Lender · San Francisco, CA · Member since 2015 · 22 posts · 10 votes
Hello friends -
My partner and I have been looking at properties in the greater Cincinnati area for a few months and have found a couple we're interested in. We live in San Francisco, CA and have been on the backend of real estate investing for over 2 years at a high volume lender and we're ready to put some money in the market. However, SF and the surrounding areas are cost-prohibitive (we have $45,000 for the investment). Several of my borrowers are working in the Cincinnati area and we've been working with a local acquisition agency (Build Realty) to find properties. My concern is with it being August and the cold months right around the corner, how much does the changing of seasons impact the ability to reliably get a project done on time? Us Californians don't have to deal with these things :)
There's a property (not under contract yet) that we could close by EOM, but that would put us at a resale of March. All insights are appreciated!
Seasonality does exist in Cincinnati, but it's not as bad as you'd think. While there are fewer buyers and sellers, the buyers who are looking in the winter months are more serious buyers. Statistically, a higher percentage of homes listed in the winter months here sell vs. those listed in the summer months.
Disclosure: I'm a competitor of Build Realty and currently we have lawsuits pending against each other.
Head over to courtclerk.org and do a search for Build Realty, the owner, Greenleaf Funding, etc.
Seasonality does exist in Cincinnati, but it's not as bad as you'd think. While there are fewer buyers and sellers, the buyers who are looking in the winter months are more serious buyers. Statistically, a higher percentage of homes listed in the winter months here sell vs. those listed in the summer months.
Disclosure: I'm a competitor of Build Realty and currently we have lawsuits pending against each other.
Head over to courtclerk.org and do a search for Build Realty, the owner, Greenleaf Funding, etc.
For the houses that sell in the winter, what is the typical SP % LP compared to the summer months? Also, I'm having a hard time without access to the MLS to find the local comps that have the below grade, above grade bed and bath count. Are there any local tools that you recommend I use for this?
@Account Closed we always include 4-5 sales comps for each property that we try to sell to an investor. I'm a licensed agent, so they're generate from the local MLS. There are instances, though, where even the square footage on the MLS is wrong compared to the county auditor website.
It sounds like you're trying to buy a house from my competitor. I'd suggest asking them to provide all sales in a 1/2 mile radius for the last 12 months vs. just the ones they're using to justify they're opinion of ARV. WIth $45,000 to invest, you're probably using their HML, so they have plenty of financial incentive to run those extra comps (the 4.9% origination fee they charge and the 3% spread they make on your interest payments, PLUS the markup on the property they're selling you)
If you are talking about resale of a flipped property as @Sean Cole mentioned we do have a lower number of buyers and listings in the fall and winter months. However, it varies on area and the typical buyer you will find for the product. Meaning, a house with 3-5 bedrooms in a great school district will most likely have a buyer that has children, usually of school age. These types of homes are harder to sell during the school year, because so few people want to move and uproot their children during the school year, unless they must. However, I have personally found my clients who buy in the fall/winter are very motivated, and though there are less total listings, there is less competition with other buyers, so all in all it seems to be a wash.
With the way the market has been the past two years in Cincinnati, everything in a decent location, priced correctly sells fast. Inventory is still at record lows, and prices are still rising in most neighborhoods. As for LP/SP%, most of my sales, and buys have been close to LP unless the agent has grossly over priced the listing, or there is a major defect that is found. Unfortunately, with the crazy low inventory, most buyers are paying at or above list price on retail homes.