Canadian Wanting To Invest In The US Market, Is Ohio The Right Fit?

Question

Hey everyone, would value your opinions as we are working towards building a real estate portfolio in the US.  As much as we would love to invest in the warmer States it seems as if the MidWest is the place with the best returns.

What are your thoughts between Cincinnati vs Columbus Ohio?  We would prefer to jump into the market with a duplex, triplex or quad as our first purchase.  More doors, one roof, easier to maintain. We live in Southwestern Ontario and currently it's a 6 hour drive to Columbus. We are looking to eventually relocate to the States so would like to start building our portfolio in a State that has consistent appreciation with room for rents to increase going forward.  After listening to many podcasts with Henry Washington it seems like the MidWest has the best performance overall.

Would love to find some seller financing as we would like to build our portfolio as quickly as we can.  On a side note, my husband is a contractor and I am a licensed realtor in Ontario.  I've owned long term, short term and commercial (industrial) properties in the past, but never anything out of Province/State.

Thanks so much! This is such a great community and we value all the comments!

Melissa

Hai Loc · Answer

Columbus better then Cincy

I watched Columbus grow from 2014 onward. Construction on the 71 by the 270 in Grove City.. Owned trailer parks for almost a decade

Nicholas L. · Answer

@Melissa Vass Scott

hello - here are some miscellaneous reactions and questions for you

"it seems as if the MidWest is the place with the best returns"

--well, there are investors succeeding and failing in every state in the US.  the midwest has lower price points than other areas of the US, sure, but it also comes with its own challenges - for example, very old housing stock, lots of deferred maintenance, and tremendous demand for the best properties.

"We are looking to eventually relocate to the States"

--that's great, a lot of people want to invest remotely in a totally random market and never go to it.  If you're going to start in a market you're eventually going to live in, I think that's a stronger case for that market.

"so would like to start building our portfolio in a State that has consistent appreciation with room for rents to increase going forward."

yes, that's what everyone wants =) appreciation is tough to predict.

"Would love to find some seller financing as we would like to build our portfolio as quickly as we can."

--I would agree that this market has opportunities for seller finance as a record number of properties in the US are paid off.  with that said, I don't know that seller finance will let you grow more quickly.  seller finance opportunities are very, very difficult to find.

hope this helps - happy to dialogue further

Jeffrey Farkas · Answer

@Sam McCormack

Sam, it would be great to hear your view of Cincinnati. Are you around to discuss sometime this weekend?

Jeff

Melissa Vass Scott · Answer

Hi Jaycee,

We don't meet any of the three criteria you had mentioned. As I said earlier, this is strictly for investment purposes.

The property does not have to be turnkey, if there is room for improvement that's of no concern as we both have the skill set to invest in whatever upgrades are required. Always happy to increase appreciation in an investment property

Jaycee Greene · Answer

Got it. What I was getting at is that even investing "out of state", let alone out of the country, is more difficult when you don't have any personal connections and even more difficult with your first property. You'll really need to screen your property manager/contractors.

Evan Hopple · Answer

@Melissa Vass ScottI’ve lived in both places, and they’re fun places to live with a lot to offer. Cincinnati has more history and an established feel, while Columbus is growing fast and has a lot of energy. Between the two, the real estate pricing is similar, but the investment landscape is very different. Cincinnati is one of Ohio’s oldest cities, and its economy is well-diversified, with five Fortune 500 companies headquartered in the city (Kroger and Procter & Gamble are the top 2). The area is relatively stable, and the housing market tends to be less volatile. Columbus has the largest company in the state, Cardinal Health. Over the past decade, Columbus has attracted substantial investment from tech giants like Intel, Google, Amazon, and Facebook, which have collectively committed over $50 billion to developing data centers and semiconductor manufacturing facilities in the area. These investments in the area are expected to create tens of thousands of new direct and indirect jobs and further accelerate population growth and housing demand. You won’t find many seller-financing deals here, so if you're looking to scale quickly, your next best option is the BRRRR method—using cash or hard money to acquire properties and DSCR loans to refinance into.

Drew Sygit · Answer

@Melissa Vass Scott The Midwest is doing better than most of the country.

Detroit, Cleveland, Indianapolis and others.

What criteria did you use to narrow your cities down to Cincinnati & Columbus?

Jimmy Lieu · Answer

Yessir, Columbus is on fire right now! If you drive through Columbus, you see construction cranes and development happening EVERYWHERE!!!

Eric Martin · Answer

Hey Melissa, fellow Southern-Ontario investor here. I've been speculating the markets in the Midwest for some time now and recently decided to make a post on BP to attain more insights from people who live & invest in these markets. It seems many of us living in high price-rent areas are intrigued by the potential cashflow opportunities in the Midwest. One thing to take into consideration would be the overhead costs of being a cross-border investor, such as entity setup, property management, higher lending rates and tax filing should you choose to have a CPA. As Jimmy previously mentioned Columbus has strong macroeconomic factors driving appreciation. Coupling that with the abundance of properties in the city that meet the 1% rule, it makes sense why Canadians are redirecting their investment strategy across the border. I would love to connect and help each other strategize as we each make our entry-point into the Ohio markets.

Sam McCormack · Answer

Hey Melissa, would love to talk to you about Cincinnati! I'm not super educated on Columbus, so I would let a Columbus agent tell you about their market and I will tell you about this one, and you can make your choice, shooting a message now!

Canadian Wanting To Invest In The US Market, Is Ohio The Right Fit?

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