Real Estate Consultant · Cincinnati, OH · Member since 2020 · 28 posts · 8 votes
Hello BP community, my wife and I just moved to the Cincinnati area from the DC metro region and we are just starting our real estate investing journey. My wife has bought, rehabbed and sold 3 homes, but those were primary residences. We are currently looking for fixer upper properties to flip with the goal of eventually buying and holding. We are looking to flip initially because we do not have a lot of cash on hand to buy property, but we do have a second home in Virginia with equity that we could potentially use to fund our purchases. However, I have no experience using home equity to buy other properties, so if anyone has any advice on that option please weigh in.
That said, has anyone here used investors or hard money lenders in the Cincy area and if so, what has your experience been? Can you recommend any lenders or investors? Any other advice would be much appreciated!
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
Hi @Ryan Gandy. Welcome to Cincinnati!! A reputable hard money lender in the area is Darrin Carey with Dayton Capital Partners. I lend as well and I am a little cheaper and easier, but I don't lend on rehab costs, so you will need to have more skin in the project. I feel lending will be the least of your worries at this time though. It will be hard to find a suitable property to flip. The market in Cincinnati is hot and flippers are buying at thin margins. I purchase properties at the sheriff sale and am constantly surprised at the sale prices.
Cincinnati has a very strong REIA and I would recommend checking them out as well.
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
Hi @Ryan Gandy. Welcome to Cincinnati!! A reputable hard money lender in the area is Darrin Carey with Dayton Capital Partners. I lend as well and I am a little cheaper and easier, but I don't lend on rehab costs, so you will need to have more skin in the project. I feel lending will be the least of your worries at this time though. It will be hard to find a suitable property to flip. The market in Cincinnati is hot and flippers are buying at thin margins. I purchase properties at the sheriff sale and am constantly surprised at the sale prices.
Cincinnati has a very strong REIA and I would recommend checking them out as well.
Real Estate Consultant · Cincinnati, OH · Member since 2020 · 28 posts · 8 votes
5y
@Adam Walter thanks for the input! We do have some cash for rehab costs, so we're really looking for capital to make purchases. What are your current rates?
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
@Ryan Gandy It's deal dependent, generally I look for 15% interest only with a certain percentage down on the purchase. No prepayment penalties, no points. Property has to be in Hamilton, Butler, Warren, or Montgomery counties. I think hard money is going to be around 12-15% and 3-5 points. Also, I will do lower amounts (under 75k) whereas some of the hard money lenders won't do those.
I sell distressed properties (mainly rental type) and offer financing with those at better rates than above. I don't have too much availability currently, but check out my website at almaholdingsgroup.com to see some past properties. Have you considered doing a BRRRR? If your goal is buy and hold, that might be easier to do.
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
@Ryan Gandy I am not the best person to ask specific info on BRRRRs; I haven't done it in years. I feel in the current market, it will be easier to find a rental type property than a flip. If I understand your goals, you want to flip a property to use those proceeds to buy a rental. If you don't need those funds to live off of, I would focus on buying a rental properties to BRRRR. I believe many banks are seasoning properties at 6 months.
I buy and sell around 30 properties per year, mainly to wholesale. 90% are rentals, I do this for a living and look every day for deals. Your competition finding flips in Cincinnati is going to be really tough. If I go to a sheriff sale to buy a distressed property in Cincinnati with an ARV of $200,000 which I think I can sell to a rehabber for $115,000, most times it will sell (sight unseen) for $125,000 - $140,000. The big flip operations are buying at slim margins, and savvy homeowners are buying foreclosed properties because they can't find what they like on the MLS.
Flip properties on the MLS are usually sold before they hit the market. That leaves traditional wholesalers who are asking premium prices on flips or don't actually have a deal. Two years ago I started looking outside Hamilton County for deals because of the competition. 4 years ago 100% of my purchases were Hamilton County, now I would say 30-40% are Hamilton County deals, only because I have a good network there.
There is just no inventory and a HUGE demand for rehabbed owner occupied properties.
New to Real Estate · Member since 2018 · 11 posts · 2 votes
5y
@Ryan Gandy I have rental property out of state, but lived in cincy my whole life until 2017. @Adam Walter is correct, the cincy market is hot for all parties. My son just purchased a house and he had escalation clauses and he still kept getting outbid by 20-30k. It’s the same with distressed properties, there is just nothing available.
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
@Bill P. Thanks. I like to drive by the properties every once in a while and I am very familiar with the four counties mentioned and am in the areas at least 1-2 a month. I live further away from Clermont county and am not as familiar with that area.