All Forum Posts by: Rich Somers

There's money to be made in both high growth and low growth markets. It all comes down to personal preference and what your investment goals are. Just remember to always:

1. Buy for Cashflow

2. Secure Long Term Debt

3. Have plenty of cash reserves

If you follow these 3 rules, you'll do good in any market! 

Be careful with the declining population growth in Cleveland.  Cincinnati is also a great cash flow market with more of a stable population.  

Good Luck! 

For anything residential (4 units and less), don't use an LLC..a good umbrella policy is more than enough. For anything Commercial (5 units +), always use an LLC. Each commercial property should be held by it's own LLC in the state of the subject property.

All the LLC's in your portfolio should be owned by a holding LLC in a non piercing state such as Wyoming or Delaware. Reason being is this protects you from both the inside and outside attack. I'm by no means an asset protection attorney but this is how we have our LLC's structured.

Buy the duplex on a low money down loan and own 100% of it for yourself.  I just closed on a Duplex for $0 down here in San Diego for example, and the seller paid all my closing costs.  There are local credit unions out there who are doing low and no money down conventional loan products with no pmi, you just need to shop around.  

Good Luck! 

Two ways: 

1.  Buy larger Multifamily properties

2. Airbnb/Short Term Rentals, this of course provides more downside risk and is not entirely passive but can increase your monthly cash flow position tremendously if you're in the right market for it.  

Good luck! 

You're buying at $45K/door, and average rent per unit is $800. Just running simple math, I know if the average rent/unit is more than 1% of the price/door it should cash flow.  In your case it's almost 2% which means it will cash flow very nicely.  

Just make sure you know where you are buying.  Always check the median household income, crime, and school data of the neighborhood.  Generally speaking, you want your median household income to be at least $40K.  www.neighborhoodscout.com is a great source to pull this data.  

Good Luck! 

C Class Apartments are fine as long as you buy in a good location.  Median household income should always be north of $40K, preferably north of $50K.  Second most important thing is to have a great property manager.  Neighborhoodscout.com is a great tool for qualifying neighborhoods.  

Remember to always follow these 3 rules:

1. Invest for Cash Flow

2. Secure long term debt

3. Have plenty of cash reserves

Always enter every deal with 6 months of reserves, it's just good business practice.  In addition: $250-$300 per unit per year should be allocated to fund your reserve account-look at it as an additional expense.  

Local banks are always going to question why you are located far from your properties. I would suggest putting the 4 Duplexes under one commercial loan and going through a good commercial mortgage broker.  You are going to get 30 year amortization, a much more competitive rate, and you won't have to answer questions about why your living so far away from your properties without having to do any of the work that comes with securing a new loan.  If you need a great Commercial Mortgage Broker who I have used many times, give me a shout!  Good Luck!

Tours and showings are down due to this climate however the individuals who are taking the time to tour a property are serious about renting and are typically only touring 1-2 properties before deciding vs. 7-10 properties pre-covid.  Facebook Marketplace is also working very well right now which you might be able to use to your advantage.  Bottom line- yes the number of people looking to move right now is down but the ones who are looking happen to really need a place.