All Forum Posts by: Jason Allen

I'd buy a multi-family property that cash flows in an appreciating market with a growing economic base, like Columbus, Ohio.

What are the pros and cons of investing in A-class vs C-class areas? 

Personally, I think of C-class like Jordan Belfort's famous pink slips. First, the cons of C-class, aside from section 8, C-class has more fluctuation in price, more tenant problems (vacancy expenses, evictions, etc), and local crime. It is just more labor intensive in general. Of course, many of these headaches can be delegated to a property manager. The pros - cash flow, cash on cash return, and potential for more significant appreciation in gentrifying areas.

Conversely, A-Class is analogous to the S&P 500. It has more reliable tenants (some of which even fix the property up), more stable and predictable appreciation, and just over-all less work. The cons - very hard to cash flow off the bat, especially with a low down payment and... I'm not sure.

I'd love to hear other opinions on the topic. Does this look accurate in your experience?

It's no secret that Columbus, Ohio was named the 3rd hottest Real Estate market by Zillow for 2024 - https://www.nbc4i.com/news/local-news/real-estate/columbus-n...

This shouldn't be a surprise with so many fortune 500 companies like Intel, Google, and Wells Fargo investing Billions in Columbus

- https://www.10tv.com/article/news/local/road-improvements-be...

- https://ohiocapitaljournal.com/2023/05/08/google-is-building...

- https://www.dispatch.com/story/business/2023/12/12/wells-far...

But I am constantly asked, "where are the deals?" While the 1% rules and deals with significant equity have become increasingly difficult to find within the 270 outer belt, there are an abundance of these deals to be found both off and on market in the Columbus' Tertiary Markets. For instance, Intel's $20 Billion investment is in Licking County (see link above - well outside the 270 outer belt). Many of locals are against the new developments and want to keep the potential cash on cash return a top secret. While others understand the development and influx of "out of state money" is inevitable. The locals who realize that this IS inevitable have been cashing-in and seeing absurd returns on their investment. While you can never lose selling at a gain, what are the ones who are selling potentially missing out on by selling this early? Well, just the potential appreciation that could be seen with the 20,000 new jobs Intel is predicted to bring in with an average salary of $135,000 a year (currently over 2x the median house hold income in Licking County) - https://www.axios.com/local/columbus/2022/01/24/mega-intel-c... So, after Intel finishes its $20 Billion investment, there will be an additional $2.7 Billion paid to the employees every year after ($135,000 average salary x 20,000 predicted jobs). I can only imagine the appreciation that will come after the factory is complete.

You should look for an investor friendly agent and establishing your core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio.

I try to avoid the headache unless the deal really makes sense.

Glad to have you! 

Have you considered investing in Columbus, Ohio? There are an abundance of opportunities here meet or exceed the 1% rule. 

MFH helps reduce vacancy expense, and you'll typically have a better ROI.

There are a lot of benefits to getting a promissory note from both a legal and accounting perspective.

The areas around Wright-Patterson AFB are great rentals. You can get military renters and report to their supervisors if they are late on rent. This is a very reliable source of renters.