknowledge and / or discuss their failures. Everyone has a little bit of ego if not a giant ego. But alas, I must confess I did not listen to certain key pieces of advice from the many experienced people that came before me. But I learn by doing not reading, so that is my Achilles Heal. If you step back and see the big picture a lot of us here are not just trying to invest we are also trying to build businesses. Glaringly pointing out your business failures is not exactly the kind of P.R. that you normally want. But, the point of this website and community is to help others learn. 

    So, here is what I will do in an effort to help. 

    This is what I will do and have been working on doing. I am in the process of building my business page here on BiggerPockets. You will see the Deals section in my profile. I have put up details on my big winner (so far) :) including pictures of the property. 

    I will work on putting together details of the two big failures I had and exactly why they failed. It was a huge joint effort to cause what should have been great money makers into total disasters. But in the end I only have myself to blame.  

    I do not have a set completion date for this so you will just have to keep checking in to read about them when I complete the project. 

     when you say failure in what context.. they did not cash flow as thought.. or you actually lost ALL your money or just took a little hair cut.. there are all sorts of levels of disaster from what i see people post about.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @Jay Hinrichs

    Paid too much for the houses to begin with. Did not do enough research on the surrounding neighborhoods and bought in high crime areas. Inherited tenant in one of the homes refused to pay rent and a lengthy eviction process killed any possible cash flow for a few months. I had a CMHA Section 8 tenant placed in a recently remodeled house by the seller. What I failed to look into was when she was due for a financial review to determine her level of assistance. Two months into 12 month contract with CMHA they decided that she could afford to pay $687 per month for her portion of the rent when she was paying only $97 and had a gross income of about $15,000 per year and three young boys she had to take care of. Needless to say she could not stay in the home and destroyed the newly refurbished wood floors. She failed to respond to the notice of review from CMHA to file an appeal to fight the rent increase so the decision could not be overturned. 

    I could go on and on. Short version: I paid too much, bought in the wrong areas chasing ridiculous ROI %, did not hire an experienced, professional property manager, which also cost me financially, ultimately had to unload the houses losing about half of my initial investment + holding costs and some repairs and maintenance.

    6Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    8y

    @Kristopher Hanks  excellent post you right there destroyed a lot of myths and things that are marketed in the US rental arena.

    1.  section 8 or a form of it is guaranteed money.. ITS not and you experienced why.  I have had them kicked off completely becasue they totally lied on application.

    2. HIGH ROI on paper generally speaking for anyone who does not live in the market = high risk that is true in all major MSA this is why the folks that are buying Morris invest homes will see a rocky road in the future its the area .. forget about whether the house was actually rehabbed or not. ( as some have complained about.

    Most go through this learning curve.. thats why I like where Chris Clothier has taken his company higher end assets that have dual exits.. and he is not out there touting 12 to 15% returns. his numbers are realistic and if you want to own rentals own solid ones.

    But don't beat yourself up you did not know what you did not know.. 

    there is a place for section 8 housing and a bullet proof PM is critical.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @Jay Hinrichs

    It's hard to admit but I committed several of the newbie real estate investor deadly sins. The ones that I read over and over again, that were preached by many, such as yourself. But as admitted before my ego was sure that I could conquer these challenges. And I saw them as just that, challenges. I have never been afraid of risk. But I also learn from mistakes and failures, and I never give up. 

    The hardest thing for me to accept is the set-back, financially. This is going to slow me down. Frustrating!

    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    8y
    Originally posted by @Kristopher Hanks:

    @Jay Hinrichs

    It's hard to admit but I committed several of the newbie real estate investor deadly sins. The ones that I read over and over again, that were preached by many, such as yourself. But as admitted before my ego was sure that I could conquer these challenges. And I saw them as just that, challenges. I have never been afraid of risk. But I also learn from mistakes and failures, and I never give up. 

    The hardest thing for me to accept is the set-back, financially. This is going to slow me down. Frustrating!

    takes a big man to admit this I admire you for it..  I lost millions in these asset class's in the 08 meltdown..  

    along with much smarter folks than me.. its amazing if you lower your target return your risk factor goes down incredibly. or you need to live there and get the deals before ANYONE gets them and do the BRRR strategy that will work as well.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @Jay Hinrichs

    I thank you for your kind words and continued advice. 

    0Reply
  • Account Closed
    Investor 路 Columbus, OH 路 Member since 2017 路 861 posts 路 1k+ votes
    8y

    All the Ohio turnkey operators:  Come here, your East Coast, California and Colorado money is safe in the midwest! Its all sunshine and roses! 

    Me, the local Ohio RE investor that likes sane un-inflated markets: Go away! This is a snowy depressing midwestern hellscape of dirty, broke, unemployed tenants with 21 dogs and they cook greasy foods and touch all the walls and sit around all day smoking tweeds and trying to stuff q-tips in the drains! 

    (Well not really, I wish success to all, but aaaah dont inflate my market!) 

    7Reply
  • Mike D'ArrigoPro Member
    Turn key provider 路 San Jose, CA 路 Member since 2010 路 4k+ posts 路 3k+ votes
    8y

    I still like Indianapolis and Kansas City for cash flow but for new, secondary markets, I'm going to go against the tide on this and say Grand Rapids, MI. Is that on anyone else's radar?

    1Reply
  • Larry Fried
    Investor/RE Broker 路 Eugene, OR 路 Member since 2014 路 3k+ posts 路 968 votes
    8y

    I am liking Ohio for 2018 as well, but particularly the smaller city of Dayton!

    1Reply
  • Brandon Simas
    Stockton, CA 路 Member since 2018 路 6 posts 路 0 votes
    8y
    @Mike D'Arrigo Hello Mr. D'Arrigo. My friend and I have been looking at properties in Detroit as turnkey investments. I'd love to get some feedback from you on that as a market. This will be our first foray into real estate investing and although we've both been doing our due diligence it's still a bit daunting, especially since we will be investing in s market we do not live in. Would love to hear your thoughts and also opportunities.
    0Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 31k+ posts 路 20k+ votes
    8y
    Originally posted by @Kristopher Hanks:

    @Jay Hinrichs

    It's hard to admit but I committed several of the newbie real estate investor deadly sins. The ones that I read over and over again, that were preached by many, such as yourself. But as admitted before my ego was sure that I could conquer these challenges. And I saw them as just that, challenges. I have never been afraid of risk. But I also learn from mistakes and failures, and I never give up. 

    The hardest thing for me to accept is the set-back, financially. This is going to slow me down. Frustrating!

     Keep your head up Kristopher, we've all done deals where we lost some money, myself included. All of the set backs I've taken in this business have made me better.

    What you gained was some irreplaceable real world experience. No matter how many times something is written in a text book or told to you by another NOTHING compares to actually doing it yourself. You are gonna come out of this a better & more prudent financial investor. 

    2Reply
  • Jim Jopling
    Real Estate Investor 路 El Paso, TX 路 Member since 2017 路 47 posts 路 23 votes
    8y

    As a newbie I鈥檓 interested to know how you analyze markets and where do you get your data? Where can I find info for population growth - actual and projected? Job growth (same). Crime rates by neighborhood? School district ratings? Inventory of SFRs? Price history and projected prices of inventory?

    Any tips you folks have for which metrics to look at and how to find them is much appreciated. 

    1Reply
  • Kristopher HanksPro Member
    Rental Property Investor 路 Davenport, FL 路 Member since 2016 路 593 posts 路 382 votes
    8y

    @James Wise

    That鈥檚 what I鈥檓 hoping for. No doubt they were very valuable lessons. 

    @Jim Jopling

    I will leave it to the pros to answer your questions. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    8y
    Originally posted by @Jim Jopling:

    As a newbie I鈥檓 interested to know how you analyze markets and where do you get your data? Where can I find info for population growth - actual and projected? Job growth (same). Crime rates by neighborhood? School district ratings? Inventory of SFRs? Price history and projected prices of inventory?

    Any tips you folks have for which metrics to look at and how to find them is much appreciated. 

    most cities chamber of commerce will have most of this.

    google will have it.

    and a good realtor in a market will have stats from MLS they can share.

    its all on line and very easy to find in a few clicks.. let me tell you if i can do it YOU CAN TO  thats a given.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Yannick Dos Santos
    Accountant 路 Melbourne, Victoria 路 Member since 2017 路 10 posts 路 11 votes
    8y

    Hi there BP community!!

    to @Lane Kawaoka, I am not the right person to guarantee 100% the trend for turnkey investments in different areas. As you can see, I am an investor from Australia, nearly closing on my second property in Ohio by May if everything goes as planned. My first property I bought it in September 2017 also there in Ohio and from what I can tell, it is really going well with the results talking about financials. The turnkey company I work with and my team is exceptional, the property manager and the tenants have been really good so far, communications have been very helpful and ROI is around 11%.

    I did not go for high valued properties neither for very low cost, I purchased it around 65K included basic rehab and everything fixed ready for the tenants. I am not sure if the market trend this year 2018 goes to Ohio but I am ready to jump on my second property in this market as soon as I find a good deal with my turnkey company. What I have to be careful, it is not to put everything in one market, hopefully after this one, I will like to diversify in another market of course and plant more seeds.

    to @Kristopher Hanks, you are a very good example of a truly and honest person/investor for a lot of people in this community, I must say that when you admit your failures and mistakes, it will make you a better and experienced human being. I was so nervous when I first invested in real estate in Ohio, because I (among many others) do obviously live far away from the country and never ever have seen Ohio with my own eyes (but I am planning to travel there very soon), so knowing the real estate opportunity in this market that sometimes is TOO GOOD TO BE TRUE and also from my experience tells me that something good comes with high risks, so, what I did firstly was my research in the area and build up my team of real estate brokers and property managers and plenty of advise from this website Biggerpockets and off I went to find a good turnkey operator, hiring them would cost a bit of money and its better to have some professionals with a reputation than do it yourself try to save a few bucks. But, my friend, never give up is my advise, what you doing is exceptional, just what I am going through with this financial shakes around the world, never give up, because the last thing to lose is Hope!

    5Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 31k+ posts 路 20k+ votes
    8y
    Originally posted by @Jim Jopling:

    As a newbie I鈥檓 interested to know how you analyze markets and where do you get your data? Where can I find info for population growth - actual and projected? Job growth (same). Crime rates by neighborhood? School district ratings? Inventory of SFRs? Price history and projected prices of inventory?

    Any tips you folks have for which metrics to look at and how to find them is much appreciated. 

     http://www.city-data.com/ is a good place to start.

    2Reply
  • Sean Tarpenning
    Turnkey Investment Provider 路 Kansas City, MO 路 Member since 2015 路 1k+ posts 路 116 votes
    8y
    Good suggestions Larry Fried ! We started in Dayton OH at the end of 2016. The tenant demand is the highest I have ever seen in a city. The military base, hospitals, and University are strong staples in the community. Over the past year, there鈥檚 been more new construction and renovation in the downtown area. Many millennials are moving back into the city, just as I saw in KC about 5-6 years ago. We鈥檝e expanded to Cincinnati as well. We can find great deals for our investors and a lot more cash flowing multi families!
    1Reply
  • Lane Kawaoka
    OP
    Rental Property Investor 路 Honolulu, HAWAII (HI) 路 Member since 2011 路 4k+ posts 路 2k+ votes
    8y

    @Jason Bajaj  that's great but when you get over 10 units Let me know how you are feeling with the measly 2000-3000 a month.

    0Reply
  • Robert EllisBusiness Member
    Developer 路 Miami, FL 路 Member since 2014 路 3k+ posts 路 1k+ votes
    8y
    Originally posted by @Lane Kawaoka:

    I used to buy turnkey rentals and it seems like the trend in 2013 Memphis, 2014 Atlanta, 2017 Indianapolis, 2018 Ohio ? What do you think the next secondary market that all the out of state buyers go to next?

     Hi Lane, we've seen a lot of our investors move towards cincinnati. We are in columbus but do larger complexes around the state of ohio, i'll send you a PM. 

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Blake Brose
    Realtor 路 Kansas City, MO 路 Member since 2014 路 148 posts 路 40 votes
    8y

    @Lane Kawaoka Kansas City is still a great cash flow market!

    0Reply
  • Lindsay Stewart
    Investor 路 Melbourne, Victoria 路 Member since 2015 路 203 posts 路 58 votes
    8y
    Originally posted by @Yannick Dos Santos:

    Hi there BP community!!

    to @Lane Kawaoka, I am not the right person to guarantee 100% the trend for turnkey investments in different areas. As you can see, I am an investor from Australia, nearly closing on my second property in Ohio by May if everything goes as planned. My first property I bought it in September 2017 also there in Ohio and from what I can tell, it is really going well with the results talking about financials. The turnkey company I work with and my team is exceptional, the property manager and the tenants have been really good so far, communications have been very helpful and ROI is around 11%.

    I did not go for high valued properties neither for very low cost, I purchased it around 65K included basic rehab and everything fixed ready for the tenants. I am not sure if the market trend this year 2018 goes to Ohio but I am ready to jump on my second property in this market as soon as I find a good deal with my turnkey company. What I have to be careful, it is not to put everything in one market, hopefully after this one, I will like to diversify in another market of course and plant more seeds.

    to @Kristopher Hanks, you are a very good example of a truly and honest person/investor for a lot of people in this community, I must say that when you admit your failures and mistakes, it will make you a better and experienced human being. I was so nervous when I first invested in real estate in Ohio, because I (among many others) do obviously live far away from the country and never ever have seen Ohio with my own eyes (but I am planning to travel there very soon), so knowing the real estate opportunity in this market that sometimes is TOO GOOD TO BE TRUE and also from my experience tells me that something good comes with high risks, so, what I did firstly was my research in the area and build up my team of real estate brokers and property managers and plenty of advise from this website Biggerpockets and off I went to find a good turnkey operator, hiring them would cost a bit of money and its better to have some professionals with a reputation than do it yourself try to save a few bucks. But, my friend, never give up is my advise, what you doing is exceptional, just what I am going through with this financial shakes around the world, never give up, because the last thing to lose is Hope!

     Hi Yannick

    Sounds great!  Well done to you.  Its not easy getting involved in the US market from overseas without support and it looks like you have done very well!  Good luck with your second.  Happy to be of any help if you need

    Cheers

    Lindsay

    0Reply
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