All Forum Posts by: Cole Doyon

As I'm sure you know, areas in the mid-west tend to cash flow well but appreciate poorly, that being said, the cash on cash return seems fantastic and can help you start to build a bigger portfolio.

As other members have pointed out, the desirability of resale (exit strategy) is always something to consider. Is it close by shopping, parks, a noisy street, etc. Make sure to take the long term view when considering the purchase.

Do you live in the area? Do you know it well? You put in their 10% for managment so I'm wondering if you are investing out of state?

@Cole Doyon

I totally don't understand the current tax bill on your property:

Your sellers paid $94,900 in 2021, and you are paying $125,000 in 2023.  I don't know how often your county reassesses their taxes, but it looks like to me your taxes are still based on the previous seller's price of $40,000 - this is totally a guess - but they seem way too low for $125,000.  

Just for fun, I put your numbers into the county's tax estimator in the correct district for your property and used your sales price as the 'market value.  I don't know if that is the right way to use the tool... but this is what it returns:

Whenever this resets, your taxes could go from $900 to $2,800.  I know in Florida this happens the year after the sale.  But I've heard in some areas it is every 2-3 years.  So if they did reset to what is shown you could be looking at more like $230/month in taxes, versus $75.  So I would maybe check up on that... even if it is just an anonymous call to the tax collector's office.

In addition, it looks like you have insurance listed at $3 / month?  Pretty sure that needs to be updated. 

All the best!

Randy

Hey Cole! I lived in Akron for 10 months and I think the estimated rents you are projecting for the duplex are a little high. $1,275 is a little steep for most residents of Akron, especially in the southwest area versus somewhere more favorable like the town of Ellet due to less crime. I think the rest of your variables are conservative. With this being said I think money can be made in Akron as it is a cheaper market. The issue is with cheaper markets comes more dangerous tenants. I think 900-1150 is a more favorable rent amount. A ton of cash flowing properties in Akron exist but majority are in class D or lower class C neighborhoods. I would just be careful of what specific area of Akron you are investing in. Personally if I were to invest I would go closer to the university and rent out rooms for students. Good luck with your future investing!

Interest rate seemed a bit low at only 6%. Have you spoke with a lender yet in your area to go through pre-qualifications and get an idea on what loan terms would be? I would imagine rate to be closer to 7%. But yeah, considering that and the adjustment to home insurance, should still be a cash flower. 

As Nathan pointed out too, this is not an area or home I'd anticipate to do great on the growth and appreciation side, but if the cashflow is your primary consideration, then looks like it can be solid!

I'd verify rents in the area as well for similar units in that bed/bath count and square footage. Just a quick zillow look up could work great for confirmation. You could also get an idea of demand by looking at the days listed and contacts/applications received. Not familiar with the area but 2500 does sound high assuming 1500 square feet between the 3 units. 

If you are good buying a house built in 1900, go for it. I do not see this appreciating well to be honest. It is super old, so depending on how long you hold onto it, could get very difficult to sell. That being said, you only had insurance at $3.00