Long Distance BRRRR in Ohio
Martti EckertPro Member
Investor · Member since 2023 · 7 posts · 7 votesLong Distance BRRRR in Ohio
Most Popular Reply
Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votesHey Martti,
Doing BRRRRs out of state definitely adds another level of difficulty, but it can be done very successfully.
You'll want to work with a good agent so you can gain the right understanding of the market you're in and pull accurate comps while also getting access to exclusive deals and pull the comps. Then you'll need to find a high-quality contractor who can ensure your rehab is done properly.
I recommend doing BRRRRs in cities that have some sort of mix between appreciation and cash-flow!
Reafco - Samuel Diouf528 Reviews
22 Replies
- 1yAndrew PostellPro MemberLender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
@Martti Eckert what kind of questions do you have?
- Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes1y
Quote from @Martti Eckert:
Hi Bigger Pockets community -
I am interested in pursuing the BRRRR strategy in one of several Ohio markets this year. I understand that completing long distances BRRRRs is a different kind of animal, so I am hoping to glean insight from investors who have successfully gone down this path. It would be ideal to chat with investors operating in the Midwest, but I welcome anyone's perspective on BRRRing from a considerable distance (plane flight away).
Thanks!
Martti
Hi Martti, I've done BRRRRs in both Columbus and Cleveland, but I'm based in Columbus. Being out of state adds challenges, but the key is building a solid team. In my experience, a successful BRRRR typically comes down to two main things: finding a good deal and managing an efficient renovation. Your agent and contractor are crucial members of your CORE 4 in making this happen. A good deal won't matter if your contractor delays the timeline, eating into profits through holding costs. And if the deal itself isn't solid, no contractor can turn it into a win.
- 1yAlex BekezaBusiness MemberLender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
@Martti Eckert I live in Los Angeles and have done a handful of BRRRRs in Missouri so feel free to reach out with any lending related questions to pulling off BRRRRs in Ohio.
Investor Property Loan5306 Reviews - 1ySamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey Martti,
Doing BRRRRs out of state definitely adds another level of difficulty, but it can be done very successfully.
You'll want to work with a good agent so you can gain the right understanding of the market you're in and pull accurate comps while also getting access to exclusive deals and pull the comps. Then you'll need to find a high-quality contractor who can ensure your rehab is done properly.
I recommend doing BRRRRs in cities that have some sort of mix between appreciation and cash-flow!
Reafco - Samuel Diouf528 Reviews - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @Martti Eckert:
Hi Bigger Pockets community -
I am interested in pursuing the BRRRR strategy in one of several Ohio markets this year. I understand that completing long distances BRRRRs is a different kind of animal, so I am hoping to glean insight from investors who have successfully gone down this path. It would be ideal to chat with investors operating in the Midwest, but I welcome anyone's perspective on BRRRing from a considerable distance (plane flight away).
Thanks!
Martti
Holla!
- 1yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Question: assuming an ideal brrrr that has all investment extracted at the refinance, why would you choose a low cost market over a high cost market?
- value adds add more value in high cost markets. I recently added a half bathroom to existing footage in a unit that is valued over $1k/ft that the comps showed the half bathroom added ~$50k of value.
- not sure of your home market but i assume you are choosing ohio for its lower cost. Bullet 1 points to the folly of this thinking. Successful BRRRRs are challenging enough to do local to you. A remote brrrr is many times more challenging. I have done quite a few BRRRRs, but i would be hesitant to try a remote BRRRR.
- in this higher rate market, i find BRRRRs to be challenging because after a high LTV refinance the units have negative cash flow. Recognize there are challenges doing BRRRRs since the rate increases that have occurred in the last couple years.
- flipping is a job, stop flipping and stop making money. However, it does not result in a negative cash flow tenant situation.
good luck - Hong Kong · Member since 2024 · 161 posts · 57 votes1y
Quote from @Alex Bekeza:
@Martti Eckert I live in Los Angeles and have done a handful of BRRRRs in Missouri so feel free to reach out with any lending related questions to pulling off BRRRRs in Ohio.
I don't mean to hijack the thread, but is it ok to connect? I'm interested in talking to people who have experience in out-of-state investing, regardless of the strategy. Thanks.
- Hong Kong · Member since 2024 · 161 posts · 57 votes1y
Quote from @Su Pak:
Hi Martti, I've just completed my first BRRRR in Canton. I'd be happy to share my resources if you're interested. DM me. Good luck! :)
Is it still cash flowing after the refinance?
- 1yBrittany MinocchiBusiness MemberLender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
Hey Martti!
I talk to a LOT of out of state investors looking near my hometown in the Akron/Canton area, as well as places like Cleveland, Toledo, Dayton, Columbus and Cincinnati. If this is your first out of state deal, make sure to have a solid team in place. Finding a reliable contractor for the rehab portion and then a good property manager once it's rented seem to be the biggest issues for those who aren't local.
From the financing side of things - keep in mind that conventional cash out refinances require 12 months of seasoning in order to use the new appraised value. You can bypass the longer seasoning requirement with a debt service loan. OH is one of the states where lenders sometimes require that you buy out the prepayment penalty, which in turn will increase your rate and make it more difficult to cash flow. Contrary to what some say, this is NOT a state-wide requirement, it is lender dependent. Your LTV will also affect your rate. Debt service loans typically max out at 75% LTV for cash out refinances, but some lenders allow 80%. You will see a higher rate with that increased leverage. Just a few things worth considering.
If you have any questions, feel free to connect!
Brittany Minocchi - Barrett Financial Group, LLC522 Reviews - Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes1y
We mostly buy houses from out of state and are aware of it's challenges but many investors have done successfully, so it can be done. I recommend you go visit a few times to network with local investors or find an investor friendly agent so you can gain local market knowledge, find off market deals and for things such as showings, picture taking or getting accurate comps. Then you'll need to build a team of contractors to handle renovations and to help with things such as property inspections. It's a lot of work upfront but once the team and systems are established it gets easier and as you get better you can expand to another city.
Best of luck! - 1yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Martti Eckert how do you plan to find reputable contractors that won't take advantage of you when they find out you're OOS?
What are your plans to verify their work before paying them?
Solve these two challenges and you can do it!
Logical Property Management4.9453 Reviews - 1ySu PakPro MemberInvestor · Los Angeles, CA · Member since 2020 · 48 posts · 23 votes
Quote from @Zach Howard:
Quote from @Su Pak:
Hi Martti, I've just completed my first BRRRR in Canton. I'd be happy to share my resources if you're interested. DM me. Good luck! :)
Is it still cash flowing after the refinance?
Yes, it still cash flows. It would've cashed flowed more if I didn't run into my first shady contractor. Learned that lesson the hard way. His name is Dale Schenk. And I've been waiting to put him on blast in BP and tell my story for a while.
- 1yJeremy MelloulPro MemberReal Estate Agent · Columbus, OH · Member since 2022 · 83 posts · 83 votes
I'm based in Columbus and have been using the BRRRR strategy here in Ohio for a while, so I'm pretty familiar with the market. Doing long-distance BRRRRs can definitely be tricky, but the key is building a solid local team you can trust—property managers, contractors, and agents who really know the area make all the difference.
Ohio has a lot of great opportunities, but you’ve got to know which neighborhoods are worth it and which ones to steer clear of. Each market—whether it’s Cleveland, Cincinnati, or Columbus—has its own quirks, so digging into the local scene is huge.
If you’re serious about tackling Ohio, I’m happy to share what’s worked for me or help point you in the right direction. DM me if you want to deep dive a little more!
- Investor · Member since 2023 · 7 posts · 7 votes1y
Quote from @Andrew Postell:
@Martti Eckert what kind of questions do you have?
Hi everyone -
I want to thank you for your thoughtful and insightful responses. As a new member, I impressed and grateful to receive the information! In the coming days, I intend to reach out to a number of you offline.
I will also generally respond to Andrew's question about the questions I would like answered. (This is the tip of the iceberg; I would prefer to chat with members than fire lengthy messages back and forth.)
1. I am primarily concerned with completing renovations in a timely and satisfactory condition, so I foresee the selection of GC looming large in my project's success. How have you identified quality contractors and kept them on pace? Have you ever used a project manager (some might say white glove service) to ensure success?
2. Did you vet contractors in-person prior to hiring them to work on your projects?
3. As some of the responses have intimated, I have received mixed responses about undertaking BRRRs in the current higher interest marketplace. Based on my initial analysis, I get the sense that BRRRs are still quite viable in the three Cincinnati, Cleveland, and Columbus. Am I being overly optimistic, and if so, why?
Cheers,
Martti
- Hong Kong · Member since 2024 · 161 posts · 57 votes1y
Quote from @Su Pak:
Quote from @Zach Howard:
Quote from @Su Pak:
Hi Martti, I've just completed my first BRRRR in Canton. I'd be happy to share my resources if you're interested. DM me. Good luck! :)
Is it still cash flowing after the refinance?
Yes, it still cash flows. It would've cashed flowed more if I didn't run into my first shady contractor. Learned that lesson the hard way. His name is Dale Schenk. And I've been waiting to put him on blast in BP and tell my story for a while.
Tell your story - I think there's even a subsection of the BP forum called horror stories. Is it ok to connect with you (DM) to maybe discuss how you managed everything? I'm really trying to do something out-of-state, but really need to see how other people did it before possibly jumping in myself. Thanks.
- 1ySu PakPro MemberInvestor · Los Angeles, CA · Member since 2020 · 48 posts · 23 votes
Quote from @Zach Howard:
Quote from @Su Pak:
Quote from @Zach Howard:
Quote from @Su Pak:
Hi Martti, I've just completed my first BRRRR in Canton. I'd be happy to share my resources if you're interested. DM me. Good luck! :)
Is it still cash flowing after the refinance?
Yes, it still cash flows. It would've cashed flowed more if I didn't run into my first shady contractor. Learned that lesson the hard way. His name is Dale Schenk. And I've been waiting to put him on blast in BP and tell my story for a while.
Tell your story - I think there's even a subsection of the BP forum called horror stories. Is it ok to connect with you (DM) to maybe discuss how you managed everything? I'm really trying to do something out-of-state, but really need to see how other people did it before possibly jumping in myself. Thanks.
Thanks. That will probably be the best place to share the story.
Yes, feel free to DM.
- 1yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Martti Eckert here's the big issue that no one really talks about that you hopefully find helpful (this is copy & pasted):
-----------------------------------------------------------------------------------------------------------
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.
If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.
If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?
Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?
So, when investing in areas they don’t really know, investors should research the different property Class submarkets.
Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:
Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.
Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Logical Property Management4.9453 Reviews - 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Martti Eckert:
Quote from @Andrew Postell:
@Martti Eckert what kind of questions do you have?
Hi everyone -
I want to thank you for your thoughtful and insightful responses. As a new member, I impressed and grateful to receive the information! In the coming days, I intend to reach out to a number of you offline.
I will also generally respond to Andrew's question about the questions I would like answered. (This is the tip of the iceberg; I would prefer to chat with members than fire lengthy messages back and forth.)
1. I am primarily concerned with completing renovations in a timely and satisfactory condition, so I foresee the selection of GC looming large in my project's success. How have you identified quality contractors and kept them on pace? Have you ever used a project manager (some might say white glove service) to ensure success?
2. Did you vet contractors in-person prior to hiring them to work on your projects?
3. As some of the responses have intimated, I have received mixed responses about undertaking BRRRs in the current higher interest marketplace. Based on my initial analysis, I get the sense that BRRRs are still quite viable in the three Cincinnati, Cleveland, and Columbus. Am I being overly optimistic, and if so, why?
Cheers,
Martti
Hi Martti! As an investor, I've built a trusted network of 3-4 solid GCs over the years. Most came through referrals from other investors and realtors. When vetting contractors, check if they're licensed and insured, ask for at least 3 references and call them, and get detailed written estimates and timelines. For big BRRRR projects, hiring a project manager or having boots on the ground can be worth the investment to keep GCs on track and catch issues early.
I’ve had OOS clients who’ve been successful both ways—some met their GCs in person and others didn’t. If meeting them is important to you, absolutely try to make it happen before hiring. But if you’re going off a referral, just make sure it’s from someone you trust completely.
On whether BRRRs are still viable in Columbus - absolutely! Columbus has some solid fundamentals like job growth, population growth, and entry prices that still make sense compared to rents. Just be extra conservative with your ARV estimates and have a great team of contractors to keep rehab costs in check. The numbers can definitely still work here with the right deal and execution. Happy to connect and answer any other questions you may have.
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 1yLeroy K. WilliamsPro MemberProperty Manager · Southfield Mi · Member since 2018 · 182 posts · 171 votes
Hi Martti,
I happen to be someone that lives, eats and breathes in this area of Real Estate investing every day in Detroit MI. I believe there are a few unconventional approaches that work best for OOS investors looking to perform BRRRR in Mid- to lower income communities.
1. Yes, you need a team, however you can't just assemble people together and call it a team. There is a way to do it. From my experience the first team member to recruit will be a local Project Manager-someone who wants to help you long term as your eyes in the field and boots on the ground. Next you want to hire a realtor. Make sure you choose a realtor who is used to travelling into your target community and not just engaging properties from behind a phone/computer screen. Make sure your real estate agent isn't just about closing that one deal but understands the benefit of protecting you on each purchase to ensure that you keep buying because you are enjoying success.2. Don't hire a GC yourself. Let your Boots on the ground do it. You can oversee this aspect from the background but don't try to directly engage a GC from out of State without having someone tied to your success there to watch what's going on. The GC is a business person who doesn't care about your ARV, LTV, or your budget. They don't care when you try to explain all the future projects, they actually hate hearing that since it sounds like a scam, when an investor says, "Give me a good price and I will have a lot of work for you" it sends chills up their spines. Guys have heard that ad nauseum and its now a code word for "Do it cheap". If they are good, they don't have a problem finding work so doing your project at a deep discount makes no sense for them. That said, there are specific contractors who like working with investors since they can avoid the hassle of working on occupied homes. Finding these guys will require someone local or a lot of luck. Your project manager should know plenty of guys- delegate this to them
3. As it relates to hiring your Property Manager- Go to a local REIA meeting. During the networking session ask around and see who others are using. Don't hire the first company that presents a lot of sleek Razzle dazzle. Trust me on this. A little secret is that Property Management companies come in two basic varieties. They are either a combination of a Maintenance/Tenant Management business or Accounting/Real Estate sales/Tenant management service. The first type is more hands on, direct engagement with the tenant and the property, the other one is more hands off, and work at a distance. The Big Razzle Dazzle PM's are horrible when it comes to building your portfolio, they are better when it comes to managing an already performing large portfolio. Build up your portfolio with a professional landlord and then as your portfolio grows transfer the assets over to a larger PM firm for ongoing accounting and management.
Respectfully,Gandalf
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Martti Eckert in our opinion, you'll need to be really familiar with construction, including costs, or be able to find somoen on the ground you can REALLY trust (but still verify).
Logical Property Management4.9458 Reviews
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