All Forum Posts by: Joseph Cornwell

@Todd Kalsey

My thoughts and opinion are in line with most of the feedback on here. As mentioned, most of those neighborhoods have specific areas that I would not invest in. The biggest question that needs answered is what areas can you afford, and how are you going to manage them? If you are managing them yourself, are you comfortable collecting rent, showing units, etc in D/F areas? If not then you either need strong management that is comfortable and you need to buy at a price that makes sense to pay for management. It's basically a simple ideology of, the better the area the more it cost which typically = less cash flow. This can also mean less turnover cost, vacancy, etc. Its all risk vs reward... you could also potentially invest in an F area, find a great tenant and they take awesome care of a property, and it cash flows through the roof. Those are the first questions I would answer, what is my comfort level, who is managing, and how much risk can I afford? 

As for the Deer Park Vs. Silverton discussion, having worked for both police departments, prior to Silverton's disbanding in 2014. Deer Park is very different, even though the City Buildings are less than a mile apart. Silverton has significantly more crime, and violent crime. Also most of Silverton is in the City of Cincinnati's school district. I would suggest researching those school systems, class sizes, etc to make an informed decision if you are looking at either of those neighborhoods. 

Good morning Cincinnati! I am working on pricing a rather large rehab project in Sycamore Township. It has a few areas of concern, potential foundation issues, structural, and generally distress and outdated. I am looking for referrals for someone who may be interested or looking for work in my area to help me further inspect and bid the job. I have a private lender on board for the project. Please let me know if you can help, thank you!

@A.J. McGee,

@Joe Fairless Host a monthly meetup for Real Estate Investors as well, No fluff/sales pitch, just networking, next Tuesday is the next meet up, I would reach out to him to get the event link! Hope to see you around!

@Sterling White

I do not, I am speaking strictly from criminal statistics, and close friends who are police officers in some of those neighbors and some of the issues they deal with. I work for Deer Park, and the eastern side of Hamilton County is my target area for buy and hold. Also I would like to correct myself, Covedale is not known for high crime as I accidentally mentioned.  

Anyway, if you feel comfortable doing hands on management in some of the lower income neighborhoods there is certainly a margin for high profit, with proper screening and tenant training. In my opinion there is an axis for buy/hold investing, typically in B,C neighborhoods you pay more than D,F obviously, right? However, with the lower upfront cost of buying lower income housing typically, you can receive a higher CoC return with proper marketing, screening, and management. If you have researched your target markets and risk tolerance and believe that is what you are interested in pursuing there is certainly money to be made! My personal strategy is to focus on B,C neighborhoods, to find the best possible rent to cost ratio within those areas, and then hopefully have less back-end cost, maintenance, vacancies, evictions, damage, vandalism, etc. The cost of this mitigated risk is a higher entry or upfront cost. Either way in any location or price point, you need to find the best deal possible to be profitable. I wish you the best of luck with any area you choose!

@Sterling White 

What type of investing are you referring to? If you are talking about fix and flips, any neighborhood you listed has potential if you can buy houses cheap enough, there will be room for profit and finding a buyer at the right price. Areas of Price hill, Covedale, North College Hill and College Hill are very low income/high crime areas, that would be a risk for any type of investment. Most neighborhoods in the City of Cincinnati carry some risk for violent crime or low income housing nearby. There are many parts of Colerain that I would consider nice or middle to upper middle class. However, Colerain is the largest Township in Ohio, and also has several areas that are crime ridden and low income as well. 

If you are talking about long term buy and hold I would be even more cautious about investing in low income neighborhoods, unless you have talented property management to handle that market of tenants, and other potential problems that come with them. I think the most important questions is how much hands on management can you afford in these areas, and what is your risk tolerance to C,D,F neighborhoods?

@Sean Cole

Well, that would certainly be a deal!

@Sean Cole 

I was not directing my comments at you specifically, and if you are providing value for those investors who are buying MLS deals from you, I am happy for both parties! My point is that anyone can tie up MLS deals and "estimate" ARV and Rehab cost, and then try to push that product onto investors, and in most of my experiences with wholesalers thus far that is exactly what they are trying to do. As an example MLS will have a 3/2 listed for 95k, with rehab cost at 15k minimum, and an ARV max of 115K. The wholesaler then typically without even negotiating a lower cost for his buyers will try to push that property for 105K, then they will underestimate the repair cost to 10K and say the ARV is 125k. Clearly in this example, which is reflective of many MLS wholesalers in Ohio, they add zero value, they waste the original sellers and all buyers time, and if they are luckily enough to find someone naive enough to not do their own due diligence, they have effectively scammed them.

Now, if you take the example in this deal and your company could negotiate the original sellers 10-15% off their list price, you have created value for potential buyers. As you said, I do not care where a deal comes from, as long as a wholesaler is adding real value that I was unable to do myself. 

Thus far, in my limited experience with wholesalers my main complaints are people marking up MLS prices trying to get subject to deals through to buyers. Low balling repair cost, and in general just pushing garbage onto potential buyers. Based on everything I have been able to find regarding current Ohio Law regarding wholesaling practices, if you are not a licensed realtor, you can not legally act as a middleman for properties you do not own, for profit. I understand people frequently violate this however. In my opinion, a legitimate wholesaler will add value by only promoting off market deals, give accurate repair cost, and ARV, (I will add that I would never purchase a property without fully completing my own due diligence as well), and will only act within their state laws. Unfortunately, I have not found many wholesalers like this in my area.

@Alex M.

Congratulations on all of you success thus far! I do have one questions about how you were able to utilize FHA loans on investment properties. This was one lending avenue that I first attempted, I was told that FHA loans are only usable for owner occupied properties, and I would have to live there for at least a year before being able to rent out the unit. Just wondering how you were able to use this funding. Thank you!

@Sean Cole @Christina Carey,

Thank you both for the advice. I have a couple more interviews set up with Sibcy Cline and Star One Realtors. I have reached out to Keller Williams and Remax as well and hope to meet with them soon. I spoke to a handful of smaller brokers who all explained they would not want to hire a new agent, and did not have the resources or time to train or assist them. Comey and Shepherd stated they are only looking for full-time agents, which is obviously not an interest of mine at this point. I will let you guys know what I decide, I appreciate the input!