New to real estate and BP from Ohio
Canal Winchester, OH · Member since 2015 · 8 posts · 2 votes
New to real estate and BP from Ohio
7 Replies
- Investor · Las Vegas and Tulsa · Member since 2014 · 123 posts · 200 votes11y
Hi Treven,
Thank you for your service and welcome to BP!
First of all, have you set your goals for your real estate investing? If not, that's the first place to start. Once you have your goals, you can better focus on your education phase. Try to learn as much as possible about the direction that will take you toward your goal. As part of the education phase, you should start looking at properties in your target area. Look at properties within and slightly outside what you can afford.
Read the offering packages and analyze the numbers carefully. After a while you'll get the hang of it. IMPORTANT: Don't get so lost in the education and analysis that you never get around to making any offers. You won't know everything before buying and you'd better plan on making a few mistakes, it's inevitable.
When looking at multifamily properties, figure out what you are comfortable with. Class A, B or C? Can you do some rehab? Can you manage a rehab crew? Do you feel comfortable knowing what standard is expected in your market? I operate in two very different markets (San Diego and Memphis) and I can tell you that the standards and expectations are very different...
I try to make the units just a little nicer than my competition. New countertops, glass top stoves etc. Stuff that doesn't cost a fortune, but it makes the units easier to rent, cheaper to maintain and keeps the tenant around longer.
I could go on for a while... Feel free to hit me up if you have any specific questions.
Now, get on Loopnet.com and see what's on the market in Columbus. There's a fourplex for only $90K on the market...
Happy hunting
Erik
- Canal Winchester, OH · Member since 2015 · 8 posts · 2 votes11y
Thank you @Erik Nowacki, i have been on loopnet and some other sites trying to compare, duplex and the occasional 4plex if i can decide to jump into that for 130k and below really is what im looking for right now. As far as class goes im not sure how they are divided and what A,B, and C mean actually or how they are classified as each, but i can do a little fix and repair, nothing major to start out with but i have no problem putting in required maintenance and work as long as the repairs are worth it. Right now as i said earlier, ive just been looking at areas and average costs and rents in the areas.
when i actually get back to ohio i can drive around and look at these places hopefully and see what the pictures dont show and the surrounding areas.
- Investor · Las Vegas and Tulsa · Member since 2014 · 123 posts · 200 votes11y
Don't be afraid of fourplexes. In fact, the more tenants you have, the smoother the income stream. If you have a single unit and lose your tenant, 100% of your cash flow is gone. With a fourplex, it's only 25%. Also, with more units, you get more rents, which helps you carry a larger mortgage. So, focus on finding units with a good rent to purchase price ratio.
Class A is generally new or completely renovated units in an attractive location (downtown, the beach etc.). Class B can be older, but are generally fairly nice apartments, just a step down from Class A. Class C is the rougher part of town, older construction etc. Some even mention Class D - the warzone. Usually, Class D cashflows the best, but also has the most management headaches. Class A barely cashflows, even with a 50% downpayment, but your building is new so you don't have any maintenance problems and your tenants are great. You have to find your niche. I'm comfortable with a Class C rehab, but it's not everyone's cup of tea.
At your price range, I believe you are looking for a Class C, maybe even a Class C rehab. I strongly recommend that you get very familiar with the concept of cap rates. This will make it easier to calculate if the work you are thinking of doing is worth while. I.e. if I spend $4K on a rehab and can raise the rent on the rehabbed unit by $100/mo, how will that affect the value of the entire property.
Erik
- Canal Winchester, OH · Member since 2015 · 8 posts · 2 votes11y
Ok, i will definitely look into this much more. I appreciate all the help and information, i need to read some books and follow more threads here ! haha
- 11yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Originally posted by @Treven Jennice:
Hello everyone,
My name is Treven and i am new to REI and BP, trying to get my feet wet and my foot in the door as i start on this new adventure. I am currently in the military in San Diego, but in the next couple months i will be getting out and heading back to Columbus, Ohio and would like to find a multifamily place to invest in. Looking forward to reading more on this site and getting to know you all, Thanks for the help in advance!
Welcome Treven,
Ohio is the place to be mate :)
Commit to the numbers daily and I am sure you will see many doors open.
Thanks and see you around the forum.
- Investor · Memphis, TN · Member since 2015 · 54 posts · 13 votes11y
Thanks for your service. Welcome to BP. Great place to get a good education in Real Estate Investing. A common theme is do not over analyze and never commit. We took to long to analyze our first deals and had a few sold out from under us. You need to analyze to feel good about the deal but get an offer in. If you have to put a 10 day inspection period on it with an out like "upon approval from partners". This will give you a go out and give you time to have a contractor or two to look at it with you.
Study up on Brandon Turners podcast and blogs about "House Hacking" this might be a great foot in the door for you.
- Real Estate Agent · Cincinnati, OH · Member since 2014 · 86 posts · 14 votes11y
Welcome to BiggerPockets! This is a great site to learn from and network with people.
Check out the Start Here page.
Then read the BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing and can help you figure out which niches you are more interested in.
Also check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice.
Don't forget to set up your keyword alerts.
I'm in the Cincy area, but let me know if I can help at all or just discuss different aspects of real estate.
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