All Forum Posts by: Justin Lemaster

I work with a lot of out of state investors purchasing property in the Columbus, OH area. Many investors that I talk to have the notion they can purchase a 30-40k homes in a rougher area; put a little money in it and rent it out assuming they've made a great deal. As a property manager I wanted to share a few points that make deals such as these, less lucrative than initially thought. (Sorry to burst your bubble)

1.) Initial start up costs- a 30k property is generally going to need a large sum of money up front to make the home market ready (turn key). The areas that offer these properties have been neglected by previous owners, tenants etc. Simple things such as not changing a furnace filter regularly can ultimately cost the new owner $1,000's in replacement parts. From what I have seen, kitchen and bathrooms need updated, new flooring, painting, windows, roofs, etc. This will quickly turn your 30k investment into something much, much more. One should consider value after all the repairs have been completed.

2.) Rental turn over- Generally the 30k rental property is going to carry a much, much higher turn over rate. I've seen residents turning over in less than 120 days. Causing the owner to put forth more money to fix what has already been damaged, re-paint, clean a unit they just turned a short time ago. Even with a strict set of rental requirements, the area the property is located will not draw in the type of client you will ultimately desire. Again, costing you money.

3.) The blame game - Once your stress levels have reached a boiling point with questions such as 'why is my property always vacant?' Or, 'Why am I not receiving a dispersement check again this month?' You begin to push blame to your property manager, the tenant etc. Of course, this creates many problems especially if your an out of state owner. 

I feel it is very important to really take into consideration the area, and potential rental clientele your target properties will likely take on. Bumping your price even a marginal amount can relocate your prospects and give you more confidence in your investment with quality residents and a property that likely needs less maintenance/turn over, over time. At the end of the day if the margins work for you, the sale price shouldn't matter, especially if it will put you in a more desirable area.  

Agree with Hondros! They provide the tools needed to pass your exam and excel in the field. 

Hi David, There are many property management companies in the central ohio area. I encourage you to really do your homework on them. Many are not what they appear, often times looking at there best interest rather than the clients. I have worked for several PM companies over the years and have loads of horror stories. I am finally very happy with where I landed currently. Best of luck on your search for a great property manager. 

Welcome to BP John! Their are a lot of great useful tools here to help you be successful in the real estate industry. My suggestion is to locate a person, or organization (such as a property manager) to help point you in the right direction. Many people seem to want the cheap property to get started. I have found this isn't often the case. You really need to know what your doing and put a plan together. Once you have that your search can begin. Here in the Columbus Market, things seem to be moving swiftly when they come up. The readiness to submit offers is also key!

I believe you need a licensed real estate broker. You can always call the Ohio Division of Real Estate for clarification.

Welcome to Bigger Pockets Maurice! This site is a great tool for both new and seasoned investors! Their are also great Property managers on here as well with a wealth of knowledge at the ready! 

The BBB can be a good source to research Property managers, look more for specific owner issue commentary, rather than a disgruntled tenant who just wants to complain (the PM didn't fix anything, etc. Their is generally a deeper back story you don't see when it comes to tenant relations). You can learn a lot about a PM by spending 10 minutes to learn the back story on the company. Most companies I've dealt with put up a great front and sell their product well, but don't follow through. Also, look for a company that focus's their efforts on investment properties. What this means to you as the consumer is for example. You have two property managers, one manages your "accidental landlord clients" (350 properties/individual owners in portfolios) and the other manages for investment clients (350 properties/20 owners). The likely hood of a better experience for the owner will lay with the investor property manager, better response, better personal care, likely better maintenance structure (better pricing by not having to outsource work much), etc. Their are a lot of property managers in Columbus, but only a few that I would recommend to anyone as being reputable. (I happen to work for one, thankfully, but have worked for a few that are dismal at best. I have plenty of horror stories to offer, trust me.)

I just wanted to pass along some information that could be useful to many investors out their, both novice and veteran.

Westgate is a great pocket in that area, unfortunately, everything surrounding it tends to drift away very quickly. I am closing on a duplex today in the Westgate area :)

Donate it to the city, if you can get out of it. I was in similar situation, however it was a land contract. I luckily was able to void the contract out years later, but it was a money pit for me. It was also in Linden, like you I bought it when I was young and new to the business. I feel I have added years to my life, by not having to deal with it anymore. Good luck, I hope you end up with a positive resolution. 

Great job @Keith Vinson

Sounds like a fast process! How do you come accross these types of properties typically? Learning more and more about wholesaling everyday!