What criteria is in your buy box

Question

Hi all!Just curious to see what criteria you have when analyzing a potential rental property.Thank you,Bianca

Jeremy H. · Answer

Buy box...First I narrow down the type of property, the size, the location etc. For me location comes first - I can change almost everything about a property other than the location (this will dictate the school, crime etc). After that I must have 2 bathrooms - one bathroom makes the property hard to rent and later sell. Type - I'm open to - 1-4 units, SFH - all okNow we've got the type narrowed down and need to make the numbers work. For me on a SFH, after all expenses are paid (PITI, PM fees, vacancy, repairs/maintenance/cap Ex) I want to make $150 per door. For MFH I want $100 per door. Now that the cashflow is settled I look at ROI - this depends based on the property and location. For an awesome SFH in a great area I'll do 7% CoC ROI, for a MFH I'm looking at a minimum of 15%. On top of that I need equity capture at the buy. I'll go up to 85% ARV (after all expenses are paid) on a great property in a great location. Mediocre location I'm looking at being all in for 75% ARV (this is again after all rehab expenses are paid). So there's really three things I'm looking at to meet my criteria - cashflow, CoC ROI and equity capture at the buy Here lately I've been hovering the 82-85% ARV mark on my SFHs after the rehab - we're still dealing with high prices and now high rates. Makes it a little more difficult that it has previously been. I will likely be taking a year or so break after this next one just to let everything get settled. I've done 5 properties in the last year and a half and I'm just burnt out

Remington Lyman · Answer

It has gotten better over time. You will learn who you like and dislike working with. It will not be perfect in the beginning.I buy wherever there is a deal tbh. I prefer A and B class areas but I care less positive cash flow than others

Evan Hopple · Answer

@Bianca Rodrigues Hilltop, Linden, Franklinton, Whitehall, Hungarian/Vassor Village, Reeb-Hosack, Lincoln Village are the best cash flowing neighborhoods in Columbus. We are seeing appreciation across the whole city

Robert Ellis · Answer

Hey there, fellow real estate enthusiast! When it comes to real estate investing in Columbus, Ohio, here's a quick tip from your friends at Pink Construction: Pay close attention to the purchase price per unit and per bedroom. In the Columbus market, you can expect a 2-bedroom unit to rent for around $800, while a 3-bedroom might fetch about $1,200, and so on. To keep your investment safe, aim to keep your cost per unit under $150,000. This includes both the purchase price and any renovation expenses. But here's the kicker: Consider multi-unit properties, like 4-unit buildings. They often offer cost advantages and can boost your rental income. In a nutshell, when hunting for Columbus real estate deals, don't forget the "per unit" and "per bedroom" metrics. Keep it conservative, Rob, and you'll be on your way to a profitable investment. Happy investing! Best regards, Rob Pink Construction

Bianca Rodrigues · Answer

How has your experience been investing out of state and building a team to help with property management or repairs?Is there a specific neighborhood in Columbus that you feel has done better in terms of cash flow/appreciation?

Bianca Rodrigues · Answer

Really appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense? I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets.

Alfath Ahmed · Answer

I look more into buying in areas where there is economic growth. I personally am buying in areas like Franklinton, North Linden, North Hilltop, Driving Park, King-Lincoln. If i can get the property under-valued then I will usually buy it. I can ride the appreciation wave. I use different strategies for different areas.

Steve K. · Answer

Location, location, location. That's about it. When I first got started I had a long list for my buy box, now it's boiled down to location and value compared to that of the surrounding properties.

Mike Dymski · Answer

20-25+% IRR using a 5-year period for direct owned real estate. Otherwise, it's easier to invest passively to get IRRs in the teens.

Michael Smythe · Answer

SFR or MF?