All Forum Posts by: Aaron Smith

@Kevin Noesner, When you say east Franklinton, do you mean east of 315?

It seems like to me the areas that are trending higher are like you said Olde Towne East, Franklin Park area, the streets immediately bordering Bryden Rd.  What about north of Broad St and close to 71 to the east (King-Lincoln Bronzeville).

@Peter Lohmann, lets dig a little deeper.  You're a property manager, so I'm definitely interested in your thoughts.  The property is at 2884 Perdue Ave, Columbus OH 43224.  That's north Linden.  Given the area, what do you think the vacancy rate (including evictions and increased turnover) should be.  I assumed 10%.  What do you think the maintenance assumption and property management should be.  I assumed 45% and 12% respectively for a total of 57%.

Another issue with D areas is finding good PMs to manage them.  I've talked with several PMs in Columbus who say they will not manage properties in many of the D areas.  It makes sense, its a lot more work for less money than managing properties in other areas.  In your opinion, is it realistic to find a good PM who will accept managing in an area like this and do a good job.

@Grant Patmon Which areas in Hilltop do you feel are gentrifying?  There is a city initiative which is trying to revitalize select areas.  Look at this: https://www.columbus.gov/development/economic-deve...

What is your feeling about the areas on the map?  I know the are building a new library on Parsons:

http://www.columbuslibrary.org/buildings/parsons

But, just looking on google maps, theres a lot of pawn shops and dollar stores.

@Neil Evangelista Yes, the neighborhood is really my only reservation.  I agree, the number are quite nice.  You are very correct, I will contact some PM's and RE agents.  Thanks for the advice!

@Brent Coombs Wow you have a lot of posts.  I think you made a good point, D areas are where many good deals are located.  As long as its not a D- area with where all the tenants are dealing drugs and what not. 

@William Carroll I think this ties back into what Neil said, I need to talk with local PMs/RE agents to verify what I believe to be market rent (I just looked on craigslist and padmapper and took an average) is indeed market rent. 10% vacancy in a D neighborhood may indeed be too low, another great question for a local PM.  Fortunately its not in Heroin Alley, haha.

But I just realized that would ruin your plan to use that 18th unit.

Keep in mind electric baseboard heating is one of the most expensive heating systems in terms of energy costs.  Granted, this cost will be passed on to the tenant, however, it may effect how much they are willing to pay for rent if they know the electricity bill will be high in the winter.  Low temperature hot water baseboards (140F supply) with a condensing boiler and split systems for A/C would probably be the best bet for balancing having the tenant pay for some utilities and not having their bill be super high.  I do energy audits for my job :)

I think you could also bill back the tenants for the gas through a company.  Like http://www.greatamericanutility.com/

Not sure if they are any good.

Columbus, Oh

Hi there BPers,

I have a deal in a D area.  Mistake #1 right?  However, I think the property is selling a very nice discount. The rents maybe 50-100 under market.  Details:

$175k, 8 units, built 1966, $450 each unit rent

assume 10% vacancy, 55% expenses, 4% interest rate, 25% down.

Before raising the rents (basecase), I get 1.85% monthly rent to purchase price (2% rule)

2.33 debt coverage ratio, 10 CAP, 21% cash on cash.

All in all, not too bad.  I'm unaware of the condition inside the units (outside looks good) and what would take them to get up to market rents, but the numbers look good enough to make an offer.  I figure, despite it being in a D area, if I can create value and raise rents to market, it could be a good investment.  However, selling may be the issue, because of the area.  What does everyone think?

I'm compiled a list of neighborhoods in Columbus which I've classified with what I think is A,B,C,D areas. I'm curious what the average CAP rates are for multifamily properties in these areas too. That's next on my list to find out. Anyway, I'd appreciate anyone's input on if they agree/disagree with these classifications and what average CAP rates are prevalent in A,B,C, and D areas. Thanks!

@Omar Merced Forgot the mention