Learn me: CHEAP Ohio Real Estate

trigun7469 said:

I was house hunting in suburban houses in 2021-22 in Cleveland and surrounding. There some money and investments being made.  I was also looking to setup an auto repair shop in one of those areas that are "rejuvenating".  One person owned a lot of the property in the area, they bought cheap did nothing, cash grabbed covid money then sold the property for a profit.  There is some cheap property that can be purchased and a mayor that is seeking some building add Covid money.  The negative of those cash grab is it increases rent and hurts those that are lower income. I work in University circle and Cleveland Clinic, University, ect... are basically demolishing all the houses and putting fancy high risers, there is some investment if you bought cheap, rented for a while, and waited for CC or University to purchase you out is another avenue for possible money. $900-$1100 sounds high to me but the housing market has pushed some of the rents up. Just like the stock market eventually there is going to be a downturn.

Great info and thank you.  What are the rents you are seeing in the 80k-120k SFR? Are there some areas you like vs you don't like?

calteg said:

mtn said:

Paging Mr. Culberson, Mr. Culberson to the courtesy phone please...

 

Every time I've done this analysis, no matter where it is, I always come to the conclusion that it either requires a lot of work on your part, OR enough capital to scale it immediately and hire people to do the work for you. Otherwise, there are better places to park my money. 

This is not saying that you cannot get wealthy doing this, and it is not saying that it is a bad investment strategy, and it very well could be a superb investment strategy... But it is either going to take a lot of work and time, or a lot of initial outlay of capital, for it to match other, more passive forms of investing. 

That is just my experience in this stuff. I don't have a ton of time to put in work, I don't have a ton of ability in terms of fixing E36 M3 around rental properties, and I don't have the capital to play with commercial buildings or large scale operations, at least not right now. 

 

 

I came to the same conclusion. Rather park my money in a Vanguard dividend ETF, get my 4.5% return with zero hassles. 

I also have serious misgivings about lower income rentals. Neighbor across the street rents his house out for $3200/mo. Current tenet chain smoked inside the house and put holes in the drywall. Tenet before that caught half the house on fire during a BBQ and vanished in the middle of the night. This is a $500k house in a decent neighborhood. I can't imagine tenet behaviour in a house that costs a fraction in Ohio...

Yes - that is the 100% fear. I have been in the tenant business 16 years, and the demo I deal with (mostly disney/jpl executives) etc we don't have those issues.  We have ventured into airbnb, higher rate areas, and we have also done a lot of movie rental and executive STR and insurance STR which have been fantastically profitable. 

But as you said - we are targeting and have been very successful with a very slim demo.   

This is more of a thought excercise to see if changing the demo is worth it. 

eastsideTim said:

I live in an suburb/exurb of Cincinnati, and my 3 bedroom split level is worth about $225-250K, but I don't know what it would rent for.  I think my nephew pays about $850 a month nearby for a 1 bedroom apartment with a den.  Inside the city, you are unlikely to find any bargains, but go to some of the surrounding towns, and it is possible.     If you are looking for potential areas, Hamilton and Middletown have somewhat dense single family housing, and are an area where a lot of people can't afford a down payment on a mortgage, so end up renting.  There are other areas nearby, too, but the logistics of hiring the same people to do all the maintenance and management may not work as well.

As a general rule, property is a lot cheaper in Ohio than much of the rest of the country, but it should be noted that income is also lower than average, so there is a much lower limit to what people can afford.

Edit:  Inside and near the city limits, there are quite a few duplexes and quadplexes, and they used to be the big thing for small time investors, as they could buy a quadplex, live in one of the units, and have rent from the other three cover their expenses.  Not sure if that is much of a thing around here anymore, or if the real estate investment companies have bought most of them up.

Hamilton is interesting. $80k-550K. 

Middletown seems much cheaper on average. Very different than Akron no doubt. 

Unsold for 200+ days. $1400 rent for $115k https://www.redfin.com/OH/Middletown/1027-Hughes-St-45042/home/77526962

Shadeux said:

You want cheap land? Just find where people don't want to live. Works every time!

Downside: You have to live there. 

LOL. Yeah I have lots of that here out west. They can't give it away for free. 

SV reX said:

In reply to mr2s2000elise :

I'm always interested in learning more. 
 

PM me with some info

I will send you some details tomorrow. 

Short form: was a very successful business. New owner  (14 years ago) decided to run it into the  ground. Made it section 8 etc. I bought it cheap (1.7). I have another 1.2 into it with repairs and making it all functional again. No loans. Excellent paperwork. Its respectable now. It needs another 250k probably to make the rest of it perfect.  Fed made it almost free for me.  You can franchise it, and get good money, or run it as is.

-I have EB5 knocking down my door for it.  

-I have a friend in FL who has 7 units he runs, and is very interested. I will send you some more details via email tomorrow.

I've found with lower income area rentals you're better off with a unit building vs a few houses. Give someone reduced rent and a paycheck to be the building manager, and they watch it for you, plus harder to really damage them vs a single family house. 

Steve_Jones said:

I've found with lower income area rentals you're better off with a unit building vs a few houses. Give someone reduced rent and a paycheck to be the building manager, and they watch it for you, plus harder to really damage them vs a single family house. 

Agreed. Wherever we have distant larger units, we have found, exactly as you said. I provide free room/board for them to manage, and they are often very happy to do it. 

Something like this: https://www.redfin.com/OH/Akron/115-Westmoreland-Ter-44302/home/182581074

In reply to mr2s2000elise :

Middletown is a steel town that had a major downturn when a lot of industry left, but it seems like it is on the cusp of coming back.  Being situated between Dayton and Cincinnati makes it a convenient-ish and cheap place if you want to commute in either direction on I-75.  Hamilton is a bit more convenient to Cincinnati, and as you have noticed, property values vary widely.

As far as avoiding, most anything inside the city of Cincinnati, but specific neighborhoods to avoid would be Elmwood Place, Avondale, East Price Hill, Bond Hill, and Corryville.  Westwood goes back and forth on whether it is a safe place to live, so I'd avoid it, too.  The West End and Norwood are interesting possibilities, both neighborhoods are slowly gentrifying, so if you are looking for something with potential for a price increase when you sell, that may be a place.  However, a lot of the good deals may already be gone, and it wouldn't surprise me if anything there will require some more attentive management.

Oh, and while I wouldn't look for single family homes in these areas, if you aren't averse to small apartment buildings, Mt Carmel, Batavia, and Amelia would not be bad places to look.  Delhi had been down for a while, too, but it seems like money is starting to be thrown around to revitalize it.  Probably no bargain basement prices, though.

In reply to mr2s2000elise :

That listing is interesting, look well kept, has the income history and existing tenants. 

My wife's cousin did something like this in Chicago.  Buy cheap homes, renovate. Then keep for himself or sell to an investor from the west coast. He had a management company that got tbt tennants and repaired them.  He did well, but not amazing, up until cancer took him. 

mr2s2000elise said:

Snowdoggie (Forum Supporter) said:

 

I would love to find a place in the desert somewhere in the middle of nowhere. Somewhere where I can walk the dogs at night and see all the stars in the sky and the mountains in the background. Someplace where I can hear myself think. As Steve McQueen once said, "I would rather wake up in the middle of nowhere than in any city on earth.

 

 

I have the perfect place for you. If you want 5 acres or 150 acres, I have exactly what you describe. When you are ready hit me up. Cheaper than most of the cars GRM people have in their driveway ;)

Sounds interesting. 

What about near wherever Wright-Patterson AFB is located?

Here I thought you were looking to buy in East Palestine 

I am in northwest Ohio. So the other side of the state from Akron. Just guesswork but around me I see single family houses maybe 1,200 to 1,500 square feet go from 650 to maybe 900ish a month. 
 

A developer also just built a neighborhood of age 55+ condos I think they are either one bedroom or two and go for about 1,300 to 1,500 a month rent.  They are just built on a slab, renter pays ultilies. I think they are about half full, they have been available to rent for about a year. 
 

I don't know how much inventory is available  but the town near where I live, Findlay Ohio I think is pretty nice overall and still growing. 

In reply to Fueled by Caffeine :

I know some people who became wildly wealthy doing this in Chicago. I think it comes down to what you are rather than what you're doing. What I mean by that is, are you a business owner, a contractor, a property owner, a landlord, or a speculator. None of these are mutually exclusive, and you can easily be all of them... but the guy who is a business owner first will probably end up with more financial success than the rest of them. 
 

Some other general thoughts on this:

• I mentioned that this is too much work and the need for more capital to be able to scale it. This is my experience. I've looked in 3 places, and with my situation it never made sense. I have, however, tried to buy into a group of 4 friends who are doing college rentals - spread the work, spread the capital. I also am invested partially in Reits. I like the idea, it's just a difficult one to implement FOR ME and my risk appetite.
• People like me bring up stuff like this. I feel like diversification is never mentioned enough as an opposing view.
• Land is always going to have some intrinsic value. There is a lot to be said about that.
• Make sure you get a building with a shop. Because you need a lift. Or the GRMers in the area will need their friend to have a lift for them to use. 
   

I have 6 or 7 houses/duplexes in Toledo I might make a package deal on. Here is my take on Ohio real estate. Its value will keep up with inflation and that is about it. My brother mentioned that in Toledo you can't even ask a person where the money is coming from to pay the rent, essentially everything is Sec 8.

I did a quick calculation on a piece of property we have in the CBD of a suburb(Oregon, Ohio). With some new development in the area we may be able to sell it and get more than all the taxes we've paid in the 58 years we've owned it. Dad bought on the wrong side of town on that one... Toledo suburbs to the south and west grew more, you win some, you lose some.

In reply to mr2s2000elise :

You mentioned Mammoth...curious about your thoughts on AirBNB viability in park city, UT? I have a friend that might be putting his condo up for sale. Seems tempting, but chatting up the locals, it seems the ski season is getting shorter and shorter every year... 

In reply to mr2s2000elise :

I like Lakewood, Ohio it is a hipster area with a steady flow of tenants. In your price range you would be renting a Condo, the houses average $240k. Pro of a Condo is that it theoretically is little maintenance, panting, plumbing and condo fee. Rent averages $1k. Otherwise you are looking at section 8 in that price range in Cleveland.

I live in Columbus. It's growing, but still sane. Everywhere I've looked on the East Coast that I'd consider relocating too is significantly more expensive. Houses in my fairly nice, but not trendy neighborhood are generally in the mid-$200's for 3 bed, 2 bath, 2 car garage houses built in the 80's and 90's.

If you wanted to start an investment... Intel is building a new massive campus East-Northeast of Columbus. Property values there are still pretty low, but the development is starting in preparation for the massive influx of money. I live in the northeast corner of Columbus, and I'm expecting our housing prices to jump significantly when that kicks online.

But who knows how long that will take. I wouldn't take on that kind of investment with hopes of getting rent payments within the year. I'd do that expecting large returns in 5 years.

jgrewe said:

I have 6 or 7 houses/duplexes in Toledo I might make a package deal on. Here is my take on Ohio real estate. Its value will keep up with inflation and that is about it. My brother mentioned that in Toledo you can't even ask a person where the money is coming from to pay the rent, essentially everything is Sec 8.

I did a quick calculation on a piece of property we have in the CBD of a suburb(Oregon, Ohio). With some new development in the area we may be able to sell it and get more than all the taxes we've paid in the 58 years we've owned it. Dad bought on the wrong side of town on that one... Toledo suburbs to the south and west grew more, you win some, you lose some.

I am all ears. Never hurts to explore.  Send me a message. Especially since you don't know if you have 6 OR 7 houses..... that is a 1st world problem right there. 

calteg said:

In reply to mr2s2000elise :

You mentioned Mammoth...curious about your thoughts on AirBNB viability in park city, UT? I have a friend that might be putting his condo up for sale. Seems tempting, but chatting up the locals, it seems the ski season is getting shorter and shorter every year... 

Park city is a good find. We have looked at some commercial property in UT, since that is a large part of our portfolio.  We currently don't have the manpower to scale up in UT as my local connection is not very strong, from a labor part of view. Key to airbnb or service business we are involved in - is labor.

My mammoth isn't about ski season at all - that is what people think. I am overbooked in Mammoth all year - thus we are increasing our footprint.  My "summer" rental price average is already profitable. When it is ski season, we charge 4x and we are solid booked. 

That is the same with our MT hotels. People always ask me "it is so cold in winter, and places are empty, what do you do to stay in business?"  The prices in the summer are so high, we charge our Canadian neighbors, that if I was empty for 7 months, we would still be very nicely in the black. Our non summer (off season) occupancy in MT is 73%.  Dead of winter we are at 45%.  To give you an idea, we charge 85$/dead of winter. We charge 550$ peak summer, same exact room. We can't keep up. 

Mountain towns, especially those surrounded by national forest and non-developable land, will always bring a premium. 

Here in Flagstaff our summer months have actually been better for tourism, due in part to all the people from Phoenix who come up here to escape the heat. Snow play certainly still draws people in, but the majority of that traffic is day-trippers. 

Our real estate market then gets hit with demand from all sides - we've got the college and high rental demand from that, the high demand on the housing market from "university families" - ie, people buying property for their kids, and then all the tourism traffic propping up STRs. 

I've thought about investing in some property near my BIL in Pittsburgh. We go back at least once a year. My wife would like to go back more often. My BIL could manage the place alongside his current rentals, but property in Pittsburgh is cheap and plentiful. My BIL has no intention of making any money off his properties when he sells, he's all about future cash flow. His goal is merely keep the places standing and pay them off as quickly as possible so he can live off that cash flow. Although he's got so many kids (8) they might all live in his properties eventually anyway! 

I'm not sure I want to wait 10-20 years to see that cash flow. 

eastsideTim said:

In reply to mr2s2000elise :

Middletown is a steel town that had a major downturn when a lot of industry left, but it seems like it is on the cusp of coming back.  Being situated between Dayton and Cincinnati makes it a convenient-ish and cheap place if you want to commute in either direction on I-75.  Hamilton is a bit more convenient to Cincinnati, and as you have noticed, property values vary widely.

As far as avoiding, most anything inside the city of Cincinnati, but specific neighborhoods to avoid would be Elmwood Place, Avondale, East Price Hill, Bond Hill, and Corryville.  Westwood goes back and forth on whether it is a safe place to live, so I'd avoid it, too.  The West End and Norwood are interesting possibilities, both neighborhoods are slowly gentrifying, so if you are looking for something with potential for a price increase when you sell, that may be a place.  However, a lot of the good deals may already be gone, and it wouldn't surprise me if anything there will require some more attentive management.

Oh, and while I wouldn't look for single family homes in these areas, if you aren't averse to small apartment buildings, Mt Carmel, Batavia, and Amelia would not be bad places to look.  Delhi had been down for a while, too, but it seems like money is starting to be thrown around to revitalize it.  Probably no bargain basement prices, though.

I really appreciate you providing some locations, that will be very helpful in my research. Much appreciated. 

I also really enjoyed your use of "attentive management" 

Steve_Jones said:

In reply to mr2s2000elise :

That listing is interesting, look well kept, has the income history and existing tenants. 

I spoke to the owner at lenght. Ad shows "$230,000" but he is asking $1M. He sent me books for 20 years. 

Its 9 units. He lives in 1. Gross 100K/year. Tax+maint = $20k a year.  78K a year, on 1M. Thats the easy number

yupididit said:

mr2s2000elise said:

Snowdoggie (Forum Supporter) said:

 

I would love to find a place in the desert somewhere in the middle of nowhere. Somewhere where I can walk the dogs at night and see all the stars in the sky and the mountains in the background. Someplace where I can hear myself think. As Steve McQueen once said, "I would rather wake up in the middle of nowhere than in any city on earth.

 

 

I have the perfect place for you. If you want 5 acres or 150 acres, I have exactly what you describe. When you are ready hit me up. Cheaper than most of the cars GRM people have in their driveway ;)

Sounds interesting. 

What about near wherever Wright-Patterson AFB is located?

 

Dayton OH--no clue about it... be happy to look if yiu have leads or info

Robbie (Forum Supporter) said:

Here I thought you were looking to buy in East Palestine 

Why do bad things always happen to places with words east in them or east part of town? Probably for another thread...