All Forum Posts by: Slocomb Reed

Hey BP Community! My book club is reading Joe Fairless's “Best Ever Apartment Syndication Book” this month, and Joe is joining us for Q&A on June 24th! Join the book club's FB group if you want in!

https://www.facebook.com/groups/595682967705000/

Each month we read and discuss a book that helps us learn and grow as real estate investors. Meetings are online every Wednesday at 12pm Eastern with FB Live recordings available afterwards in the group.

June 3rd:  Part 1 - The Experience - chapters 1-16

@Jonathan Farber you'll likely find that commercial brokers have a better understanding of creative financing than residential realtors. Seller financing is more common when you get into larger properties. A fourplex listed by the owner's friend who just got his license? Not likely.

@Dave Spooner I used to live near OTR and I still love the two properties I bought down there before the market got too hot. Another great thing about the area is that most of the highway systems in Cincinnati are designed around going between downtown and the rest of the metro area. You can get great stable cash flow by driving west 10-15 minutes and appreciation/gentrification potential by going north, east, or south in under 10 minutes.

I was more willing to discuss up-and-coming neighborhoods before COVID-19, but I'll say that I'm still happy I bought in East Walnut Hills and Northside in late 2018.

@Aaron Bashore if you're more interested in appreciation than cash flow then it's a very good thing that the area around that property is predominantly owner-occupied. Owner occupant home sales drive the market when it comes to property values, and it sounds like you're excited about the prospects in that area. 

There are a lot of reasons why people rent single family homes in nice areas. Assuming yours is roughly equivalent to what's in demand in the area I'm sure you won't have trouble renting in an area like the one you're describing. It's possible that your tenants don't stick around for as long, but your vacancy periods should be short so long as you keep them in the early summer when school-district-driven renters want to move.

@Tri Le have you checked with Spring Valley Bank? They've been good for single family flip loans but I don't know what they're willing to do right now. Used them a few years ago myself, refer my clients there often.

@Dave Spooner where are your current properties located? As my portfolio grows and my time gets stretched thin (self-managing) I'm learning to value consolidation and synergy much more. It's easier to manage properties that are close together, whether you're the one doing it or you're hiring it out.

@Maria Osokina you're right that it will be next to impossible to find a 2% deal in an area where you want to live, especially if you're considering a 390k property in Ft Thomas. When you get into higher purchase prices though (sticking with 3-4 units) you'll find that you don't need the rent to value ratio to be as good as you do with cheaper properties.

Many of your expenses will not be proportional to the property value or even the rent rates. Utilities should be about the same for similar sized properties regardless of property value, and you'll only have 3-4 fridges, ovens, etc. that need maintaining or replacing.

Breaking even while owner-occupying a fourplex in a decent part of Cincy is still doable right now but those deals are not common and they sell fast. $200 per door will be tricky, but it's good that you're looking at a higher price point to accomplish that.

Unfortunately there's no way of knowing what's going to happen to property values in the next few months, but I hear what you're saying about being able to sell soon without losing money. If you want to follow up, I'd be happy to connect!

Looking forward to it! Ryan is a good friend of mine and a very savvy flipper. It'll be a fun interview to listen in on for sure!

@Tracey Solomon you may want to address the late rent situation first. If your current tenant can no longer afford the rent, it may make sense to let them move out first, then rent the whole house or both bedrooms at the same time. Or if you want to find a way to make it work with the current tenant, there are lots of ideas in the forums for assisting someone with temporary financial hardship due to coronavirus.

@James Morrissey unfortunately we don't have enough info here to know if this deal is any good. There is a huge difference between 1% neighborhoods and 2% neighborhoods in Cincy, where is this property? While I can extrapolate that you're putting down $10,000 per unit, I'd need to know how big the property is and what your financing looks like as well. Also I couldn't open your spreadsheet, but I've requested access and I'd be happy to discuss the deal with you further after I've seen it.