Buying and Selling Apartments in Ohio

[Tyler Gerhold]

Hey BP! Some partners and I are looking for some multifamily properties in the 5-10 unit range in the Dayton, OH area. 

Our strategy is to find poorly managed properties slightly under market value then go in, improve management, perform minor renovation such as exterior/interior painting, landscaping and other minor cosmetic repairs, increase rents to market value, minimize expenses as much as possible and then resell in a 1-3 year timeframe. 

I assume many people have done this and are trying to do it. If so, what have been some of your hardest obstacles to overcome? What are the biggest flaws in this strategy? What has worked best for you when implementing this? Is this a sound/profitable strategy? What were some of the things you learned after completing a couple of these deals? Where are you finding these properties? Brokers? Are you funding with traditional banks?

We are relatively new investors. We have only been in the game less than a year but between 3 of us, we have already accumulated 17 units.

Any advice on this would be much appreciated! Thank you for your time! 

-Tyler

[Brian Garrett]

This is a very common strategy known as value-add multifamily.

There are a lot of posts and examples that you can find and read about.

The biggest challenge is finding these value-add deals at a price that makes sense.

They are typically found through commercial brokers and by marketing directly to owners.

These are typically funded through commercial/portfolio lenders or agency debt on larger deals.

It's a great strategy to force appreciation by increasing NOI and capturing that equity gain once stabilized.