All Forum Posts by: Jacob Seim

Hello community. 

I'm getting more and more comfortable running property analysis' using the BiggerPockets Rental Property Calculator. My wife and I plan to buy a duplex/triples this Spring and house hack on the East side of Cincinnati. I'm running the numbers as if I'm not living there. 

What are typical fixed landlord-paid expenses and their average cost in Cincinnati, OH? I can get actuals on insurance and property taxes. I'm plugging in $40/month for lawn care. Snow will be taken care of by tenants. I'd like to put all utilities on the tenants (electric, water, sewer, garbage) but this might depend on how the house is metered. 

Anything I'm overlooking and/or what do you include on all property calculations? Please exclude all variable landlord-paid expenses (i.e. vacancy, cap ex, repairs, management). 

@Erik W. when you say, "carry back," do you mean seller financing?

@Alan Grobmeier I'll take all the advise I can get from people who have been through this journey before. "You don't know what you don't know" is wise advise. I'm bound to make mistakes. Hopefully, I can learn quickly and move forward. Thanks for contributing! 

@Darrin Carey Thank you for the advise. I'll do some more research into lending as I was unaware of these additional 10+ options through private lending. Hope to see you at a future REIA event.

@Scott Mac You're right. Lot's of variables! However, I am one of those people who like to set 1 year, 5 year, and 10 year goals. Wouldn't say I'm on that "The 10x Rule" kool-aid but I like to set lofty goals to push myself. It's worked out well so far in my career and personal finances. 

@Tom Shallcross Thanks for the advise, I plan to incorporate your ideas into my goal setting. Goals need to be S.M.A.R.T. and you highlighted the difficulty in measuring my goals. Your process breaks it down into smaller pieces that can be measured. Smaller tasks are also easier to accomplish and move the entire process forward without getting burned out or overwhelmed. 

@Matthew Paul Thanks for the response and tips! I agree, family always comes first. My only fear of buying the SFH now is lifestyle inflation and the possibility of getting distracted or off track by life events. As for a back up fund, my wife and I keep a 6 month emergency fund which will be adjusted and increased with the addition of children and properties. I'd like to always have a 6-month emergency fund for every expense in my life, including rental property PITI.

@Ryan Mainwaring

• How do plan to find the deals? - First property (house hack) off MLS with realtor. I'm analyzing and finding a number of move in ready properties that cash flow right now. Properties after that I plan on building a relationship with a great realtor, participating in a local real estate club, and finally reaching out to current multifamily owners in my target neighborhoods through a number of means (calling, driving/walking for dollars, direct mail).
• How are you funding the deals? - First property (house hack) with cash saved. I have enough cash to buy a second which is where I'd like to start learning the BRRRR strategy so I can get back some (or all) of that cash for the 3rd property and so on.
• Who is going to do the rehabs? - My brother in law owns an interior remodeling business south of Dayton that is doing very well. I plan on using him for kitchen, bath, flooring, and painting. He is also a roofer for his day job day and is capable of that trade. I'm a construction project manager by day so I'm comfortable managing any other subs that might be necessary (plumbing, electric, HVAC, etc.) and overseeing the process. 

Hello Everyone,

My wife and I are expecting a baby in January and after months of debate have decided to leave beautiful Denver, CO and move back to Cincinnati, Ohio (Go Bearcats!) in Spring 2020. We want our child (and future children) to grow up with family constantly in their lives. 

We're savvy savers and have been on the Dave Ramsey train for a couple of years. We lived in Southern California for 2-years and now Denver for 2-years and have gotten to the point where we're saving 60% of our take home pay in cash for a 20% conventional loan down payment while putting another 15% towards investments (Roth's, 401k's, HSA, etc). We're also 100% debt free and have 800+ credit scores at 29 years old. The "Total Money Makeover" does work if you need bad debt help, fyi. 

I've always wanted to become a real estate investor (buying long term multifamily properties) but I typically move every year or so and have lived in Chicago, Hoboken, LA, and now Denver. Home prices were always expensive in these locations and I never knew the areas well. These factors coupled with a fear of long distance ownership has put my dreams on the back burner for a number of years. These are excuses for a lot of people on this forum but everyone has their level of risk tolerance. Mine's mid to low.

Moving back to Ohio has re-fueled by dream to invest in real estate. We know the areas well and my wife and I have put ourselves into a strong financial position where we can afford two properties right off the bat with conventional loans. Homes are CHEAP in the Midwest compared to what we've grown accustomed to out West and had been saving for. I've also been reading, learning, analyzing properties over the years while I've been too afraid to take to plunge. 

I'm in the process of establishing my 5-year real estate investing plan (goals). I've listed my steps and would love to hear input on tips, tricks, and advise from people familiar with the Cincinnati area or this style of investing. Or, if you could put yourself in my shoes and do it all over again, how would you structure your first 5-years?

1. Year 1 (Spring 2020): House hack a duplex in an up-and-coming B neighborhood on the East side of town (Ex. Norwood, Pleasant Ridge, Madisonville). I'm keeping an eye on A neighborhoods but they have to cash flow (Ex. Oakley, Hyde Park, Mt. Lookout). 
   1. The unit we intend on living in needs to be move in ready or require minor cosmetic upgrades only. My wife is graciously willing to house hack but has set limits on the living conditions and location. No live in rehab's on this one. 
   2. The unit we live in needs to be 2 bed, 1 bath minimum which excludes a lot of 1 & 1 quadplex properties. I think finding a property with a 3 bed, 2 bath unit would allow us to house hack longer without bursting at the seams and wanting to move out early. Thoughts?
   3. Learn good property management skills. 
2. Year 2: Buy 4 units. Begin learning the BRRRR strategy.
3. Year 3: Buy 6 units. Utilize BRRRR strategy.
4. Year 4: Buy 8 units. Utilize BRRRR strategy.
5. Year 5: Buy 10 units. Utilize BRRRR strategy.
   Move out of our house hacked property and buy our "Forever Home" near good schools and our 8-5 jobs. 
   1. Not sure if I should save every month for 5-years for the down payment on this forever home or use that money to buy more rentals over the 5-year span (insert opportunity cost debate). This means I would have to get creative when the time comes to finance the down payment on this house. Thoughts? Cash out refi, use funds pulled from last BRRRR, etc.? I'm a 20% down kind of guy.
   2. Assuming my number of units per property average is around 3, this would equate to 10 total properties (30 units) in 5-years and put me at the limits of conventional loans and portfolio lending. 

My buying criteria (First 5-years): 

• 1. 2-4 unit multi-family properties. 
• 2. B- or greater neighborhoods. 
• 3. Cash flow >$100 per unit per month. 
• 4. Cash on Cash ROI >10%.
• 5. Manage myself (Outsource mowing).
• 6. 20% down, 30-year conventional loans.
  • a. 3 properties under conventional loans through a broker. Saving that 4th loan for my forever home just in case. Would like to utilize a broker and lock in the lowest 30-year rate I can at that time while having access to the big national banks. 
  • b. Find and use a portfolio lender for the remaining 6 properties. This caps me at 10 loans under conventional financing. 

After 5-years, I'd like to graduate to larger commercial units. I'm a construction project manager by day and have learned that managing ten $100,000 jobs is WAY more work than managing than one $1,000,000 job. I'd like to keep growing my portfolio to the point where my cash flow makes more than my salary so I can quit my day job (before I turn 40) and focus on investing full time. This is my 10-year goal. 

Thanks for reading to the end! I feel like I just wrote a book. 

- Jake

Great advice from Jean.

In addition, there are sights such as loopnet.com which is geared towards multi-family and commercial properties so you don't get all of the single family homes in your search.

In addition to Zillow (Which is my favorite), look into Redfin.com and Realtor.com. All four of these sights have apps as well.