guidance investing in Ohio

20 Replies

Hi,

I'm an out of state investor and would like to connect with active investors in Ohio. I've done some brief research and it seems like areas such as Akron, Youngstown, Dayton, Toledo and Cleveland have good city-average cap rates. Open to any advice or contacts you guys could offer to help me get started.

Also, any advice on what I need to be aware of? Or areas I should stay away from?

Thanks


Updated about 1 month ago

Updating my post to be specific on what I am looking for: I'm currently looking to purchase buy and hold properties long-term for cash flow. I'm looking for a duplex in the 60k to 80k range in a Class B or C neighborhood. My goal is to buy them with conventional financing. Ideally I would want them already tenant occupied with minor cosmetic updates needed. I know that may be alot but wanted to see if that criteria would be achievable here.

You're casting a very wide net right now. Every market has its pros and cons. You can literally rent a house or apartment in any market which means that some investor figured out how to make money there. I'm in Zanesville, OH. Very rural market and you can get some good cash flow on cheap houses, but you're not going to get rich on appreciation anytime soon. You need to get specific on your criteria and what your goals with REI are and then you can really hone down on a market. Ohio has already piqued your interest, I'm sure one of those cities that you mentioned is more appealing to you than the others. Just research that one market and find your niche within it. It's counter intuitive but the more specific your focus is, the more likely you will find what you are looking for. There are thousands of people on BP that LOVE Ohio and an open ended request for advice or contacts could quickly overwhelm you.

@Rubin Thomas

I’d recommend to look at Columbus also for its more stable appreciation and still solid cap rates. All of those markets you listed above have declining populations also which is important to factor in.

I would start with defining my investment criteria and then talking with a few folks in the several markets you're interested in.  If you are new to real estate investment, I would start with a more conservative approach where there are fewer things that can go wrong.  Unfortunately bad vendors and unforeseen events are a common occurence in this industry.  Hopefully you have reserves that will allow you to overcome the occasional hiccups that will inevitably arise.  Talk with a few investors in the local market to see what their takes are.  Let me know if I can help in any way.

Originally posted by @Rubin Thomas :

Hi,

I'm an out of state investor and would like to connect with active investors in Ohio. I've done some brief research and it seems like areas such as Akron, Youngstown, Dayton, Toledo and Cleveland have good city-average cap rates. Open to any advice or contacts you guys could offer to help me get started.

Also, any advice on what I need to be aware of? Or areas I should stay away from?

Thanks

I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

https://www.biggerpockets.com/blog/core-four-real-estate-team


I did that here in Columbus, Ohio.

That's a pretty broad question. I would settle on what city you want to invest in first, the like Remington said find your "boots on the ground" and go from there. I'm here in Toledo, let me know if you want to talk about the pros/cons of investing around here. 

Originally posted by @Clinton M.:

You're casting a very wide net right now. Every market has its pros and cons. You can literally rent a house or apartment in any market which means that some investor figured out how to make money there. I'm in Zanesville, OH. Very rural market and you can get some good cash flow on cheap houses, but you're not going to get rich on appreciation anytime soon. You need to get specific on your criteria and what your goals with REI are and then you can really hone down on a market. Ohio has already piqued your interest, I'm sure one of those cities that you mentioned is more appealing to you than the others. Just research that one market and find your niche within it. It's counter intuitive but the more specific your focus is, the more likely you will find what you are looking for. There are thousands of people on BP that LOVE Ohio and an open ended request for advice or contacts could quickly overwhelm you.

your right Clinton, I'll update my post to be more specific and also include it here, let me know if I'm missing something

I'm currently looking to purchase buy and hold properties long-term for cash flow. I'm looking for a duplex in the 60k to 80k range in a Class B or C neighborhood. My goal is to buy them with conventional financing. Ideally I would want them already tenant occupied with minor cosmetic updates needed.

I know that may be alot but wanted to see if that criteria would be achievable here.

 

@Rubin Thomas hello from another out of state investor! We have been working with many of the BP investors in Ohio, most are in here answering you.  I know the criteria you put up fits well with some of what we have been seeing in Toledo.  I think @Dave Poeppelmeier will also agree that some of Maumee might fit that as it is a suburb of Toledo. We are networking with one of his co-workers @Mike Mocek . I hope we get to work with you soon, take care and good hunting to you!

If you can find a duplex that truly needs little work (just cosmetics) in Maumee for $60-$80k, please share your secret! 

You may be able to find something that meets that criteria in a Toledo C neighborhood. Be aware, though, that Toledo very much requires boots on the ground; within zip codes their is a lot of variation in value.

Yes, I would definitely call Maumee a suburb. That and I completely agree with @Christopher Abele , $60-80k will buy you a duplex in a C-class Toledo neighborhood, but it will likely need work and full property management if you're not local. But, it is possible and people love duplexes in Toledo for a reason: they cash flow very well.  

Originally posted by @Rubin Thomas :
Originally posted by @Clinton M.:

You're casting a very wide net right now. Every market has its pros and cons. You can literally rent a house or apartment in any market which means that some investor figured out how to make money there. I'm in Zanesville, OH. Very rural market and you can get some good cash flow on cheap houses, but you're not going to get rich on appreciation anytime soon. You need to get specific on your criteria and what your goals with REI are and then you can really hone down on a market. Ohio has already piqued your interest, I'm sure one of those cities that you mentioned is more appealing to you than the others. Just research that one market and find your niche within it. It's counter intuitive but the more specific your focus is, the more likely you will find what you are looking for. There are thousands of people on BP that LOVE Ohio and an open ended request for advice or contacts could quickly overwhelm you.

your right Clinton, I'll update my post to be more specific and also include it here, let me know if I'm missing something

I'm currently looking to purchase buy and hold properties long-term for cash flow. I'm looking for a duplex in the 60k to 80k range in a Class B or C neighborhood. My goal is to buy them with conventional financing. Ideally I would want them already tenant occupied with minor cosmetic updates needed.

I know that may be alot but wanted to see if that criteria would be achievable here.

 that’s certainly achievable in Toledo, I’m an out of state investor, this month i bought a duplex for 55k in a C+ area that needs 18k rehab, will rent for 1400. Also used LaPlante would recommend.

Originally posted by @Brandon Sturgill :

@Michael P. Define C+

I’m not the source of definitions, but to me it means neighborhoods with a lot of blue collar job tenants in early 19th century built housing stock. If you drive thru on google maps they look like respectable neighborhoods.

@Michael P. Markets define themselves...I was really just curious about the data...on a basic level we have boxes...lots of similar boxes...the value of those boxes is set by the market...meaning folks are willing to pay more for some boxes than others...because of location, condition, access to stuff, etc, etc. The only constant in real estate is the size and makeup of the boxes..for SFR, its sq.ft...for MF its a unit. If you plug in the closed sales in your market over the last 12-months, the market will define itself naturally...groupings will appear at recognizable intervals...so for MF we'd look at the value an individual is willing to pay per unit...so, A-class in my market is an avg. per unit sale price of $211k, B-class is $146k per unit, C-class is $95k per unit, and D-class is around $59k per unit. Your figures are likely not the same, but same concept. There is a lot more to this, but it's the foundation.

Hey Rubin, I am a Cleveland guy and i have to say that you do not need to spend 60-80k in a C class neighborhood. 

In my honest Opinion, I would buy something with an upside. Do not buy at top market. 

Would love to chat with ya in more detail if you have anything to look at in detail in the Cleveland Market. 

Good luck!

Originally posted by @Rubin Thomas :

Hi,

I'm an out of state investor and would like to connect with active investors in Ohio. I've done some brief research and it seems like areas such as Akron, Youngstown, Dayton, Toledo and Cleveland have good city-average cap rates. Open to any advice or contacts you guys could offer to help me get started.

Also, any advice on what I need to be aware of? Or areas I should stay away from?

Thanks

 In regards to Cleveland alone I'd imagine the resource that will help you the most with this question is The Ultimate Guide to Grading Cleveland Neighborhoods. From there you can do your own due diligence on what type of risk you'd like to take on for the price.

Originally posted by @Michael P. :
Originally posted by @Brandon Sturgill:

@Michael P. Define C+

I’m not the source of definitions, but to me it means neighborhoods with a lot of blue collar job tenants in early 19th century built housing stock. If you drive thru on google maps they look like respectable neighborhoods.

 

I would agree. This photo looks like a pretty typical C Grade area to me.