How to BRRRR in Ohio in 2024

How to BRRRR in Ohio in 2024

Investor 路 Denver, CO 路 Member since 2021 路 13 posts 路 14 votes

Today's Question: Big picture, what actions can I take to increase my chances of success on my first Cleveland or Columbus BRRRR? Take that wherever you want to :)

Why: I am fortunate that my job has given me far more than most of my closest friends and family, and I want to provide others with opportunities and support where it's most needed. Unfortunately my work is not scalable and does not allow me to extend such opportunities. Developing the tools to scale a substantial real estate portfolio would enable me to help people in a way I currently can not.

Me: I'm an investor located in Denver, CO preparing to execute the BRRRR strategy in Cleveland or Columbus, OH (aiming to use about $30-40k of capital). I already have a rockstar agent, but always looking to learn from additional voices. I have read David Greene's BRRRR book and countless biggerpockets posts on the topic, but recognize there are market specifics I don't yet know. Your recommendations, referrals, and words of caution will be invaluable. I have too many questions for one post, so keeping this post broad and will ask more specific questions in the coming weeks/months.

I have a good 6-figure job and some limited real estate investing experience (own one short term rental in the Denver area and recently Airbnb'ed a second property under the rental arbitrage model). 

Goal: Develop the tools to build generational wealth through real estate by executing one successful BRRRR by year's end ("success" would be getting most if not all of my capital back through refi of a property that genuinely cash-flows). Then evaluate what went right/wrong and execute at least four more BRRRRs in 2025.

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Evan HoppleBusiness Member
Real Estate Agent 路 Columbus Cleveland Dayton, OH 路 Member since 2023 路 285 posts 路 420 votes
2y

@David Colthart

You're looking at a SFH in Columbus or a duplex in Cleveland, both in C class neighborhoods. Columbus numbers are going to be tighter but you'll be see more appreciation than in Cleveland.

Avoid any of the "Heights" in Cleveland, those areas have POS which is a pain and capital intensive on a deal that needs extensive repairs. General rule of thumb is look for properties with Cleveland in the address, anything outside of that will have POS.

Start looking for contractors sooner than later - they'll make or break the whole deal. 

Having a solid PM in place will take some of the burden of being out of state away. 

I do business in both markets, happy to help 

Reafco Real Estate
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  • Member since 2024 路 5 posts 路 4 votes
    2y
    Quote from @David Colthart:
    Quote from @Nicholas L.:

    @David Colthart

    unless you're going to go there in person to oversee it, then... don't. i know those purchase prices seem attractive compared to Denver, but it is exceptionally difficult to execute a successful BRRRR from thousands of miles away. part of BRRRR is sweat equity and watching things closely, and that's exactly what you can't do remotely / from Internet.

    you tell me - how will you not do this?

    https://www.biggerpockets.com/forums/963/topics/1195280-expe...

    and why not stay local and BRRRR in Colorado where you can be hands-on? too expensive? save up more =)

    Thanks for taking the time to reply Nicholas! To be honest, @Luka Jozic (from the thread you linked) doesn't seem to be in terrible shape in my opinion, despite the discouraging comments he received.  Assuming he actually got the majority of his capital back in each of his 10 or so BRRRRs (which seems to be the case) he's likely accumulated a good amount of equity and is benefiting from debt paydown and tax advantages (with potential appreciation and improved future cash flow once the properties are stabilized being nice-to-haves if they happen). As someone without a ton of capital who's eager to "take action" (buzzwords, I know) and put in the necessary work and due diligence, BRRRRing OOS in a cash-flow market seems like a reasonable option (even if it isn't for everyone).  Seems to me that at scale, a portfolio like Luka's would indeed build wealth over time and open up options to transition into higher quality appreciation markets several years down the line, with the benefit of more capital and (more importantly) more experience.  I know this isn't the path everyone would choose, but it seems like AN option to me.  Would love to know if you think I'm missing something here, or what other options you think someone in this position could explore to start getting their feet wet and moving forward in the near term.

    I agree with your assessment here. My first BRRRR I got $10k back on a $155k all in investment (including financing) and I'm cash flowing $450+/month. These deals are out there in the right markets. I'm on my second and I project to break even and cash flow another $400/month. All in a city I never stepped in.

    I think you're thinking about this the right way. Don't be afraid to jump in and learn the best and hardest way. You'll have your fair share of setbacks but we all will/do. The hardest part of doing things remotely (after learninghow to spot deals) is finding a trustworthyGC that is cheap and quick (ask their ETA when they bid).

    Good luck!

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