All Forum Posts by: Peter Lohmann

Very tough time to buy in Columbus. I would define the multifamily investment property market as "irrational exuberance". People are overpaying for very marginal properties. There is NO room for unexpected expenses, let alone an economic downturn.

We'd be happy to chat with you. Thank you for the recommendation Remington.

Rick Craven, Omni Title & Sikora Law

Quoted for truth.

LOL at contacting CMHA. They are like the most unhelpful organization in the history of the world.
The demand is strong in Columbus due to less and less landlords participating; if you offer 1, 2 or 3 bedroom units and accept section 8, you will have people applying. I would say 2 and 3 bedroom have stronger demand than 1 bedroom.

But really, demand is not the issue, nor is the rent amount (they pay roughly market rent, plus or minus). The issue is the quality of the tenant base (they have no incentive to take care of the unit/property), and the difficulty and expense of dealing with CMHA and their inspectors. I can share more if interested.

Guys, Columbus is tapped out. Go back through the posting history for columbus ohio. There's a new investor moving into the space literally every business day for the last 5 years. Cap rates are severely compressed. Anything that hits the public listing sites is junk. Time to find a new strategy/market. We're at the peak.

Property management fees are excluded from my list (not all investors use property managers). Insurance, mortgage interest, and taxes are also excluded since we do not pay those on behalf of our customers.

by Peter Lohmann | Jan 10, 2020 | Investing in Rental Properties, Owner Education, Uncategorized | 0 comments

We recently conducted an cost analysis examining spending in the year of 2019 across our entire portfolio of managed multifamily (2+ unit) properties.

Out of the 300+ units under our management around Columbus Ohio, this study includes just the multifamily properties (37 properties consisting of 137 units). We wanted to know how spending in the various accounting categories compared to each other. Eg – do our clients spend more on pest control, or appliances? Here are the results:

As you can see, the category of “repairs” is dominant. That certainly matched our expectations. “Repairs” covers a lot of different types of work that goes on at a rental property, including capital improvements and turnover cost.

Let’s exclude repairs and take a closer look at the remaining items:

Utilities are dominant, although this can be misleading because utility cost is typically dominated by water/sewer, which is normally billed back to the tenants.

Landscaping is something that investors moving up from single family to multifamily often forget to include in their pro-forma. It is a significant factor as you can see, overall the 3rd highest category of spending. Snow removal (typically done at larger MF properties) is another one that investors who live in warm climates may forget to account for when purchasing property in the northern part of the US.

Cleaning and clean-outs are tied to turnover (which itself is the most expensive part of owning rental property, by far).

We caution against tying expenses to a percentage of rent, as this can be very misleading and does not tend to scale up or down at all (ie, expenses are not correlated with rent). A better way to estimate expenses is to calculate them on a per-square-foot basis.

Do you have any questions about spending at your property, or are you curious to know how we might predict costs at a property you are considering purchasing? Please get in touch.

No tenants are better than bad tenants.

But you can and will secure good tenants in C properties/neighborhoods if you do it right.

Everyone read @Jim K.'s remarks in this thread. Then read them again.