First timer and Deal Sounds Too Good to be True

Cincinnati, Ohio
Real Estate Deal Analysis & Advice
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First timer and Deal Sounds Too Good to be True

Don Le
Member since 2025 · 3 posts · 2 votes

Hi there all! I am a very first time investor and am looking at a particular property in OH. Got into this game because at the very young age of 35, my wife got diagnosed with Stage 4 lung cancer. Long story short, I realized I needed to change something. It killed me that now she is forced to go back to work even though she still is not feeling well. Anyway you're not here for a sob story but I wanted to ask for some help for my first time. My main issue with this property is that it is been bought and sold 5 times in the past 5 years. People don't hold it it for any longer than a year. It's in a very small town and I verified that the average rents are correct. My big question is that other than getting a good inspector out there, what am I missing? 

Purchase Price: $280,000

Down Payment: $75,000 (~27%)

Loan: 6.625% interest, 30-year fixed

Rents: $1,350 per side ($2,700 total, tenants pay utilities)

Property Taxes (2023): $4,247/year

Insurance: $2,600/year

Property Management: 10% of gross rent

Maintenance + CapEx: 10% of gross rent (includes reserve for roof replacement in 5 years)

Vacancy: 5%

Annual Gross Rent: $32,400

Total Operating Expenses: ≈ $13,600

Net Operating Income (NOI): ≈ $18,800

Cap Rate: ≈ 6.7%

Annual Debt Service: ≈ $16,000

Cash Flow (after all expenses): ≈ $2,800/year ($230/month)

Debt Service Coverage Ratio (DSCR): ≈ 1.17

Cash-on-Cash Return (Year 1): ≈ 3.7%

Notes:

  • Roof expected to need replacement within 5 years (budgeted $10–12K).
  • Tenants pay all utilities,
  • Rents appear market average.
  • Located in a stable B-class neighborhood with consistent rental demand.
  • Population growth slightly negative but a 20 minute drive from Cincinnati. 
1Reply
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Ernie Rodriguez
Real Estate Agent · Miami FL, USA · Member since 2024 · 19 posts · 10 votes
11mo
If something is telling you it’s too good to be true, I usually stick with my instincts. Another deal will come around
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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 917 votes
    11mo

    @Don Le

    Hey Don, first off, really sorry to hear about what you and your wife are going through — it’s inspiring that you’re still pushing forward and looking to build something for your family. On the deal, the numbers don’t look bad on paper, but the fact that it’s changed hands five times in five years is definitely worth digging into. Sometimes that’s a red flag for hidden issues like foundation, drainage, or tenant quality problems that don’t show up in a quick inspection. I invest in the Midwest myself, and one thing I’ve learned is to always talk to a few local property managers — they’ll tell you what doesn’t show up in the listing or inspection report. If the fundamentals check out, the Cincinnati area can be a solid long-term hold, but trust your due diligence more than the spreadsheet.

    [email protected]614-418-6081
    0Reply
  • Don Le
    OP
    Member since 2025 · 3 posts · 2 votes
    11mo

    That's a great idea I didn't think about that, thanks!

    0Reply
  • Ernie Rodriguez
    Real Estate Agent · Miami FL, USA · Member since 2024 · 19 posts · 10 votes
    11mo
    If something is telling you it’s too good to be true, I usually stick with my instincts. Another deal will come around
    1Reply
  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    11mo

    I’m also sorry to hear about your wife, hope she has a positive outcome and admire your perseverance. I’m not especially active now, only bought 2 properties and sold 3 in past 5 years on east coast but unless in a great neighborhood that is almost guaranteed to increase significantly in value or I was going to live in one side even in consideration of tax advantages I would not invest $75,000 for $230 month especially with the work and liability that will be involved in owning a duplex even with a property manager. 

    0Reply
    • Don Le
      OP
      Member since 2025 · 3 posts · 2 votes
      11mo
      Quote from @Jules Aton:

      I’m also sorry to hear about your wife, hope she has a positive outcome and admire your perseverance. I’m not especially active now, only bought 2 properties and sold 3 in past 5 years on east coast but unless in a great neighborhood that is almost guaranteed to increase significantly in value or I was going to live in one side even in consideration of tax advantages I would not invest $75,000 for $230 month especially with the work and liability that will be involved in owning a duplex even with a property manager. 

      This is very helpful! I think because I am so new at this, I barely have any idea of what a “good” deal is, what good cash flow looks like for a 75K investment, etc. Thank you.
      1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    11mo

    @Don Le first off, are you sure tenants pay their own water?
    - How?

    Most cities only install one water meter per BUILDING, not unit.
    - This is why submetering systems are installed in larger aparment buildings.

    As others have said, speak with some of the PMCs in the area - starting with the one currently managing the property.

    Also, call the city about permits, violations and fines.

    Lastly, go talk to the neighbors to see what they know.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    1Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    11mo
    Quote from @Don Le:

    Hi there all! I am a very first time investor and am looking at a particular property in OH. Got into this game because at the very young age of 35, my wife got diagnosed with Stage 4 lung cancer. Long story short, I realized I needed to change something. It killed me that now she is forced to go back to work even though she still is not feeling well. Anyway you're not here for a sob story but I wanted to ask for some help for my first time. My main issue with this property is that it is been bought and sold 5 times in the past 5 years. People don't hold it it for any longer than a year. It's in a very small town and I verified that the average rents are correct. My big question is that other than getting a good inspector out there, what am I missing? 

    Purchase Price: $280,000

    Down Payment: $75,000 (~27%)

    Loan: 6.625% interest, 30-year fixed

    Rents: $1,350 per side ($2,700 total, tenants pay utilities)

    Property Taxes (2023): $4,247/year

    Insurance: $2,600/year

    Property Management: 10% of gross rent

    Maintenance + CapEx: 10% of gross rent (includes reserve for roof replacement in 5 years)

    Vacancy: 5%

    Annual Gross Rent: $32,400

    Total Operating Expenses: ≈ $13,600

    Net Operating Income (NOI): ≈ $18,800

    Cap Rate: ≈ 6.7%

    Annual Debt Service: ≈ $16,000

    Cash Flow (after all expenses): ≈ $2,800/year ($230/month)

    Debt Service Coverage Ratio (DSCR): ≈ 1.17

    Cash-on-Cash Return (Year 1): ≈ 3.7%

    Notes:

    • Roof expected to need replacement within 5 years (budgeted $10–12K).
    • Tenants pay all utilities,
    • Rents appear market average.
    • Located in a stable B-class neighborhood with consistent rental demand.
    • Population growth slightly negative but a 20 minute drive from Cincinnati. 

     This doesn't look like an absolute home run, so it's not like you're getting cheated, but is does look good assuming it's a B- area. I have an idea of what area you're in with the info you gave, but assuming I'm right, this is pretty par for its course. If you have questions let me know, i'm an agent in Cincy and NKY

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    0Reply
  • Joseph TadresPro Member
    Real Estate Agent · Columbus, OH · Member since 2025 · 184 posts · 179 votes
    11mo

    Hey Don, I would not worry that the deal is too good. It sounds decent though, I would definitely recommend seeing it in person and checking out the area.

    1Reply
  • Marco FioreBusiness Member
    Real Estate Agent · Cincinnati, OH · Member since 2022 · 78 posts · 73 votes
    11mo

    Hey Don, want to first start off by saying I am sorry to hear about the diagnosis and hope things trend more positively soon! As far as the deal goes, it might not be too good to be true, however, I would try to understand the exact neighborhood grade. These numbers make it seem like it is located closer to a C grade area. Very rare to cashflow immediately in a B area without conducting renovations or sweat equity strategies (removing existing tenants, turning units, etc.). Also, 99% of the time, owners have to cover the entire water/trash expense. Did you account for the increase in taxes based on the new purchase price? These are some questions I would be asking.

    Sending a connection now. I work with tons of in-and-out of state investors who purchase single family rentals, 2-4 units, and 5+ multi-families around Cincinnati. I can give you a better understanding of where your numbers lie once I take a look.

    eXp Realty - Marco Fiore Real Estate519 Reviews
    WebsiteView Page
    1Reply
  • Jaycee GreenePro Member
    Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
    11mo
    Quote from @Don Le:

    Hi there all! I am a very first time investor and am looking at a particular property in OH. Got into this game because at the very young age of 35, my wife got diagnosed with Stage 4 lung cancer. Long story short, I realized I needed to change something. It killed me that now she is forced to go back to work even though she still is not feeling well. Anyway you're not here for a sob story but I wanted to ask for some help for my first time. My main issue with this property is that it is been bought and sold 5 times in the past 5 years. People don't hold it it for any longer than a year. It's in a very small town and I verified that the average rents are correct. My big question is that other than getting a good inspector out there, what am I missing? 

    Purchase Price: $280,000

    Down Payment: $75,000 (~27%)

    Loan: 6.625% interest, 30-year fixed

    Rents: $1,350 per side ($2,700 total, tenants pay utilities)

    Property Taxes (2023): $4,247/year

    Insurance: $2,600/year

    Property Management: 10% of gross rent

    Maintenance + CapEx: 10% of gross rent (includes reserve for roof replacement in 5 years)

    Vacancy: 5%

    Annual Gross Rent: $32,400

    Total Operating Expenses: ≈ $13,600

    Net Operating Income (NOI): ≈ $18,800

    Cap Rate: ≈ 6.7%

    Annual Debt Service: ≈ $16,000

    Cash Flow (after all expenses): ≈ $2,800/year ($230/month)

    Debt Service Coverage Ratio (DSCR): ≈ 1.17

    Cash-on-Cash Return (Year 1): ≈ 3.7%

    Notes:

    • Roof expected to need replacement within 5 years (budgeted $10–12K).
    • Tenants pay all utilities,
    • Rents appear market average.
    • Located in a stable B-class neighborhood with consistent rental demand.
    • Population growth slightly negative but a 20 minute drive from Cincinnati. 

    Hey @Don Le, welcome to the BP Forum! I see you've calculated the CoC, but have you also figured out the IRR? I'm estimating it at just under 13%.

    As a Fractional CFO to my developer clients, I would ask them if that return is worth the higher risk compared to just investing in the market, which on average generates a return of 8%-12% per year.

    [email protected]
    0Reply
  • Gregory Wilson
    Member since 2024 · 238 posts · 132 votes
    11mo

    In the Cincinnati market it is all about the neighborhood. There are places where the vacancy might be 145 days and others where you would never see 60 days. Add Zillow and Redfin "days listed" data for the local area. That may help reduce risk.

    1Reply
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