All Forum Posts by: Saleh Riazi

Thanks Steven for the post. I own a small multifamily commercial in Albuquerque and can confirm the diversity of the economic and cultural factors that you mentioned. 

As we are moving to scale up our investment portfolio, me and a few of my mastermind group members are back to the drawing board researching markets and are already faced with the challenging task of determining which market fundamentals to focus on. We decided to share this with the BP Community and get some additional thoughts and guidance. Some of the attributes that we are looking at are:

Economic factors: job market data such as change in the employment and unemployment rate, mean wages in the past few year and total and percent people employed in each market. As expected, this factor made the top of our list, and we are spending more time evaluating each markets economic expansion and job growth. Census.gov and bls.gov can provide some good and reliable data for these attributes.

Housing affordability index, another important data and can provide similar information as the rent to income ratio which can be used to determine the capacity of a market for any future rent increase. This attribute is also readily available on census.gov.

Real Estate data: such as new listings, closed transactions and median number of days on market which can provide a good measure of the flow of transactions and the competitiveness of a market. This information is also easily accessible using the annual or quarterly reports of Association of Realtor for each market.

Landlord friendly markets, another very important factor to look at, as this can make a big difference in items such as the cost and length of evections process, rent increase, deposits and/or the utility expenses that the landlords are responsible for. It seems like almost all websites have more-or-less consistent data across different states.

After listing to the BP podcasts 568 with Ivy Zelman we added the new construction permits data to our table as well. In our opinion there are two insights that this information can provide, one being the desirability of a given market for larger investment firms and hedge funds as well the possibility of shrinking future profit margin in that market. This information is also available on census.gov.

Last but not least, Rent-to-price ration. This seems to be the hardest one to find. There are a few different websites and resources that can be used to get this number and unfortunately there are some significant discrepancies across these websites. We think one of the reasons for this is how this number is being calculated. For example, using SFH versus MF properties or number of rooms in each property as the rent-to-price ratio of a 2-bed SFH could be different than 3-bed MF properties. Looking for some insight from the BP community on this and other factors listed here.

@John Minnix, that is why I decided to write about it. I am not sure if it is the same across all counties but up to 2 years depending on when in the tax fiscal year you purchase the property.

@Paul Merriwether, good information, thanks for sharing. Would you mind also share the source of that information.

@Paul Merriwether, I can certainly share my experiences about PMs and agents to avoid.  PM me since I don't want to break any of the  Biggerpocket forum rules by posting any names . I also think it is a great idea to contact the city or better yet a tax attorney to get some insight on the taxes in the area, It could literally make a good deal a money loosing one. 

@Hai Loc, yes you can evict in Columbus but just FYI, make sure in addition to the cost of the eviction court and attorney, you include up to 2-3 months of non-payment and the costs associated with the rent ready rehabs of the unit afterwards in your calculations.  Good luck. 

@Account Closed, I didn't mean to scare anybody away from Columbus but rather provide some factors to be aware and cautious of.  Message me if you have any questions, and be happy to chat.

@Account Closed, great information. Thanks for sharing. 
 

Great points. I agree with all of you and that is exactly what I said... " Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it."

@Brian Garlington, I actually do travel to Columbus myself a few times a year at least. But until you live in the area traveling there wouldn't give you a best understanding of different neighborhoods. That is where finding some local honest people can be very helpful. Never the less, I agree that you need to physically be there and check on your investments. 

@David Song @Jonathan Styergood tips, appreciate the input. 

Hello BP community, 

I thought to share a few of my experiences investing in Columbus Ohio. 

1. The Tax will increase immediately after you buy a property to match the purchase price and you are also responsible for the difference for the years that you didn't even own the property.

I purchased my first property back in Jun of 2020. It was a pretty beaten up Duplex in an area of the town that I was told it is a "C" neighborhood by a local RE agent. The tax on the property was less than $800 but I did my underwriting using the asking price which placed the tax at $1700. Immediately and in less than 3 months after closing I received a letter from BOR, Columbus Board of Revision which reassessed my taxes and increased it to match the purchase price. But that was not the issue until I learned that I am now responsible for the difference for the 2019 and part of 2020 that i didn't even own the property. I contacted a local attorney who is very knowledgeable about this and he helped me understand that this is a Columbus law.  

2. Cash out refi: When you cash out refi the property, the BOR will most likely increase the tax to match your appraised value. So make sure you calculate the tax using ARV and not the purchase price.

3. Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it. Otherwise you will learn this a hard way that somebody's "C" neighborhood is really a  "F" neighborhood. 

4. Make sure to find a good property manager who manages your type of property before you purchase, or have enough cash to cover the consequences of it. 

I had my fair share of bad experiences with Columbus PMs and want to make sure every investors here find a good PM before starting your investing journey in Columbus. And yes I did interview them and asked them all the right questions. Just didn't do a reference check, maybe that is the key. 

Be well and don't overpay for a property just to own one my friends. 

Hey Javaras, 

Send me a message and I could try connect you to a couple that I know in the area.

Thank you

Excellent, Thank you so much @Max Gradowitz. Really appreciate the resources. 

Hello BP community, 

I am looking for an Real Estate Attorney who could help me address an issue with a HOA. I am not sure if he/she needs to be a local attorney to San Francisco, where the property is located, or can be anywhere in CA. But any recommendation would be greatly appreciated.

Thank you