Searching for our first multifamily property: mid-west or south?

Question

Happy new year BP family! My wife and I are searching for our first MFP. We currently live in Central VA but are interested in the south and midwest region primarily for cashflow as that seems to be what the best strategy there, but appreciation would a plus as well. We have been looking online around Columbus OH and surrounding regions. We've been reading blogs, articles, posts for idea locations to settle on. We once owned two in Montgomery, AL, but recently sold one because the market presented a great opportunity. Any suggestions would be appreciated as well as any advise or considerations we may be overlooking because of our lack multifamily experience.

We're interested in 2-4 units however a commercial 5-plex at a great deal would be considered. We have only owned SFP in the past and are now ready to scale up. Long distance investing is no problem granted we can build a solid team. BP family, we have had success with your help before, so hoping you all have the time to advise again!

I will do my best to response to each person in reasonable time. Thanks in advance for any help.

Larry and Keynosha

Ruckersville, VA

Michael Swan · Answer

Hi @Larry Smith

I invest in Lake County Ohio presently.  I agree that you need a great team to do this out of State investing thing.  Feel free to reach out to me and message me.  I am an investor only, not a commercial or residential RE agent.

I love to talk shop and told my story on BP Podcast 238 and in their wealth magazine too about a year ago. I just retired from my day job this past spring of 2021. Financially free and working on my 9 apartment complexes, managing the Property Managers, working on more acquisitions too. That goes for anyone out here on BP. I am here to help and advise.

Onward and upward BP nation!!

Swanny

BP Guest Podcast 238

Larry Smith · Answer

@Remington Lyman Thanks for the article suggestion, it was a great read and refresher, it has been a while since I completed David Greene's Long-Distance Real Estate Investing.

@Michael Swan Michael, I started listening to your interview, but have not finished it. However, man you have a interesting story and investing career! If it is not a bother, I may reach out at through BP as get I closer to settling on a location. Thanks!

@Brandon Goldsmith I am working on crystal clear criteria right now along with my wife and reading Multi-family Millionaire on the side after work. Columbus does appear to be a solid move, thanks!

@Marc Rice Thanks Marc for taking the time to response! @Joshua Janus Thanks Joshua!

@Nicholas Misch I have not looked into Cleveland as much as Columbus, but I know your professional team I located there. I will however keep Cleveland on the reach list. Thanks!

@Karine Arditi I know what you mean on the PM front. My first PM on my properties in Alabama was horrible with late deposits, late responses, and limited explanation towards repairs plus contract that I should have read much better. However, with time and BP I found a better team (one company) that has taken great of my investments. So, take your time, interview thoroughly, check their references, and even visit them if you can. Same for the contractor, but don't reinvent your network, use the network of realtor and future PM. Good Luck!

@Cameron Braig I definitely like to Chattanooga suggestion as I have family there and understand the significant changes to downtown has when through over the last decade. My properties in Alabama are in Montgomery, however, I am familiar with Huntsville as well. Because the US Space Force considerations, a couple of television shows, and other government interest, Huntsville is hot and maybe too hot for me. I am active military which is way I know of Huntsville.

@Uri Gofman Thanks for the heads-up Uri, I keep that in mind.

Thank you all for your time, responses, and experience.

Remington Lyman · Answer

I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

https://www.biggerpockets.com/blog/core-four-real-estate-team

I invest locally in Columbus, Ohio

Cameron Braig · Answer

@Larry Smith

Columbus is certainly a growing market as private equity and institutional investment has flooded into the market, which has made it more competitive.

Tertiary markets in the south still provide good opportunities as the major metros continue to grow. Depending on your goals, Chattanooga, TN, Huntsville, AL, Birmingham, AL and Winston Salem, NC could all be worthwhile to look into. Best of luck getting started and breaking into a new market.

Brandon Goldsmith · Answer

Depending on your specific criteria for properties and area type, there are a lot of markets in Ohio that I would take a look into. Columbus is a solid start @Larry Smith

Karine Arditi · Answer

I have also checked out Columbus and the reason I couldn’t quite commit yet is because I haven’t been able to find a solid team.  I found a realtor but the PM was tough.  A lot of negative stories out there…same with the contractor.  I’m sure it’s possible and would be open to any recommendations, I just haven’t found it yet.

Marc Rice · Answer

I've had people from VA invest in Columbus and have great results. They bought cash flowing multi-family 2-4 units to start.

Joshua Janus · Answer

Columbus and Cleveland, Ohio are both great markets to find a 2-4 unit that cash flows with a hybrid mix of appreciation in addition depending on the area and neighborhood.

Nicholas Misch · Answer

Cleveland is an amazing place to find small cash flowing multi families.

Michael Swan · Answer

Sure @Larry Smith!!

Go for it!!  My pleasure!!

Swanny

Searching for our first multifamily property: mid-west or south?

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