All Forum Posts by: Jonathan Small

@Jenna Schulze It's great you're getting into real estate investing! Cleveland and Toledo are indeed often discussed as potentially good markets in Ohio, but "better" depends heavily on your specific investment strategy and risk tolerance. Here's a breakdown to consider:

• Cleveland: @Zeke Liston You're right, Cleveland often boasts lower purchase prices, making entry easier. However, be cautious about focusing solely on low prices. Look deeper into the specific neighborhoods within Cleveland. Some areas have higher crime rates and lower tenant quality, which can lead to more management headaches and higher vacancy rates. The "high appreciation rates" you mention should be verified with recent data and be specific to the neighborhoods you're targeting. Some areas may appreciate, while others stagnate or even decline.  @Samuel Diouf I agree it is a stable market with low barrier to entry. 

• Toledo: Toledo generally has even lower property values than Cleveland in some areas, but similar to Cleveland, you'll need to do thorough due diligence on specific neighborhoods. Toledo's economy has been more reliant on manufacturing, so understanding local economic trends is crucial.

• Beyond Cleveland and Toledo: You asked about other Ohio cities. Consider these factors:

  • Columbus: @Jimmy Lieu is right about strong job growth. While likely more expensive than Cleveland or Toledo, Columbus has a more diverse and robust economy, driven by government, education (Ohio State University), and healthcare. This can lead to more stable rental demand. However, higher prices mean potentially lower cash flow.
  • Cincinnati: Similar to Columbus, Cincinnati has a more diverse economy than Toledo and parts of Cleveland. It's also seeing revitalization in certain areas, which can be attractive for investors. Again, expect higher prices than your initial targets.
  • Smaller Cities: Don't completely overlook smaller cities or towns with strong local economies (e.g., a strong university or a growing industry). These can sometimes offer good value and less competition from large investors.

Key Questions to Ask Yourself:

• to @Joe Villeneuve point...what research are you looking at.
  Cash Flow vs. Appreciation: Are you primarily looking for immediate cash flow (rental income exceeding expenses) or are you betting on long-term appreciation?
• Property Management: Are you planning to self-manage or hire a property manager? This will impact your costs and time commitment.
• Risk Tolerance: How much risk are you comfortable with? Lower-priced properties in less desirable areas often come with higher risk. @Arn Cenedella and @Nicholas L. makes a good point about investing in a area where you live or an area you know well.  It is not always about stats.

Recommendations:

1. Neighborhood-Level Research: Don't just look at city-wide data. Focus on specific neighborhoods within each city. Look at crime rates, school quality, vacancy rates, and rental demand in those areas.
2. Talk to Local Real Estate Professionals: Connect with real estate agents, property managers, and other investors who are active in the specific areas you're considering. They can provide valuable insights.
3. Run the Numbers: Create detailed financial projections for each property you're considering. This should include potential rental income, expenses (including property taxes, insurance, maintenance, and potential vacancy), and your expected return on investment.  @Jorge Vazquez, would insurance make Central Florida cash flow a lot less.

Starting with duplexes is a great strategy. Good luck with your investing journey!

@Dan Grove I would like to know how this conversation turned out.

It seems you have a lender willing to do 70-80% and be in 1st position.  You are looking for capital to do the other 30% plus closing cost and buying fees that will be in 2nd position.  Let me know if I got it right.

@Luke H. what did you decide to do with this deal?

2.  If the borrower already was foreclosed on, how are they still in the property and available to do the deal?

this deal seems like a lot of risk and I am interested to seeing how it turned out.

I love that the BP community is so open to giving advice and resources.  

i have done a few BRRRR projects. I recommend the book: "BRRRR: The BRRRR Rental Property Investment Strategy Made Simple" by David Greene and Clifford Ponder.

Message me if you have specific questions I can help with.

I have been buying properties from wholesalers since 2008.  I personally have never meet a good wholesaler.  I have meet wholesalers that have good deals.  I have not meet good wholesalers that I have bought more that 2 deals in their life.

I have bought plenty of off market deals from title companies, realtors, property managers, and home owners.  That is where I find good off market deals.

....but a good wholesaler....I have never heard of such a thing.

Poster is a member since Dec 24, 2024.  This is his 1st post.  I bet $1 this a bot.  I bet $2 we are all wasting our time replying to this nonsense.

I look for cashflow to service the debt, repairs, cap ex, taxes, and insurance while the equity grows, my taxes are decreased, and rents are increased to make more cashflow.  Cashflow is key!

I don't worry about what others are making.  If I want to make more money then I need to go figure out how to make more money.  I don't look at the cleaning lady and say you are making too much because I am making less.  Don't look are other people's pockets. Look for an opportunity and take advantage of it.  Don't take advantage of people.  Take advantage of opportunities.  If the cleaner is making so much money, maybe you can start your own cleaning business or figure out how to partner with your current cleaner.

I feel I have mastered rent increases.  I keep our rentals in great condition so this strategy  make is easy for me.  I usually print out the market rent provided by Zillow and a few other websites.  provide it to tenant.  Let them know taxes and insurance cost have gone up.  Ask them what is a fair rent rate to go up to.  Ex:  Lets say market rent is $1,200 and they are paying 900.  I may offer they can either pay 1,100 or 1,150.  Their other option is to move out and pay $1,200 somewhere else.

Don't just think about cashflow.  Think about capex and repairs.  Ex:  A roof in my area cost 9,000 and will last 25 years.  9,000 / 25 yrs is $360 a year.  The $360 a year breaks down to $1 per day.  As a land lord you need to be putting away $1 per day to pay for your future roof.  We still need to calculate appliances, flooring, windows, HVAC, fixtures....My point is that we need to be putting away money to keep our properties in max market rent rate condition.

look at deals on marcusmillichap.com/. These are brokers that provide professional T12. Evaluating deals on this site will help you understand expenses, income, and financial statement.