All Forum Posts by: Calvin Watkins

I can piggyback off of the above replies and also throw out that for straight commercial properties, Columbus is very investor friendly in terms of getting anchor companies to sign leases with incentives to bring jobs. If you have a renter or company lined up that needs space you can negotiate with the city or smaller jurisdictions to incentivize the move. 

Columbus historically resists recession in terms of population growth so for companies trying to sell goods or house office space there is always a demand. I know also with the recent work from home switch a lot of places are going through, large companies are not needing as much office space meaning the owner of the property will likely have vacancies coming up. This lends the opportunity to new investors to come in during a time of lower cashflows and offer on a property that should be cheaper as the CAP Rate is not as great in the short term.

I hope this helps!

Hey Garret!

I am actually in the Ohio market looking for apartment complexes as well. I have noticed that in the Columbus area specifically that it is best to look for C+ or B neighborhoods for the apartments. I would suggest if you are looking in the Columbus area to look at recent development in terms of new expansion of business or job growth. For example Columbus Children's Hospital is expanding so areas like Southern Orchards should be experiencing some good appreciation here soon as it is next to a high value area (German Village) and would be great housing for employees working at the hospital. 

Though this is a pretty specific example, things of this nature are good to research to plan what areas will likely have rental rate growth which would lead to a more valuable apartment complex.

I hope this helps!

I think this would depend greatly on the type of location you have and the tenant type it would attract. 

If you are in an apartment type scenario a MTM to start seems like a great plan to weed out possible troublemakers. 

I rent SFMs with the standard 3x2 model or 4x2. This appeals more to starter families or friends who intend to go to school or have the same job for quite some time. With that being the case I like 2 year leases as it lowers turnover costs and you get really high quality tenants in your location for a good amount of time.

Side note all of my units are "tenant proofed" with vinyl planking and tile. With the depreciation on those types of upgrades I felt it better to go with longer term leases that also allow me to update some stuff during the tenant's stay. I just replaced a roof on one while they were there and will likely get it repainted (exterior) as well. This allows them to see that you are working to make the place better while they are there which I feel increases tenant retention.

I hope this helps!

Currently for my scaling I am using a HELOC on one property to cover the costs of another property. This is similar to the cash out refinance but typically leaves me with an extra chunk to use to buy more properties pay back unrelated loans that have higher interest. I do a lot of the remodel myself so the equity chunk at the end is very large so that might not work from an out of state type style.

The first Renovation after opening the HELOC allowed all the reno to be paid and the next home to be purchased. After all that there was about 15k left that I had access to to pay down loans or close on another location. This is great for scaling in my experience but the cash out refinance could still be better depending on your situation.

I hope this helps!

Hey Benjamin!

I would suggest if you are looking to help out your girlfriend with her finances to take an approach like the airline videos tell you incase of loss of cabin pressure. Always secure your O2 mask first before helping others. As of right now you are not combined finances so helping her pay debts down is not the primary focus. Make sure that you are investing and growing your portfolio before tackling anything that could slow your growth. 

She is willing to live with you in a trailer and from my interpretation that means she is in it for the long haul. Make sure you discuss it with her and try and explain it according to her DiSC profile. In the long run growing a portfolio makes the most sense vs paying student debt as the interest is so small vs income generation from rentals. Also after she is finished with her degree you will likely have enough passive income from rentals to cover the payments and then some vs paying all you can now and still having a payment each month.

Hope this helped!

Hey Brent!

I am actually an investor in the south west side of Columbus. There are great little pockets in the area that have huge potential due to their unique local governments. I currently invest in the Valleyview and Northern Hilltop areas. These might not be considered the B neighborhoods you are mentioning but I would say Southern Orchards and Victorian Village would be closer to what you are looking for. 

The areas I focus on look more toward cash flow and mid term appreciation over a term of about 5 years. I have lucked out with the recent market hype and actually have received a lot of appreciation within a year. I would suggest looking for locations that have extra benefits that you as an investor doesn't actually control. Examples are newly paved roads, local school levies passing, and increased amounts of property taxes in recent years. Though most of these are bad for cash flow they typically translate to more appreciation of the property. 

I hope this helps!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $156,000
Cash invested: $25,000

Currently a Live in Flip so no Cashflow at the moment but should yield about $500 after renovations are complete.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Bank Financed

How did you add value to the deal?

Renovating 2 bathrooms
Renovating a Living Room
Renovating a Kitchen

Lessons learned? Challenges?

Seller had creative financing to start from multiple state agencies so closing took closer to 2.5 months.

So I have had possibly a great idea and want to see what everyone thinks. I would urge tax professionals/ asset managers/ lawyers to respond to this is possible.

I am newer to real estate investing and currently have two homes under my ownership. Both were/are live in flips that get reappraised around October once the flips are done and the market has received all the data it needs to value them. House 1 was a complete gut and also my first home ever. I purchased it under a 5 year ARM loan back in 2019 as it had a preferable rate at the time. I then added a HELOC after the flip to purchase house 2 with no/low money down. Currently the rent covers the payments on House 1 and it is close to break even from a tax perspective.

House 2 was a significantly larger and more luxurious home that was purchased with plenty of room to upgrade and on a 30 year fixed mortgage. As the work is completed the return on the sale would be about $30,000-$40,000. With this being the case I intended to leverage that in to a new property and continue my expansion. 

Instead of doing a 1031 exchange, could I in theory:

1. Open a HELOC on Home 2

2. Use that HELOC to pay down Home 1

3. Sell Home 2 to cover both the Loans on the home

4. Utilize the now open equity in Home 1 to leverage a new property.

If I am thinking of this correctly wouldn't opening the HELOC on home 2 lower the tax liability on the sale of the home? It wouldn't mean a ton in savings but just wanted to know if this is a way to lower tax implications from live in flips that last less than a year.

I can confirm Columbus, OH can for sure yield 1% rent and depending on the house size and whether you are willing to put some light rehab on it you can even get up to 2.5%. My first home I bought here was for 70k and I went over budget on the rehab so all in I was 105k but it rents for $1,250. I am currently updating a 4/2 that was purchased for 156k which is a little over what you had stated but with about 20k in renovation it will rent for $2,000 - $2,200 based on area comps.

Hey Aakash!

Normally the state will have grants to assist with closing costs for Owner Occupied homes. They come with terms such as required living in the home for a certain amount of time but if you break those terms you just have to pay back the money with a small fee. I have never used one of these but the person I bought my second home from had that scenario occur and realistically you could use it for live in flips early on to help build up cash reserves.

I hope this helps!