All Forum Posts by: Dave Poeppelmeier

@Leroy K. Williams if you're looking at Detroit or Toledo, you should enlist the help of a Property Manager. In Toledo, there's actually an ordinance that says you have to have a local representative, usually a PM or attorney, if you live outside of a certain radius of the city. Finding the right PM is unfortunately the most difficult part of investing from afar. But, the good news is that here in Toledo most PMs have their own contractors, leasing, etc so they do everything for you. I invest in Toledo as well, let me know if you have any particular questions.

@Nicolás Eduardo Larach León here is your problem: that book was written in 2015. 

2015 was a COMPLETELY different world where you could trip over 1% deals, many finding 2% deals easily. Just keep in mind when Real Estate books were written and the market conditions that existed at that time. 

With that being said, yes you can find 1% deals, but that's just back of the envelope math that says this property is worth looking into. I wouldn't use that as the end-all-be-all in your investment criteria. Best of luck to you. 

@Michael Goldberg, you should really find a title company that's local to where you want to purchase/sell a property. Just because a title company is in the same state doesn't mean procedures are universal. In Ohio, things work differently here in Toledo than they do in Cleveland/Akron or Dayton/Cincinnati. Local title companies know the local Realtors, lenders, customary way things are done, etc. Some of the worst deals in my career have been from having to use out of town Title companies. Best of luck to you. 

@Joshua Piche reading some of these posts, it sounds like it's the investor that's the problem, not the market. @Nicholas L., BTW, we in the Midwest take offense to having Baltimore lumped into us 😄. 

Anyway, in all seriousness, you simply have to do your due diligence when buying ANY property. House was built in 1943? That doesn't matter. Was it built in a quality neighborhood, or a cheap neighborhood? If it was built in a quality neighborhood, the bones are likely to be great. Lousy neighborhood... not so much. Sewer laterals? Yes, you need to check them out every time since they are clay pipe sections. I've had multiple collapsed lines discovered that the seller/residents didn't even know about because the toilets still worked. 

Turnkey company? Forget it. The turnkey companies, in my experience, put lipstick on a pig and call it a day. Pics look great online, then I walk through and point out everything that was cheaply done, and we move on. As Investors, we get paid to solve problems. Buying a property that's truly turnkey has had the problems solved for you, and the cashflow, if any, will reflect that. If you're going to purchase a property that needs renovation, you're in control and you can make sure things get done correctly instead of trusting someone else that does not have your interests in mind in any way. 

So, do your homework, trust your people on the ground, which is going to be your Realtor and PM company, and don't jump into Ohio or any Midwest market just because the prices are lower than California. Yes, you can make money here in cash flow, but it is going to take time. Unless you plan on being in a Midwest market for 5-10 years, don't play the cashflow game. It's not the 2010's where you can trip over properties that will cash flow well instantly. It may be coming... but it's not here yet. Best of luck to you!

Hi Ryan, unfortunately here's my take as an Investor and Realtor in Toledo: be very very careful. In the 12+ years I've been an investor, I have never had a wholesaler bring me anything viable, or that I would want one of my clients to own. With as much of a Seller's Market as Toledo is right now, especially in the Investor-grade properties (because of, well, Investors), if a property can't be marketed publicly right now, there is something REALLY wrong with it. But, if you want to play the D class property game and you're local, which it looks like you are, then go for it. Just be very wary, do your homework, and may the odds be ever in your favor. 

Hi Chris, great to hear that you're jumping in! I do Student Housing, and there's a lot to unpack in this post. Regarding Student Housing, everything is dependent on the housing culture at each school. What time of year does leasing happen? Do people rent by the room or in groups? 

Regarding the ideas you have for this particular house, find out what the city/state codes are for basement bedrooms. You typically need a full egress window (not a little basement window) to count as a bedroom. At 1000 sq ft, a 3/2 is still a smidge on the small side. If you start adding bedrooms in the basement, the common living areas start to get small for 4-6 people. 

Regarding the leases, again it depends on the housing culture, but I rent to groups. I know you here a lot on BP about getting more money renting by the room, but your headaches go up proportionally as well. Say you have 3 people renting a room. Now you have 3 leases meaning increased paperwork. What happens when one person stops paying? Yes, you can evict, but it will be a nightmare getting one 20 year old out of a house without the inevitable "this is my couch!" issues. Plus, trying to matchmake 3 strangers could go fine, or you could have big personality conflicts. IMO, it's not worth the little extra money you could make. With groups of students, they hold each other accountable for making their rent payments and not damaging the house (which I've never really had, knock on wood). 

Finally, being 45 minutes away isn't a deal killer, but be ready to listen to some podcasts and books when you're in the car 1.5 hours each time you have to go out there for something. It's fine at first, but it gets old. We ended up selling our first rental ever simply because it was 35 minutes away and I got tired of the drive. 

I hope this helps, and best of luck to you!

Investment Opportunity in Toledo's Historic Old West End! 

Now available: 4 updated multi-family buildings on one parcel featuring 14 fully renovated units!
Improvements include new roofs, updated heating systems, fresh exterior paint, and full unit renovations.
Currently offering a 9.62% CAP rate – an ideal addition to your real estate portfolio!

Prime Location:

• Minutes from Downtown Toledo

• Near St. Vincent's Hospital

• Quick and easy highway access

      Features include:

• Coin laundry

• Parking for 14 vehicles

• Beautiful stucco and wood exterior

• Updated mechanicals and full basements

Offered at: $850,000
Annual Net Operating Income: $81,763

Showings available after an accepted offer.
For more details, contact:
Dave Poeppelmeier, REALTOR®
Keller Williams Citywide
(419) 392-1792
[email protected]

I would add to this that college markets can be wildly different from one another. Here in Northwest Ohio, Bowling Green State University is a college town with very limited housing and very high demand, and getting into the market is an expensive (proportionally, this is Ohio after all) proposition. The University of Toledo is in central Toledo, and the Student Housing area per se is confined to 2 neighborhoods adjacent to campus. Anything past that, you could have Students rent but there's no premium on the rent for being walkable/bikeable to campus.

Be sure do your homework on when the leasing periods are for each school, local regulations (some college embrace Student Housing, others fight it), etc. Despite some extra hoops and hand on needs, I enjoy being in this niche. 

@Ethan Tomlinson yes, congratulations on taking the first steps!!! I agree, I wish my wife and I knew about house hacking back in the day, that would have made getting started much easier!

I would say your first step is going to be getting your financing figured out. I would find a lender in Idaho (stick with local lenders that know your market) that specialize in first time homebuyers. There are a ton of options out there (FHA, conventional, etc) depending on your situation. It also depends on your market. If things are cooling off for you, then you'll probably have more creative financing options (more, not tons) or flexible sellers. If you're still in a seller's market... good luck unfortunately. You just need to stay committed to your goal. If that means saving up 20-25% for a down payment on a conventional loan to get into a house, then so be it.

After that, then yes, find a recommended Realtor in the area THAT HAS INVESTMENT PROPERTIES OF THEIR OWN! I cannot stress that enough: any Realtor is going to say "Oh yeah, I work with investments!". News flash: they have no idea what they're doing. 

Once you get these 2 parts of your team figured out, you'll be well on your way for your first house hack. Best of luck to you!

Frank Acala with Accountable Pavement: 419-307-2262. He has put in 3 asphalt driveways for me and they have turned out great and I think he's very fairly priced. Great guy too! Hope that helps.