All Forum Posts by: Jake Garrity

@Roland Cheek This duplex is in Norwood, near 562. I am also looking in Madisonville, Silverton, Colerian, and Bond Hill for my next one. 

@Ralph Patulot Hi Ralph, thanks man! 

I chose Cincinnati for a number of reasons. One, I think it is a great city to invest in, has an overall strong economy, and has a number of neighborhoods that are up and coming with old houses with potential, and potentially high ARVs relative to purchase price [like the one I invested in]. But frankly the main reason is that I am originally from Cincinnati, still have family there and most my friends live there, so I go back quite a bit as it is. Investing there just made sense. 

I have also invested in Dayton, Ohio, but the reason I will likely stay focused on Cincinnati is the good supply of houses that can be bought in the $60k range, invested in, and end up with an ARV in the $150k-$180k range. This gives enough buffer for a good BRRRR, even without factoring in appreciation as these older neighborhoods grow. So as you are looking for places to invest, Id recommend keeping the potential supply of your target properties, in your ideal neighborhoods, in mind.

I hope that helps. 

Hi @Kadeen E Lyons  Thanks! 

I found this deal on the MLS. I had spent months evaluating properties and making offers before finally getting this one. For my next deal I am looking at foreclosure auctions as well, now the I am more comfortable with the process, but this one came from the MLS.

As far as steps, I know the area I am investing in [Cincinnati] well. That would be the first step, make sure you identify the neighborhoods you want to target, and which ones to avoid. I then had a friend of mine who is a real estate agent create an MLS search for me based on my criteria, and I also created Zillow searches that fed emails to me, and I watched it everyday. I probably ran numbers on 50+ houses before getting this one.

When I found potential deals, I would first run some rough numbers, basically estimating repair costs and ARV and using the BRRRR formula to back in to see if the purchase price was close to the list to make it a potential deal. If things looked like it could work, I would then have her [my agent] go and walk the property and video for me. Then based on her walk through I would update my numbers and make an offer, or not. My offers were 100% cash, and 15 days to close. So as soon as an offer was accepted, I would book a flight to go walk through the house myself and make a final go/no-go decision.

For the next one, I will still be watching the MLS, but will also start looking at Foreclosure Auctions as well. Hope that helps!

Jake 

@Samson Hollmérus I chose to invest in Cincinnati as I grew up in the area and went to college there. Cincinnati is home, but I moved to Texas due to my job. So I know Cincinnati well, love the area, and also the homes there are low enough cost that I could do this BRRRR with cash I had saved.

@Ryan Friess for years in college I worked for a real estate investor in the same area where I am now investing. So once I got this deal, I reached back out to him and he referred my first GC. Based on his feedback, I knew he would at least be dependable [and he was]. I had a harder time with the subcontractors like I mentioned, but that was more trial and error. 

@Irwin Velez I found this property on the MLS. I had been looking and making offers for about 8 months before getting this deal. I financed the purchase and rehab with my own cash, which I have been saving over the past 5 years from my day job.

@Alex Keathley I ended up with $13,100 left in the deal after my refinance, partly because I needed to do a 70% cash out as opposed to 75% [my banks rule for dupexes]. COC return, after renting out the second unit, should be around 66% based on $8,700 cash flow [$725/month] / the $13,100 I have left in the deal. It will actually be a bit lower after factoring in vacancy and maintenance.

@Armel Bayot I did not have a GC walk the house with me before I bought it. I kind of jumped into the purchase and didn't quite have my team built out when I completed the purchase. But in the future, I do plan to have a contractor walk the house with me. But I will also warn that it may be best to have a GC you know and trust walk it with you. A random GC may not actually want the work and price their estimates too high, or just might not be competitive in general, and if you base your buy decision on their numbers you could end up always backing out of the deal. I did find that if contractors were busy, they would still bid on the project but give an outrageous cost. So if you are relying on that alone to decide to buy, ensure the cost is fair, otherwise it may prevent you from ever moving forward with a deal. 

I came up with my estimates by putting together a plan for the full house, room by room, which included my planned materials and cost [which I just priced out by picking out the items at Home Depot] , as well as labor estimates based on a $50/man hour bill rate. I estimated hours based on past experience, as well as just rough estimates.

@Ricky Chau - I came up with my estimates by putting together a plan for the full house, room by room, which included my planned materials and cost [which I just priced out by picking out the items at Home Depot] , as well as labor estimates based on a $50/man hour bill rate. I estimated hours based on past experience, as well as just rough estimates. Biggest gaps were in terms of the number of hours of labor needed, and a few big ticket items that I added to scope. Total renovation cost ended up at $80,000. 

Thanks @Account Closed - yes, the duplex was built in 1904. Definitely going to be looking a bit newer for the next one if possible, but so many properties in Cincinnati are in the older age range so will have to see what I can find.