A couple questions on Multi-family

[Bud Dwyer]

I've been looking in Ohio to invest since Phoenix seems to be priced beyond getting any Cash Flow at this point.  

I guess my first question is why is Multifamily so cheap out here, but the rents are comparable to Phoenix?  I see buildings for less than $100k, some even cheaper than $50k while the rents are around $500-600/month.  These prices are on 3-4 units buildings as well.  It seems you can get a fixer upper fourplex here for $15k if you really wanted to.

What are the average water/sewer/trash bills for 3-4 unit buildings out here?  I pay around $275/month for my fourplexes in Phoenix.  If it "Depends," can someone at least give me a range to work with.

I know about the lead based paint rule set to go into effect in a few months, and will be scrutinizing any properties for it.

Thank you

[Jonathan Twombly]

@Bud Dwyer, I can't say for certain because I don't know exactly where you are looking, but a possible explanation is population growth - Phoenix has it and most of Ohio (except for Columbus) doesn't.  Professional investors are wary of buying in areas where the population is not growing, and especially in areas where the population is shrinking, because over time that is going to make it harder and harder to fill your units.  So, cap rates rise (i.e., prices fall) to compensate.

Lack of population growth means lack of rent growth. Lack of rent growth means lack of NOI growth. It could even mean NOI shrinking over time if expenses rise but rents do not because there is no pressure on rents. NOI growth translates into rising asset value, and the opposite is true too - NOI shrinking would lead to asset prices dropping. So cap rates are high to compensate for this risk.