Hello, BP friends. A group of four, myself included, are looking to form an entity and break into REI in NE Ohio. We're close friends in our mid-30s, raised and residing in the area, all involved in our careers, but sharing an ambition to have something on the side. We've agreed to each put in a modest 25k as a starting point, and are currently doing as much research as we can, looking at potential deals, and reaching out to those with more experience to help guide us in getting the ball rolling. Our primary objective is to increase our capital to make a larger deal within 1 year of our first purchase. To that end, I have some questions for the community.
For those that know the Cleveland / Akron market, is the Buy/Rehab/Rent/Refinance/Repeat strategy still viable today? We are not looking to do the work ourselves but to hire a contractor, and we’ve been told by several realtors and investors that without adding our own sweat equity that it would be extremely challenging to do a successful flip, let alone a cash out refinance - does this ring true, or are there other options worth exploring?
More generally, what are some of the best ways to estimate repair costs of a house? Should we bring a contractor or inspector with us before we purchase? What would be the best ways to go about obtaining a loan and forming an LLC? We have been advised to get the loan and house first, then transfer it to the LLC afterwards, and are looking for more perspectives and advice about forming such an entity.
We have also discussed adding value to a commercial building to increase rents, and are staying flexible in our outlook until we gather more information. Ideally, we would like to connect with a group who started from similar circumstances to ours, with similar ambitions of scaling an REI business. Though its a new venture for us, we are committed to figuring this out. Please feel free to contact me directly regarding any recommendations, advice, contacts, or other value you may have to offer.
