Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
Anyplace in Ohio is a good place to buy. What’s your price range? Rural and northern Ohio are less expensive than central and southwestern Ohio.
Hi @Shandy Victory, welcome to the BP Forum! What is your price range/down payment amount? Are you looking for turn-key properties or something along the lines of a "fixer upper"? Are you interested in buying a new construction property?
Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
You will get tons of people saying their market is the best. And it may be, depending on your goals. Are you looking for max cash flow for NOW? Or an area that is growing, has more potential, but less cash flow?
Hey Shandy, it really depends on what you're aiming for. If cash flow is your goal, Cleveland's a solid choice. You can expect returns around 10-18% in C-Class neighborhoods, with duplexes typically priced between $150K and $200K. But if appreciation is more your thing, Columbus is the way to go. You’re looking at a potential 7-17% appreciation, with duplexes in C-Class areas starting around $200K. Best of luck!
Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
Hi Shandy! I'd definitely recommend looking at Columbus Ohio for your next multifamily! It's a super affordable real estate market where you can still find deals that hit the 1% rule anywhere from $120-180k purchase price (or $200-250k for multifamily). It's one of the hottest markets in the US right now with so much population growth, job growth, and companies moving/developing here (26B Intel headquarters being built here, 68K+ enrollment in Ohio State University, Amazon, FB, Google, Honda, Nationwide, Anduril, etc.). You can still find positive cash flow (aka the 1% rule) and amazing appreciation potential. It's the best of both worlds. Happy to connect and answer any questions you have.
Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
Anyplace in Ohio is a good place to buy. What’s your price range? Rural and northern Ohio are less expensive than central and southwestern Ohio.
Hey guys! Looking to buy my first multifamily and I want to do it Ohio, but would like to know where in Ohio. I’ve never been to Ohio but I’ve heard it’s a good market to buy real estate.
Hey Shandy!
I have multiple multifamily properties in Columbus, Ohio, and I'm looking to add more. It really just depends on what you're looking for whether it is appreciation or cash-flow. Columbus is more for appreciation and places like Dayton, Toledo, and Cleveland are more for cash-flow.
@Shandy Victory I am in the same position as you looking to invest in Ohio I am flying out there next month to check out the area. Maybe we can talk network etc.
@Shandy Victory I am in the same position as you looking to invest in Ohio I am flying out there next month to check out the area. Maybe we can talk network etc.
What city are you visiting? On the "Real Estate Rookie" podcast, a guest host recommended Dayton. I'm familiar with the market in Toledo, Akron/Canton, Kent, Columbus, Warren, Youngstown, and especially Cleveland.
I 100% agree with everyone here. However, do not go sight unseen unless you have the capital for major repairs. Don't just go by the pictures they posted. Use Google street view to get an idea of the neighborhood. It varies greatly street-by-street if you pick a C-class neighborhood.
I have associates that fix up a place beyond the typical look of the neighborhood but they have to buy-hold (which is fine) as selling means loss of investment.
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class
and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.
If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
Property Tenant Pool: closely linked to location, but not always.
Property Location: closely linked to tenant pool, but not always.
Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties: Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years. Tenant Default: 0-5% probability of eviction or early lease termination. Section 8: Class A rents are too high and won’t be approved. Vacancies: 5-10%, depending on market conditions. Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Class B Properties: Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions. Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation. Section 8: Class B rents are usually too high for the Section 8 program.
Class CProperties: Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability. Tenant Default: 10-20% probability of eviction or early lease termination. Section 8: Class C rents usually meet program requirements, proper screening still recommended. Vacancies: 10-20%, depending on market conditions and tenant screening. Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class DProperties: Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”. Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection. Vacancies: 20%+, depending on market conditions and tenant screening. Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
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