All Forum Posts by: William Carroll

An investor perspective... you have to define your value-add over me just finding another contractor and pocketing 100% of the profit. Could be one of:

1) you are eating the upfront labor cost.... I have actually seen this model between an investor and a contractor I know. In this model you are expecting to get more than your standard labor rate via 50% of the profits from the flip as a return.

2) You are not eating the upfront labor costs during rehab, but.....you have some way of finding seriously great property bargains and are bringing a flipping investor into a highly profitable deal that they could not easily find on their own. You could even work with a buy-and-hold investor by pre-agreeing to an after-rehab price, have the investor cash you out at that price when finished. This could be huge right now because good deals are getting very hard to find.

3) you guarantee the investor a specific return on their money... basically hard money.

Who's finding the deals in your arrangement? That's a key detail. If you are finding them (and they are good), you have a lot more value to bring to the table. 

I'm on a roll today so what the heck.. here's my Weiland park story: 

MLS property seemingly under market by about $80k..... was going to offer $20k over ask. Newly renovated, 3be 2 ba, Close to Short North. No garage or rear access as the adjacent lot (a board-up) owned what should have been this property's back yard . Row homes on one side, convenience store on the other. Walked through the property in around mid day.. couldn't figure out why this thing is so cheap. Owners are in a 3 year special city redevelopment tax break, they are leaving after having bought just 1.5 years ago. Seemed like a deal... too good of a deal.

I went to dinner that night around 7 and decided to drive by. A little busy around the row homes, lots of people standing outside the convenience store. Returned from dinner round 10:30, same thing. Pulled over on a curb for 10 minutes to observe, lots of people walking back and forth from corner store to row homes. Some guy across the street throws his empty 40oz into the trashy lot and heads to the row homes. Now we have the real story!!!

All this traffic is probably survivable for people living in this house IF they had an escape hatch out the rear of the property. But their only way in and out was through the front, where all the corner-store / row hime traffic was. If this house was same street, same side and one block in either direction it would have been the RE deal of the year.  But no sane renter would ever be happy in this place. Even the current owners couldn't take it any longer. My guess is that some buyer would view this property in the morning when the traffic is at a minimum and think they are getting an incredible deal, not knowing the reality of the situation. 

The point of this story is that it really has no point.... other than I'm going to do extra thorough due diligence on any future property that seems like a super bargain, especially if its on the MLS.

I live in Upper Arlington. Definitely A, we have the tax bill to prove it.  

Not sure about Weiland park, i know people are trying to push this neighborhood, but it's rough in spots... anything cheap there would probably require an assumption check. 

I second that OTE and Merion are trending B. I'm getting outbid in these neighborhoods a lot.  

I was at Friday's auction as well and think I saw the property you mentioned get bit up. 

I have been trying to learn the action process because MLS buying in Columbus has gotten out of control, but there are still a few critical aspects I do not understand that I would like to learn more about. If anyone local who knows Franklin County's auction process and is willing to take a few minutes to walk me through some things, including some pointers on how to do proper due diligence before bidding, I would be very thankful and hopefully able to return the favor someday.

I got a pretty good deal with my OTE property, but after looking at rehab costs, it still only just above the 1% rule. That area has gotten out of control last couple of years... even seeing people bidding over ask. Very pricy. 

If you are in a D area in Columbus, I would re-check that 10% vacancy (delinquency) assumption, and also check your assumption on ability to raise rents. 

Columbus is a great town with a nice economy, and rents are pretty tight in columbus for C and above. However, like any large city, there are literally 1000's of D class properties in Columbus where you will be lucky to collect. Do you have experience in this type of property? How are you going to manage these? 

Also, if this is West Side/Hilltop/Westgate (aka "Heroin Alley"), you should probably walk away. 

There was a sale like this in Columbus a few years back, close to OSU Campus. Large brick church, a really amazing structure. The buyers bulldozed the building and installed a set of multi unit rentals on the land. Probably your best bet with something like this. 

Usually these leveraged and index funds are more geared for day trading. 

http://news.morningstar.com/articlenet/article.asp...

Personally I'd probably focus more on diversification if you are concerned about your current RE positions.  

I live in Columbus. In my experience, this is very true for the residential market, but if you are looking for doubles or multis (as you mentioned), the time of year will not affect price or competition. 

Doubles and multis in desirable areas are flying off the shelf right now and a little snow or cold weather isn't going to affect the dedicated investors, LLCs, and hedge funds that are piling into this market. Columbus is raging hot right now and you can't drive down any desirable street where multi families exist during the day without hearing a saw or hammer.   

If your strategy is slumlording C- to F class properties in C- to F class neighborhoods, then yes, there's a lot of opportunity out there. However, any other decent upside area in Columbus is scorching hot right now. I am seeing any property with enough value baked in to turn a meager profit with 20%-30% equity going at asking price or greater. A lot of 1 day-on-market MLS sales. I was recently prepared to make a $5k-over-ask offer on a property and was told not to bother because there were already offers $25k+… 1 day on market. You will almost certainly have to go off market to get any property in an upside Columbus neighborhood at a value acquisition price.