All Forum Posts by: Slocomb Reed

BP Community and Newbie Investors! A piece of advice to those of you who live in expensive parts of the country/world and have your eyes on the midwest and southeast United States to get into cashflow investing...

As an active BPer, BRRRR investor, and an agent who works with investors in Cincinnati, I get a boatload of messages from BP members who are looking in markets like mine for great deals (at least 20% below market, great cashflow, not a lot of rehab, etc.). On behalf of many of us on BP who spend a lot of time and money hunting for these deals in our local markets: When we find them, we're buying them ourselves! (But please keep reading!)

We're at a time in the market cycle when every market is saturated with people looking for these deals and every market now has several investors who are out there hustling to be the early bird. Local experts who have done a few or more than a few deals and are looking to build their portfolio. Value add deals are complicated; there are a lot of moving parts and each one has the potential to turn a deal south and lose you money. With deals being so scarce we all have to find or create for ourselves a competitive advantage. If you're new to real estate and you want or need to invest in markets where you don't already have a strong network, then how are you going to be the one who gets the great deals?

I think I have an answer: it's time to shift your mindset. Instead of looking for great deals in great rental markets, look for great partners in those markets. People who are finding the deals you're looking for and would be able to take down more of them with your help. This comes with its own risks of course, but those can be mitigated with due diligence and getting part of a great deal is better than getting no deal!

More on identifying quality partners and structuring partnerships in future posts, for now please chime in and add to this discussion! Thank you!

@Javier Rosales it's important to keep in mind that if you're seeing a real estate deal in an open forum like the MLS or Zillow, so are thousands of other hungry investors and if a property has been on those sites for a while, thousands of investors likely have a good reason for passing on it.

Sometimes there are good deals to be had on the open market, but if I were you, I'd focus on putting a team of experienced and knowledgeable people together to help you identify which deals will actually pan out for you in their local market.

Happy hunting!

Welcome to the Cincy investing community @Sydney C.!

@Evan Polaski helps run the best investor meetup in the area on the last Tuesday of every month, I highly recommend connecting with him about the next one.

The first two areas you listed should offer great cashflow and there's upside potential in all three. That said, unless you're sitting on loads of cash or you're happy living on a shoestring budget for the next 10+ years, I have two recommendations on how to get to FI in 5-10 years:

1) Dive in. You don't have much time for a learning curve, so you need to start with high-upside deals that will teach you as much as you can learn. This is of course risky, but you have very ambitious goals and it'll take risk to get there on your own.

2) Focus on finding investing partners whose strengths are your weaknesses and visa versa. 1+1=3 in this game and, so long as you partner with the right people, the smaller piece of the larger pie should go a lot further towards feeding your lifestyle.

Good luck and feel free to reach out if you think I can help!

Hey @Mark Elder welcome to BP and the Cincinnati investing community!

If your primary interest is passive income, then I recommend you focus on finding great partners instead of great markets. There are a lot of high-quality investors in Cincy and the surrounding areas who would be able to help you get a solid return on your money without you needing to develop the expertise they already have. And for operators like us it's very beneficial to partner with people like you because it allows us to do more of what we're already already good at when we have access to more capital. 

Happy to connect if you'd like! And/Or to refer some great people I know!

@Kent Hall it's worth mentioning that Cincinnati proper has very left-leaning local politics and that City Council has made affordable housing and protecting tenants' rights a priority of late. Not pushing my own politics here, staying objective, but Cincy is starting to regulate STRs including the tax mentioned by @Paul Sian

Do any of y'all have a good place to look up the current STR regulations online?

Welcome @Zackariah Cole to BP and to the Greater Cincinnati investing community! I have ADHD too and I totally feel you on the self-employment front. I thought I'd just had terrible bosses until I realized that I thought ALL my bosses were terrible and realized that something else may be the issue with my employment.

I'm also a buy and hold and BRRRR guy and if I were you I wouldn't give up on networking just yet. @Evan Polaski helps to run my favorite meetup on the last Tuesday of every month. You should check it out!

Hey @Randy Dargan it was great meeting you earlier this week!

Since nobody else has said this yet I'll be that guy:  It depends on your goals.

Flipping the house will get you more profit sooner, but it'll be taxed at a higher rate but it'll be liquid in a few months.

Holding the property get you the long-term residual cashflow and you'll get most if not all of your starting capital back, But it'll take longer to see your profit.

So to answer your question with a question...Are you looking for quick profit (sweet vacation, replace career, etc.), or are you looking for steady long-term income?

If I were in your shoes, I'm not sure what I'd do. I'm fortunate to have been able to acquire a few great deals in the last several months, but they're leaving me feeling a bit over-leveraged. Since I'm trying to scale my portfolio, right now I'm holding on to SFRs and small multis until I have the opportunity to 1031 my gains on them into larger properties.

Hope this helps!

@Nathan G. Is correct. And for #4 that means that if you're counting anything below grade (ground level) towards your required living area, there have to be windows and the ground level has to be halfway down the wall or lower.

Hey @Tre Boston I think you have the right idea in looking for someone to learn from. I'd suggest focusing on how you can add value to an investor who's doing what you want to do, and using that opportunity to learn from them and possibly get paid for it.

@Phil Denton there are a lot of misconceptions surrounding wholesaling and what makes it legal or illegal. I have friends who are successful (and legal!) wholesalers who are both licensed and not licensed. There are hoops to jump through either way, I'd be happy to discuss it with either of you further in a PM.

@Ori Raz the issue may be that your properties are in Avondale and Price Hill. Those are lower-income neighborhoods and lower-income tenants, at least here in Cincy, are notoriously bad about beating up apartments. Plus there are very few reputable PMs who are willing to take on properties in those areas.

How many units do you have? That'll play a big part in finding good property management. That said, in Avondale and Price Hill, you probably need to underwrite for higher maintenance expenses than you originally anticipated.

PM me if you'd like to discuss further! I love Tel Aviv, I visited in 2018.