Northside - Did it just die?

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Northside - Did it just die?

Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes

Hello all,

The subject line may be a bit overdramatized...but maybe not? Just listed a finished rehab on Apjones last week. It’s not the greatest and nicest ever, but it’s solid and was decently priced. A bit on the higher end, but there were comps to support it. However, since listing it Thursday, we have gotten literally zero showing requests. Not even talking zero offers...I’m saying not even one request for a showing. And according to my agent, a lot of his colleagues are experiencing the same thing. Just take a look around active listings, and you see a whole lot more price reductions than Pendings.

So...to all the locals in Cincinnati (I’m out of state) - what the heck is happening? It’s not like all the reasons that made Northside one of the hottest revitalizing areas over the past year or so has all of a sudden gone away. If anything, from what I understand, there’s even more development taking place in that area as we speak. Can anyone provide some more local intel? My realtor says it’s not just a matter of mid August being traditionally slower (mine is 2br 1.5 ba so not a family demographic anyway), it’s unnaturally slow right now.

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Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes

8y

@Slocomb Reed not going to lie....being a proud westsider... and growing up in Westwood... it's good to see 25-35 year old friends moving into parts of Westwood. Westwood is the largest neighborhood in Cincinnati by a good margin.... so like you said... it gets written off as C-D class.... but there are tremendous pockets where people are renovating/fix ups.... as you said.... if someone dropped you on Epworth.... you wouldn't know you weren't in Hyde Park.

Westside Brewery has been busy the few times I've been there-- with foodtrucks.... never thought the westside would see foodtrucks... there's also a few other shops that have popped up.... Nation is opening up their 2nd location in the old firehouse..... lots of good movement..affordable, quiet pockets, not disconnected from downtown/highways like most of the westside.

Cheers

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Paul Sian
Real Estate Agent · Cincinnati, OH · Member since 2016 · 169 posts · 146 votes
8y
There are a number of different factors at play here. Interest rates make what once was a good price now look too high. Schools are getting back in session so that slows down things somewhat.
While I may have an east side bias, locally in my circles Northside was never really talked up. It is a neat place but the people I talk too are more interested in Westwood, Cheviot, and similar neighborhoods further west.
Those who wanted to buy have bought the rest probably were never looking seriously in the first place.
Usually after any frenzy of activity things do have to slow down to allow the system to catch up.
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Nathan Currier-Groh
Investor · Cincinnati, OH · Member since 2016 · 34 posts · 16 votes
8y
I was a little surprised at the volume of houses listed right now. Non-investor locals are having major price shock especially in Northside.
I think the bright blue is not working in your favor.
+/- $15000 and there are several options within a couple blocks that have more architectural appeal.
Apjones is a bit on the edge of the desirable business area for the non-family buyers.
The weather this week is going to be very nice... there should be a lot of people out looking.
1 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Nathan Currier-Groh
That’s good feedback. Re: blue - suffice it to say it didn’t end up the way I originally envisioned. Had seen it online on a different type of siding, with that exact color combo of white, blue, yellow door and looked much better. Gambled a bit on the color with it being a bit of an artsy area. I don’t have another couple grand right now to re-paint it. Like I said, I know it’s not the nicest rehab, but if you walk through it is a very open plan and fairly well done.
You and @Paul Sian share sentiments of the sticker shock aspect of Northside it seems. We will see what happens this week...just takes the one.
But also keep in mind, it’s not just my property and its blue that is not bringing people in. It’s an awful lot of the active listings that are experiencing the same thing. Check out how many price reductions have and are taking place every week. So like you said, maybe it’s just the sticker shock for the area as a whole.
3 Reply
Sean Cole
Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
8y
The market in Cincinnati is weird right now. There's still a handful of homes that get multiple offers and sell immediately and then there's a bunch of stuff that's sitting for no real reason. What we've found in my group is that price is king right now. You have to be priced under value and not over right now. Under value is still getting multiple offers and over list.
3 Reply
Nathan Currier-Groh
Investor · Cincinnati, OH · Member since 2016 · 34 posts · 16 votes
8y
I think you would have a lot of demand of you were renting it. Lots of people are looking for whole house rentals.
0 Reply
Jake Walroth
Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes
8y
yea... apjones is near Northside.... but it's a fringe street.... that combined with the color, size, lack of parking probably makes this one tough. My uncle just did a flip on Chambers.... no issues- but it was bigger, parking, yard, etc. It appears you did this through Build Realty.... what didn't they suggest for the ARV?
This seems like an ideal opportunity to BRRR, I'm guessing if you bought for around 60k you should be able to pull out a good amount of cash on a refi and still have rents of $1200-$1400 for a solid cashflow property.
Jake
3 Reply
Slocomb Reed
Real Estate Agent · Cincinnati, OH · Member since 2014 · 170 posts · 102 votes
8y
@Jake Walroth makes a really good point, if you decide you don't want to sell it for what buyers will offer you right now.
Northside is getting to feel like old news now. With property values increasing faster than wage growth, people are looking to perimeter neighborhoods to get more affordable housing CLOSE to the neighborhoods where they want to work and play. College Hill is getting some Northside love, Kennedy Heights is getting some Oakley love, and Mt Auburn and Walnut Hills are getting some OTR love.
What @Paul Sian said about those areas may be right. Man, there are some absolutely gorgeous pockets with big historic homes in Westwood, but we usually write it off as a C-class rental neighborhood!
3 Reply
Jake Walroth
Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes
8y
@Slocomb Reed not going to lie....being a proud westsider... and growing up in Westwood... it's good to see 25-35 year old friends moving into parts of Westwood. Westwood is the largest neighborhood in Cincinnati by a good margin.... so like you said... it gets written off as C-D class.... but there are tremendous pockets where people are renovating/fix ups.... as you said.... if someone dropped you on Epworth.... you wouldn't know you weren't in Hyde Park.
Westside Brewery has been busy the few times I've been there-- with foodtrucks.... never thought the westside would see foodtrucks... there's also a few other shops that have popped up.... Nation is opening up their 2nd location in the old firehouse..... lots of good movement..affordable, quiet pockets, not disconnected from downtown/highways like most of the westside.
Cheers
4 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Sean Cole Interesting observation there. I guess it’s the tension of wondering if you’re just going to lose out on too big a chunk of profit by listing it below market value vs. “knowing” in as much as you can that you would get some offers going well below market value.
@Slocomb Reed @Jake Walroth In response to your all's ideas to BRRR it, and in addition to Sean's suggestion of going below market value, after the insane amount of holding costs I've had to carry, it really wouldn't put back much money in my pocket...long story short, it was a bit of a mess of rehab. You guys have obviously looked up the property. Look at how long I've had to hold it. Delay after delay after delay - some admittedly city permit related, but also fair share of just no-real-good-reason delays. It took basically a year from close to list on a 1300 sq ft house. Do the math, and you can see it went way way too long. And yes, Greenleaf funded it, which means the holding costs were absolutely insane b/c their terms are absurd. Suffice it to say, between this experience and another one I did simultaneously in another city, I have paid a whole lot of dumb tax...and even more financial "tax" in the form of losses. I need to sell this property and just recoup as much cash as I can get...otherwise, sure a BRRR would be great. If this means I have to drastically reduce the price, maybe that's what I have to do. Many lessons learned.
One more note: someone mentioned that Northside is almost “old news” at this point...With the original projected timeline being at latest spring of 2018, I do believe this would’ve sold right at the peak of all the skyrocketing values.
1 Reply
Slocomb Reed
Real Estate Agent · Cincinnati, OH · Member since 2014 · 170 posts · 102 votes
8y
@Tae C. it sounds like it would've been a decent deal if it were structured with better partners. Sorry to hear about your losses, and I hope you get it sold soon! If I can offer any advice on getting is sold, PM me and let me know!
0 Reply
Jake Walroth
Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes
8y
@Tae C. I’m generalizing here a bit.... but I’ve bought and refinanced a few properties just up the hill from Northside..... my appraisals have seemed to be much loftier on refinances than purchases.
Good luck
2 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Slocomb Reed
Yeah honestly even if i sold at like $180-$185k it would’ve been just fine if it only took the 3 months on the rehab like it was supposed to. I appreciate your offer to help, definitely will take you up on it if something comes up!
@Jake Walroth
Interesting, my past experiences have been somewhat flip flopped compared to yours. But either way, unfortunately the carrying costs along with some of the overages still killed me and the refi just won’t be very helpful for my bigger picture goals/needs.
0 Reply
Sean Cole
Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
8y
Tae, I didn't look up the house so I didn't see that you'd worked with that specific company. I've been told that they aren't even providing comps or rehab breakdowns anymore. That true? They're currently defendants in 2 class action lawsuits here in Hamilton County (disclosure: I'm a plaintiff in one of them and they are suing me in an unrelated matter).

Unfortunately, it's highly likely that you were set up for failure from the beginning. It's not the answer you want to hear, but you're better off getting the house priced to sell and cutting your losses now vs. making that 15% payment each month hoping that someone will come along an pay your price.
0 Reply
Tyler Weaver
Investor · Cincinnati, OH · Member since 2008 · 319 posts · 243 votes
8y
@Jake Walroth
The market is definitely cooling down. I think this really impacts product with deficiencies, where last year at this time they were being sold for near top dollar, they are now not even getting the time of day. In a few markets that are hot in Cincinnati, there used to be 0-1 viable move in ready properties on the market at any given time and now there are 3+. This means to sell a property your house needs to be better for the buyer than those other 3, rather than just rehabbed and on the market at the same time the buyer is ready.
@Jake Walroth If you don't mind me asking, what bank are you using for your refi?
0 Reply
Jake Walroth
Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes
8y
@Tyler Weaver NRL Mortgage - ask for Justin Allen
0 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Sean Cole
Definitely well aware of the ongoing lawsuit you are referring to. Yes, they still do offer rehab and ARV numbers. Their ARV actually wasn't crazy off back then...again, a whole year ago. And actually their rehab wasn't too awful either believe it or not. I don't blame this one on them - I made my decision back then based on my own due diligence anyway. Now, yes, the 5 pts and 15% are absurd and back then, not knowing much better, I was drawn in by that $10,000 down payment number. Regret borrowing from them every day. I have access to so much cheaper money now. They're making an awful lot of money on this project though, that's for sure.
0 Reply
Sean Cole
Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
8y
@Tae C. one of the lawsuits is arguing that the trust model they use is illegal because of self-dealing and receiving undisclosed fees.
0 Reply
Eric Kottner
Flipper/Rehabber · Loveland, OH · Member since 2014 · 34 posts · 24 votes
8y
This is great information about Northside. Generally I tend to stay aware from Now areas simply for this reason. For the people who responded is this what you think is going to happen with madisonville in the next 1-2 years?

Just to give my insight I flip and invest mostly in Butler/Warren county
1 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Sean Cole
Yep I saw that as well. I can't really speak into the actual legalities and logistics of it all just b/c I am not well versed in it...however, I did learn a lot about how it functions just by reading up on the lawsuit files that are posted publicly online. But I at least agree that the Trust - Trustee - Beneficiary format is a strange one and has presented some complications and questions that I haven't had to have with some other lenders.
0 Reply
Ray James
Cincinnati, OH · Member since 2016 · 2 posts · 0 votes
8y
Tae would you work with Build Realty again in the future? Who would you use as your hard money lender?
I had a meeting with them a month or so ago and am currently receiving their offers but their setup seems to rely on trusting them quite a bit and their focus is more on the lending side. Many of the offers don't have an address just a street name and they said though you could view the property they would be a good chance it would be sold before you looked at it.
Also it seems like financing is their real business as when I told them I was planning to initially do an all cash buy & rehab they said those using financing get priority.
And like you mentioned they really push that 10k figure that you can get in and get started with only 10k cash but then you're taking on a lot of high interest financing based on their figures working out and selling quickly.
0 Reply
Tae C.
OP
Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
8y
@Ray James
The simple answer is no, I personally would not, if for nothing else that to pay 5 points (4.9 pts technically if I recall correctly) and 15% is way too expensive in this day and age of competitive lenders. They made a ton of money on my loan with the upfront points and as many delays as I had in the rehab process. Honestly, good on them for finding avenues for good ROI like they obviously have through their lending...not really their fault in any of the difficulties I have shared above, truthfully. And I will say they're fairly generous in terms of what they approve per individual draw request, so there's that. But no, I just can't afford to pay that much for capital anymore moving forward, period. PM me and I can share some other lenders.
0 Reply
Jake Walroth
Investor · Cincinnati, OH · Member since 2016 · 208 posts · 157 votes
8y
@eric I’ve heard Madisonville has been on the come up for “20 years”.... but I will say, working on boarder of Oakley and HP... I find myself in madisonville more often... mostly for Mazunte lol... but with Medpace, the Summit Hotel, the Ackerman Development coming online.... and the fact it’s surrounded by some posh *** neighborhoods I think it has a good future.. I don’t invest/haven’t looked much at the real estate... but I dig what’s going on over there... think a brewery is going in as well.
Cheers
Jake
0 Reply
Tyler Weaver
Investor · Cincinnati, OH · Member since 2008 · 319 posts · 243 votes
8y
Originally posted by @Jake Walroth:

@eric I’ve heard Madisonville has been on the come up for “20 years”.... but I will say, working on boarder of Oakley and HP... I find myself in madisonville more often... mostly for Mazunte lol... but with Medpace, the Summit Hotel, the Ackerman Development coming online.... and the fact it’s surrounded by some posh *** neighborhoods I think it has a good future.. I don’t invest/haven’t looked much at the real estate... but I dig what’s going on over there... think a brewery is going in as well.
Cheers
Jake
Agh, Mazunte. I think I know where I am eating lunch today.
Madisonville has definitely seen a surge in the past few years. There was a post on the FB hyde park mom's group a few weeks ago about Madisonville, and there was a cornucopia of stories about moving to Madisonville to raise their kids and loving it there. I have been involved in a number of flips and own property there, and can say that even in the past year there have been massive positive developments there. Madison Place has a draw for its walkability to Mariemont square, and in many places is much closer to the square than most of Mariemont.
1 Reply
Rodney Rowland Yarger
Specialist · Southwestern Ohio · Member since 2018 · 21 posts · 11 votes
8y
My understanding is Northside has been on the fringe of "igniting" for years but just doesn't quite get there. Every real estate cycle, it gets some action early that seems to fizzle.
It's an area that seems to appeal to DINK's in their late 20's and early 30's and hipsters.
My observation is that prices have gotten kicked up a little high in this last cycle. If you already have a place there, wait it out, drop your price, or sell on land contract or something similar.
0 Reply
John Marshall
Rental Property Investor · Cincinnati, OH · Member since 2018 · 3 posts · 1 vote
8y
Northside Neighborhood of Cincy is a dangerous. In 2011-13 it was way worse, I lived in the American Can Building - Considering the lack of inventory elsewhere in Cincy it should turn around.
Unfortunately just this morning the news showed a shooting nearby where SWAT was called in.
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