All Forum Posts by: Joseph Todd

I just worked with James from rocket city property inspectors on 18 units the other week. I was very happy with his thoroughness and attention to detail. They’re a relatively new company and as such are also very flexible and easy to work with.

Hey Gorden, good luck on your trip out to Huntsville. Do yourself a favor and check out OTBX for beer and then head to the voodoo lounge when they close for the night. What type of property are you looking at?

Without knowing the particulars of this specific house, it seems like you’re not giving yourself much of a margin for error. If your calculations on expenses or vacancy are even a couple of percentage points off you are putting yourself in a position where you may end up cash flow negative. Also, consider what would happen if the market goes through a correction, which many people have been predicting for a couple of years now. If rents drop 5-10% (or more, god forbid) are you going to be able to hold onto the property comfortably for 2-3 years while waiting for it to rebound? It’s always tempting to jump on deals that you have an inside track on but don’t necessarily make sense. Try to remove yourself emotionally from the decision and forget the convenience for your daughter and see if the numbers pencil in various, conservatively estimated economic situations.

Hey all, I’m taking my first trip out to Huntsville to look at property and have a few meetings with agents and PMs. Anyone in town free and want to grab a beer or something? I’ll be around from the 21st til the 24th.

Hey all,

My partners and I are looking to purchase apartment buildings in the Huntsville area over the next several months. I am, first and foremost, interested in starting to foster relationships with quality lenders in the area that will be able to offer guidance to us as out-of-state investors. On a more specific note, we are looking into a property right now that would require us to assume a loan that I have some questions about. I'd love any suggestions y'all might have and look forward to connecting with you!

Joe

Originally posted by @Sitaram Koppaka:

Good question. I am in the same boat. I am looking to invest in MF properties as well.

I would preferred columbus over Cleveland/Dayton/Toledo ( not necessarily cincinnati)) since Columbus is growing, expanding; lot of companies moving to midwest are coming to columbus. I can go into more details.

True, MF within the 270 belt is your best option. A cap rate of 10% I would call high but you should be able to get 8/9%. I recently looked at a property, cap rate was slightly above 10 but when I visited the property after my calculations/analysis, it was not worth it. 

Neighborhood is a big factor, I would say B-/C+ is good for MF; I donot know what is your budget but you will be looking at relatively higher prices than say you were looking in Cincinnati or Cleveland. I am looking at D too.

Yes, I do see population going to suburbs and would prefer to have home of their own. But this should not deter you since there is heavy mobile population in and around columbus. I would assume 80% occupancy for MF anytime.There is so much construction going on right now. They are selling Condos in Dublin for 600K.

The growth of columbus as a city and it's stability and sustainability to economic dips proves that the market will sustain and move forward. I donot think I am too concerned about it.

 Hope it helps.

Thank you for your thoughtful response and insight. We have a budget of $500k-$750k to start out. Ideally we're looking to start slow with a couple of smaller projects to get a feel for the market we choose. 

I am curious what your take on Cincinnati is. I have a lot of family there so that is kind of tilting the scales toward Cinci over Columbus right now. Prices being lower for comparable property classes, as you mentioned, is also enticing.  

Well, yes, they are different places, but I would be able to give at least an overview of what cash flow in each area looks like relative to the others based on the factors that differentiate them.

Hey all,

A couple of partners and I are getting ready to deploy some capital in medium-sized multifamily in Ohio. We are looking to get into B neighborhoods or upper end C neighborhoods. Our primary goal is consistent cash flow, not particularly worrying about appreciation. Those of you who invest in or work with MF primarily, I am curious:

1. How do you see Columbus compare to the other major metro areas (primarily Cleveland/Cincinnati) in terms of cash flow? Am I wrong to think that cap rates have declined as a result of millennial movement into the city and constraint on supply?

2. What are the reasons you chose to invest where you did?

3. Do you see population and jobs continuing to leave urban centers in favor of suburbs?

4. Besides the excitement about affordable property values and some young people taking advantage of this affordability, what are the real driving factors that will carry these markets forward and ultimately transform them into healthy, sustainable areas?

5. Are there any local resources that I wouldn't know about and should check out to expand my understanding of these questions?

Much appreciation to anyone that is willing to speak with me and help out. If there is something I can do for you to make it worth your time, please let me know. Hope to be working with some of you soon!

-Joe

Originally posted by @James Wise:

Originally posted by @Phil Morgan:

I am wondering if anyone can give me some insight into cap rates on larger buildings in different areas around north eastern Ohio.  I am looking for larger buildings, 12 plus units, and am trying to grasp the different cap rates in A, B and C neighborhoods.  I know there are slightly lower cap rates in more desirable areas but how big is this gap?  When looking at Lakewood vs Wadsworth or Medina.  I would love to hear from someone who has experience with larger properties in these kind of areas and what cap rates I should be using when evaluating deals.  Thanks 

 The #1 issue is lack of inventory. If your looking for 12+ resi buildings in quality neighborhoods they are few and far between. Expect to see 7 or less as their is so much demand anytime one hits the market.

James, what do cap rates look like for smaller, let's say 4-7 unit, properties in quality neighborhoods? Any better than 7%? Considering a ballpark of typical expenses, what sort of return can you actually expect to see as a cash investor currently?

Perhaps I'm reading it wrong, but the Fannie Mae report actually says that job growth in Cleveland will outpace new MF development. They attribute this to construction costs being the same across all markets while Cleveland has comparatively low rent. The analysis in this article seems to be geared more towards prospecting developers than smaller investors looking to buy existing inventory.