All Forum Posts by: Nathan Currier-Groh

@Benjamin Ford

I’m in a similar strategy and applaud your bravery here.

A couple things for those just trying to analyze this as a deal:

Once you are in an income contingent repayment plan it snowballs.

As soon as the snowball grows too large you aren’t going to slow it down by working more.

Debt forgiveness is part of the rules.

Acquiring properties that cash flow and depreciate can bring home money while allowing one to stay in their income based repayment plan.

If your paper income is low enough you may qualify for a monthly loan payment of $0.

If your loan payment is $0 or lowered by the income rules to 10-15% lenders will base the debt on the payment amount not the loan balance.

It’s a cash flow play with hope of capital appreciation that may clear the debt one day... and pay the tax bill on the forgiven amount

This kind of debt hangs particularly heavy for a lot of us, and people should take extra care to remain constructive. The comments so far have been more professional and positive than I would have expected. Nice job BP.

I used Wingate in Cincnnati. It was a $5000 job for a 1-br. The unit goes for under $1800. 

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $75,000
Cash invested: $15,000

Mixed-use brick building with a storefront in the Camp Washington business district. Two commercial suites on the ground floor. The second floor has a two bedroom apartment in the front and a one bedroom apartment in the rear. The same can be found on the third floor. The fourth floor is unoccupied, but in the past it had an apartment.

The neighborhood zoning has been recently changed to the new designation of UM - Urban Mix, which was used in OTR.

What made you interested in investing in this type of deal?

Geographically close to downtown and the University of Cincinnati. The storefront had value for owner-occupancy of my other business. Cash-flow from existing tenants. Rents were well below market rates.

How did you find this deal and how did you negotiate it?

It was listed, delisted, relisted, delisted, and then they were asking $80k and offering seller-financing. Renegotiated after an inspection.

How did you finance this deal?

Attempted to negotiate seller financing. That fell through. Went to a local bank and got a conventional 30 year loan even though it was a commercial loan. My other business, which is renting the storefront, signed as guarantor. It was that business' revenue that secured the loan.

How did you add value to the deal?

I am still working through the deferred maintenance. Some investors would consider it a full gut rehab. It would be easier to do that. I have completed renovation on one apartment, a 1-br, new flooring, kitchen, bath, fixtures. It went from $200/month to $550. Currently renovating the other 1-br. The two 2-br units are mostly untouched and still below market. Installed a mini-split for one unit.

What was the outcome?

Ongoing project building with more value potential from renovations. Very excited about the direction of the neighborhood.

Lessons learned? Challenges?

The amount of deferred maintenance would eliminate it from most of my searches, but its location in the business district and usefulness for operating my other business out of the storefront trumped that. Future investments however will be nowhere near this level of attention.

Santen & Hughes - J Robert Linneman - specializes in business issues and contract law. I don't know if he is taking new clients. I've always been happy with the counsel and results.

A quick google brings up a negatively sloped line for Cincinnati. However, the population here has been growing since 2011, and just crossed 300,000. I can't find a table that shows just urban growth, but anecdotally I think the areas closer to downtown are experiencing more rapid growth. It is tricky and really it comes down to specific neighborhoods. The strategies I've used for investing so far have relied on hyper-local information rather than broad demographic shifts. Can't imagine doing out-of-state investing unless it was a place I had lived previously.

Southern Ohio Glass in Northside if you are repairing windows.

https://www.citybeat.com/news/blog/21062523/cincinnati-city-council-skeptical-of-shortterm-rental-regulations

I would email David Mann and his office will send you a list of meetings on the calendar.

You should probably be following the Cincinnati City Council's plans on regulating STR in Cincinnati. It is a developing situation and I wouldn't be executing a new business plan for STR without knowing how that would play out.

6 month check up, ha. Still think its dead?

Here is a little insider information that even Cinci locals may not know. The wait list for Parker Woods Montessori kindergarten spots is now the longest in the district, passing the German Language School. 

I don't know what kind of indicators people are used to seeing, but this is a strong counter to the opinion that the neighborhood is fringe, or only appeals to DINKs, or is dangerous.

From a new investment standpoint there is a lot of competition for the few deals left, but there is a steady supply of new listings because people are cashing out. The capital appreciation on the single family homes over the last 5 years is greater than 100%.

I would prioritize being close to the intersection of Hamilton and Montana. I focus my attention on complete neighborhoods with at least a small business and entertainment district. Westwood has this as well as the support of the mayor funneling money into some projects near the intersection I mentioned. I respectfully disagree in part with Kris. The mechanism of movement he mentions is happening, but I see it being concentrated more in the Price Hill area. I know several families that are happy in Cheviot.

Mt. Airy Forest abuts some properties and is a huge resource for recreation and quality of life. Walk-able-ish business district plus huge urban forest is a recipe for happy residents and long term stability.