New Member Looking to invest in a Multi-family

Nick BelskyBusiness Member

Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes

@Philip Anderson

Welcome to the community and be ready for a huge amount of information at your finger tips. Be sure to check out the free tools BP provides to help analyze deals you may have and also market insights. Great tools that get updated regularly.

I am on the lending side of things and would be happy to hop on a call with you anytime to discuss financial strategies and help answer any questions you may have about nearly any loan product available to help you on your journey, even if they are not products my capital partners offer.

We are all here to help you learn and grow. Feel free to ask anything, anytime.

Cheers!

[email protected]

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James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes

Quote from @Philip Anderson:

I am a beginner looking for any advice on buying my first multi-family unit. I would like to buy and hold for 5 years or so and possibly refi to buy another one in a couple years. I have about 450k and looking to get my feet wet and would love it for any advice on good markets to jump into. I live in California but do not want to invest here. I have been looking at Cleveland and Lubbock but other than that I am just trying to figure it all out. I need help on how to analyze specific localities. Are there any resources for researching demographics of a specific area that would help?

I guess I need help determining how to locate properties to be able to crunch the numbers. I have been looking on loopnet but it seems like that is not the best spot to find good deals. Any help on how to figure out a local CAP rates for a specific area would be helpful.

I would also like to ask if there are different questions I should be asking to understand different markets as a first time investor in a market where I do not live or are not familiar with.

I might be interested in a good recommendation for a partner as well. I am good at crunching numbers and also bring some capital to the table. I also have a LTR single family home with positive cash flow. I am just looking to getting my foot in the door with a multi-family so I have some experience.

Thanks in advance!

Welcome aboard Phil.

Samuel DioufBusiness Member

Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes

[email protected]614-662-1652

Hey Phil, welcome to BP!

I'd love to share a graded map of Cleveland which would help you gain a better understanding of the different areas and price points of each grade.

When investing OOS, especially in high cash-flow markets, its important to work with a solid team who understands the area.

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2 Reply

Savannah Holzer

Lender · Austin, TX · Member since 2023 · 233 posts · 96 votes

Hey Philip! Cleveland and Lubbock are great markets to consider! Joining real estate investment groups and attending meetups can also help you find potential partners with local expertise and help you get comfortable with cap rate analysis and other key metrics!

Patrick DruryBusiness Member

Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes

[email protected]614-412-4565

@Philip Anderson
The best deals are going to be off-market ones. Reach out to some agents on here that source off-market deals. In terms of areas in Cleveland, I would recommend being in areas on the West Side of Cleveland like West Blvd, Cudell, Old Brooklyn, Clark Fulton, Edgewater, Jefferson, and Brooklyn Centre. The reason is the rent-to-price ratio is good so you can cash flow, and most of the West side doesn’t have a Point of sale inspection which is really annoying.

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Min ZhangBusiness Member

Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes

[email protected]614-412-2912

My advice for beginners is to start with turnkey rental properties that generate steady cash flow. Cleveland is an excellent market for this, offering strong returns for cash flow investors. Personally, I've seen cash flow yields ranging from 10-18%, with plenty of potential for even more. Best of luck on your real estate journey, let me know how I can help!

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Account Closed

Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes

Hi, welcome Ohio is a great place to invest in real estate my clients would definitely agree. Please reach out if you have any questions. Best Wishes!

Sam McCormackBusiness Member

Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes

[email protected]859-443-4952

Quote from @Philip Anderson:

I am a beginner looking for any advice on buying my first multi-family unit. I would like to buy and hold for 5 years or so and possibly refi to buy another one in a couple years. I have about 450k and looking to get my feet wet and would love it for any advice on good markets to jump into. I live in California but do not want to invest here. I have been looking at Cleveland and Lubbock but other than that I am just trying to figure it all out. I need help on how to analyze specific localities. Are there any resources for researching demographics of a specific area that would help?

I guess I need help determining how to locate properties to be able to crunch the numbers. I have been looking on loopnet but it seems like that is not the best spot to find good deals. Any help on how to figure out a local CAP rates for a specific area would be helpful.

I would also like to ask if there are different questions I should be asking to understand different markets as a first time investor in a market where I do not live or are not familiar with.

I might be interested in a good recommendation for a partner as well. I am good at crunching numbers and also bring some capital to the table. I also have a LTR single family home with positive cash flow. I am just looking to getting my foot in the door with a multi-family so I have some experience.

Thanks in advance!

Like others have said, Ohio is a good market for cash flowing properties. Landlord friendly as well. While I am not educated on Cleveland or Columbus, I am in the southwest Ohio, aka Cincinnati. A cash flowing market I think you would like. Shoot a message if you want to talk some more about the Greater Cincinnati market!

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Max Wilhite

Member since 2024 · 225 posts · 86 votes

Welcome, Philip! It sounds like you have a solid foundation and clear goals for your first multi-family investment. The BiggerPockets community is a great place to connect with like-minded investors and find resources on market analysis and cap rates. Looking forward to seeing how your journey unfolds!

Jimmy LieuBusiness Member

Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes

[email protected]614-300-7535

Quote from @Philip Anderson:

I am a beginner looking for any advice on buying my first multi-family unit. I would like to buy and hold for 5 years or so and possibly refi to buy another one in a couple years. I have about 450k and looking to get my feet wet and would love it for any advice on good markets to jump into. I live in California but do not want to invest here. I have been looking at Cleveland and Lubbock but other than that I am just trying to figure it all out. I need help on how to analyze specific localities. Are there any resources for researching demographics of a specific area that would help?

I guess I need help determining how to locate properties to be able to crunch the numbers. I have been looking on loopnet but it seems like that is not the best spot to find good deals. Any help on how to figure out a local CAP rates for a specific area would be helpful.

I would also like to ask if there are different questions I should be asking to understand different markets as a first time investor in a market where I do not live or are not familiar with.

I might be interested in a good recommendation for a partner as well. I am good at crunching numbers and also bring some capital to the table. I also have a LTR single family home with positive cash flow. I am just looking to getting my foot in the door with a multi-family so I have some experience.

Thanks in advance!

Hi Philip, welcome to the BiggerPockets community! With $450k to work with, you're definitely in a good position to start building your portfolio. I personally recommend looking into the Columbus OH market - good population growth, lots of job opportunities in a good mix of industries, and strong rental demand. When considering other locations/markets, check demographic trends - things like population changes, household income, job growth, etc. That will give you a sense of where the demand is. You can find a lot of that info in city/county websites and real estate data providers. In terms of finding good deals, you can connect with other local investors and realtors who can give you the scoop on pocket listings, off market deals, typical cap rates, and comps. Just take your time and make sure the numbers make sense for your goals. Happy to connect and answer any questions you may have.

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Robert Bleisch

Investor · Lubbock, TX · Member since 2015 · 36 posts · 5 votes

Phillip, I’m a buy and hold investor in Lubbock, Tx. I own a stabilized, class C portfolio of 200 or so single family rentals here that I self manage. My business partner is getting a divorce and rather than split things up we have decided to liquidate soon. For quick sale we are prepared to sell at the 1% rule of current rents and will consider owner financing with 20% down (30 year @ 7% w/ a balloon between 3-7 yrs). Rents are low (10%-25% below market depending on the property so there is value add). Text me if you’d like more info: 619 995-3361.

Corby GoadeBusiness Member

Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes

Lots of things to consider here; generally speaking, the higher the ROI, they less desirable the properties are. Many new investors get excited by high cash on cash returns in the midwest and buy rough properties in D areas and they get smoked by property managers, tenants, vacancy, capital expenses, repairs, turnover costs, etc.

Your best bet is to invest in growing areas that are landlord friendly and where you can either connect with or build a good team yourself- realtor, property managment, contractors, etc.

I invest in Idaho and have had good luck there- probably the most landlord friendly state there is.

Best of luck!

2 Reply

Scott Scialabba

Member since 2021 · 16 posts · 5 votes

Quote from @Corby Goade:

Lots of things to consider here; generally speaking, the higher the ROI, they less desirable the properties are. Many new investors get excited by high cash on cash returns in the midwest and buy rough properties in D areas and they get smoked by property managers, tenants, vacancy, capital expenses, repairs, turnover costs, etc.

Your best bet is to invest in growing areas that are landlord friendly and where you can either connect with or build a good team yourself- realtor, property managment, contractors, etc.

I invest in Idaho and have had good luck there- probably the most landlord friendly state there is.

Best of luck!

Can you elaborate on the "Landlord Friendly" classification? I'm thinking of horror stories I've heard in Portland Oregon.

Breeya JohnsonPro Member

Real Estate Consultant · Austin, TX · Member since 2021 · 36 posts · 21 votes

Congratulations on taking this big step toward multi-family investing! Your goal of buying, holding, and potentially refinancing in a few years is a great approach, especially if you're already running numbers and considering market analysis. Here are a few tips that might help as you get started:

Market Analysis: Since you're open to out-of-state investing, look for markets with steady population growth, job diversity, and a balance between rent prices and local wages—those factors often hint at stability and demand. Cleveland and Lubbock are both good options to explore, but also consider areas with strong job sectors, like Indianapolis or parts of the Southeast.

Researching Demographics: Tools like Placer.ai, Costar, and Data USA offer insights on demographics, migration trends, income, and market growth. Zillow Research and Redfin Data Center are also good resources to check property trends.

Finding Deals: LoopNet can be a bit challenging for finding "undiscovered" deals, as most listings there are already on the market. Consider building relationships with local brokers who specialize in multi-family units and may have off-market opportunities. Also, platforms like Crexi and MLS can sometimes yield better results.

Questions to Ask in New Markets: Focus on questions around local vacancy rates, job market stability, average tenant stay duration, and the area’s development plans. Understanding these factors will give you a sense of how well your investment could perform long-term.

I hope these suggestions help, and good luck as you get into multi-family! Feel free to reach out if you’d like to connect with others who have experience in the markets you're interested in.

Corby GoadeBusiness Member

Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes

Quote from @Scott Scialabba:

Quote from @Corby Goade:

Lots of things to consider here; generally speaking, the higher the ROI, they less desirable the properties are. Many new investors get excited by high cash on cash returns in the midwest and buy rough properties in D areas and they get smoked by property managers, tenants, vacancy, capital expenses, repairs, turnover costs, etc.

Your best bet is to invest in growing areas that are landlord friendly and where you can either connect with or build a good team yourself- realtor, property managment, contractors, etc.

I invest in Idaho and have had good luck there- probably the most landlord friendly state there is.

Best of luck!

Can you elaborate on the "Landlord Friendly" classification? I'm thinking of horror stories I've heard in Portland Oregon.

Sure- Idaho has state laws outlawing rent controls. It's also illegal for cities to attempt to regulate fees related to screening or applications. It's illegal for HOAs to regulate property use in any way- they can't tell you that you can't have an LTR or STR.

In the last 10 years we've signed 1500 leases and only had two evictions- those two evictions took between 4-6 weeks from start to finish.

It's honestly the best state to landlord in. Happy to elaborate or make connections for you if you like.

Philip Anderson

OP

Member since 2024 · 11 posts · 21 votes

Quote from @Breeya Johnson:

Congratulations on taking this big step toward multi-family investing! Your goal of buying, holding, and potentially refinancing in a few years is a great approach, especially if you're already running numbers and considering market analysis. Here are a few tips that might help as you get started:

Market Analysis: Since you're open to out-of-state investing, look for markets with steady population growth, job diversity, and a balance between rent prices and local wages—those factors often hint at stability and demand. Cleveland and Lubbock are both good options to explore, but also consider areas with strong job sectors, like Indianapolis or parts of the Southeast.

Researching Demographics: Tools like Placer.ai, Costar, and Data USA offer insights on demographics, migration trends, income, and market growth. Zillow Research and Redfin Data Center are also good resources to check property trends.

Finding Deals: LoopNet can be a bit challenging for finding "undiscovered" deals, as most listings there are already on the market. Consider building relationships with local brokers who specialize in multi-family units and may have off-market opportunities. Also, platforms like Crexi and MLS can sometimes yield better results.

Questions to Ask in New Markets: Focus on questions around local vacancy rates, job market stability, average tenant stay duration, and the area’s development plans. Understanding these factors will give you a sense of how well your investment could perform long-term.

I hope these suggestions help, and good luck as you get into multi-family! Feel free to reach out if you’d like to connect with others who have experience in the markets you're interested in.

Those are great tips! Thank you Breeya for offering yoiur insight. I appreciate your input in my continued efforts to gain more knowledge on investing in rental properties.

Gladimir Lobo

Real Estate Broker · Cleveland, OH · Member since 2023 · 242 posts · 85 votes

Phil, welcome to BP!

Don SpaffordPro Member

Investor · Idaho Falls, ID · Member since 2016 · 935 posts · 629 votes

Are you referring to small MF, or are you interested in a syndication into large MF apartments? Most syndications are held for about 5 years and some include a refi around year 3. So those could meet your needs without you having to do any of the management or additional expenses for repairs. There are also more than just the standard value-add multifamily available for syndications, you also have build to rent (new construction MF), RV Resorts and campgrounds, business m&a funds, storage, and much more! You can even do private lending and get great returns. Something for everyone depending on your goals and needs.

I love talking about RE investing. Happy to help any way I can.