All Forum Posts by: Yuko Tanaka

Agreed with @Stone Saathoff--that's one of the markets I'm eyeing. Passes the Bawa test with flying colors :)

Another upvote for Columbus, OH. 

I'm also in the process of market selection and have been following Neal Bawa's data-driven market selection system. It's a solid methodology--see here for a 60 min overview and here for his free Udemy course. 

While I haven't run the numbers on Evansville, I have on the other three. Columbus stands out. Its population growth, median household income, median property value, and crime rate all get an A+. Job growth isn't the stellar 2%+ that Bawa recommends, but it's decent at 1.5%. For a city its size, these stats are hard to find. 

On the Columbus/Cleveland point, check out the chart below. Cleveland has been losing population for the past 20+ years. Columbus's numbers go up as Cleveland's go down, which suggests that Columbus has been gaining some of Cleveland's lost population for the past two decades. As you may know, rentals will likely be in less demand in a market where the population is steadily declining because it'll have more housing supply.

If you're selecting between markets you don't know well (but where you plan to build a superstar team), I'd go with the place with more tailwinds and less headwinds.

@Damon Gainey Same here. I'm practicing deal analyses with the goal of getting my first property in Q4 or Q1 2021. Good luck!

@Matt F., thanks for the advice. Connecting with local property managers, wholesalers, and facebook groups is my next step. I've been honing in on a few cities (not St. Louis, but three other hot markets), and I've had a hard time finding any deals that make sense to invest in on the MLS. Now that I'm analyzing deals from the same few places every day, I see how the good deals would go very quickly!

@Donald S., you bring up some interesting points. I hadn't even thought about the 1BR / no kids angle. Investing from afar is tricky, and I do wish it made sense to invest in my own area--this would indeed be a great learning property. Thanks for the input!

@Damon Gainey, I haven't done a rehab myself and don't want to mislead you, but here's my best guess: You would replace some of the plumbing etc., but replacing it all fully would make the rehab cost balloon. That would lower your ROI, potentially to the point that going through with this deal would no longer make sense. I don't know what your floor is for ROI, but your current projected ROI is close enough to my floor (8%) that adding another $10-15k in rehab would likely bring it out of range.

I'd love to hear more experienced investors' perspectives on rehabbing and CapEx for 100+ year old homes. If you're seriously considering this property, I would of course get a general contractor to walk through the property and give an estimate of how much a full rehab would cost.

Fun analysis! Thanks, Damon.

@Damon Gainey, I think your maintenance/repair and CapEx percentages may be a bit low for a house built in 1916. With a 100+ year old house, I'd expect plumbing etc. to become major issues. I'm not sure what the right percentages would be and am curious about what more experienced investors would say. My guess is 10% CapEx and maybe 7% for repairs, but I do hope others jump in with their own estimates.

Might your rental estimates be on the lower side? You know your area better than I do, but I tried searching in the area and found that 2BD 2BAs go for around $1k. I think these units are 2BD 1BAs, but having one fewer bathroom wouldn't knock the rental value down 35%. Have you spoken with any property managers in the area about what they think these units would go for? 

@Bob Hines Interesting--I hadn't thought about it from that perspective. Makes sense that something sitting on the market for months wouldn't be a good deal. Lots to learn! Thanks for your input.

@Bryan Watson I bought the spreadsheet here. The layout is great and makes info easier to digest. It was missing some key metrics that I care about, so I've doctored it up considerably and have my own version. I would share, but the original isn't my intellectual property :(

City inspections--another great tip and something I haven't come across in my research so far. Thanks, @Sara Liskey. 

@Todd Pultz, thanks for the detailed answer. Finding solid quads under $100k sounds like a dream. They're nearly impossible to find in my stomping grounds (NYC), so it's good to hear that they exist in certain markets. 

Your analysis in #2 is spot on, and I appreciate that feedback. I hadn't thought about vacancy during rehab, and of course it doesn't make sense to undergo a major rehab when the ARV won't support it. Rehab numbers are a big blind spot for me, so I'm excited to try House Hacker Pro and learn how to estimate costs more accurately.

My initial plan is to aim for Class A/B locations, but I may revise that as I move forward. No doubt you can find great tenants in Class C locations, but like you said, harder to manage from a distance. 

@Max Householder--That second paragraph is gold, and I'm going to apply that plan moving forward. Are there any particular indicators you look for when picking locations? Good school districts, low crime, high rents, job growth? I'm planning on investing long-distance and am hoping to narrow down potential neighborhoods by analyzing statistics before I plan my visit.

@Matt Shaver, thanks for pointing out those costs. Utilities didn't even occur to me. 

This is my first post on BiggerPockets, and it's been so helpful. Thanks, everyone!