All Forum Posts by: Ryan Pyle

I love it when out of state investors buy property in Toledo. I usually buy it from them or their lender a few years later for half of what they paid.

I'm being a little bit snarky, but there is a lot of truth to what I said. Rarely do out of state buyers get good deals in Toledo (and I'm guessing most other cities too). In every market in the country there are loads of excellent LOCAL investors that spend 80 hours a week scouring for deals. Do you really think that the California, Utah, Australia, etc guys are finding deals that we don't see? No. They are buying the crap that we passed on. Here that means war zones or flood zones.

The other thing I love to hear them say is that they have their "power team" local real estate agent and property manager on the job getting them local deals. Again, trust me, they are selling you the crap that the rest of us don't want.

Again, not trying to sound nasty or snarky. Just speaking the truth.

Real estate is local. Real estate is local. Real estate is local.

I'd give the roof and mechanicals a hard look. If they are original they are probably at or near the end of their useful lives. I would back the cost of those replacements out of the purchase price. Also inspect each unit and calculate any repairs they may need to make them marketable. That goes for the occupied units too.

At $450 * 6, you are looking at $32,400 in gross rents. I have a hard time believing your expenses would only be $13k/yr. What are the property taxes? What does insurance run down there? Who pays electric, gas, water/sewer? If owner pays, what does each run per unit typically down there?

I am buying small apartment buildings (8 - 30 units) that have management, occupancy, or other problems that are curable. I am paying 12% cap rates based on existing financials. These are not easy to find, but they are out there. I bought 1 last year and have a few that I am looking at now.

Paying for them ties in with the last part of your question: "what are your plans 5,10,20 years down the road for the properties." I have about 40 war zone properties. They cash flow okay, but require a TON of management. And the "getting broken into five times before they are rented" that Mitch refers to is a reality...a very expensive reality. So, as I pay them off I am selling them and using that money as down payments for apartment buildings.

BTW, I am not buying apartment buildings in war zones. My goal is to eventually be completely out of war zones, It will take a while.

I'm in Toledo, OH. Sweet spot here is western suburbs. You can be all-in for $40k and rent out for $850/mo. Don't get tempted by the inner-city junk like most of the CA, UT and Australia people do. They pay $18k and rent for $600/mo. But they are in the "no pizza zones" and end up losing their butts.

I just got hammered on one. Sale price was $99.9k. Buyer was going FHA and I owned the property less than 6 months so we needed 2 appraisals. The first appraisal came in fine. The second came in at $93k. I tried to appeal but the appraiser said the neighborhood was a declining market so he had to use comps from the last 90 days. Well, the last 90 days are January, February and March. Not many sales to choose from. So, I'm stuck with $93k. We close on Friday. The other propblem is I just listed another house 2 blocks over for $109.9k. Do ya think my $93k comp might make this next appraisal kind of difficult?!

This is the third time this has happened to me in the last 12 months. My total loss from bad appraisals in 12 months is $22k.

The hard part about the '3 months comps' rule is that most of my flips take 3 months to rehab and get under contract so I have no idea what my comps are going to be ahead of time.

Sorry for the rant. Had to get it out to people who feel my pain.

I would guess 60 -70. How it breaks down is never the same, and I'm always "on".

On the flip side of things, right now I have 2 flips under contract for sale that are waiting to close, 3 flips for sale, and 1 flip in construction. I am trying to find more flips to buy. Inventory of good REO's is low right now, so I'm looking at just about anything. I put up several craigslist ads every day to advertise my for sale flips. Then there is answering phone calls and showing the houses. Then I have to work with the buyers and lender to see if we can get them qualified to buy.

On the rental side I have 1 vacancy which was filled yesterday. I have 2 more coming up next month. I went to eviction court last week (which accounts for 1 of next month's vacancies). I had 1 section 8 inspection last week and 2 more this week. Of course there are always service calls for rentals. I don't do my own work, but I do inspect most repairs before I pay the bill.

I am also trying to buy another apartment building right now, so I did go look at 2 buildings last week. That's worth a few hours right there.

With that said, none of it feels like work, in the cubicle jockey sense of the word. It feels more like I'm playing a game. It's not all fun, but it is all part of the process.

I would give her all of her rent and security deposit back. The goal is to wash your hands of her. If you try to nickel and dime her she will not go away.

You say someone tried to kick the door open. Did they get in?

I'm in Toledo. Here I can find bank owned homes all day long that fit the 2% rule. I'm looking for houses in $75k to $120k neighborhoods that rent out for $700 - $900 per month.

Check out the post in "related discussions below" titled "What range does the 2% rule work." There is a great answer.

No, that does not sound like a good deal to me. Some areas are better for buying rentals than others. Where are you located?