Ohio a good place to buy then rent out?

[Dell Investor]

RBallard,

Just curious but how is the Greenridge section holding up these days?

[rballard]

Greenridge is definitely the nicest part of Scranton. There a few houses scattered about that could use some fixing up, but for the most part it's a nice area. Scranton is mostly full of renters, but Greenridge attracts buyers, due to its nice Victorians and Cape Cods. In fact, I saw in Greenridge the other day that they've started building some condos... based on the starting price (I think it's like 220k) they should be pretty nice. I can't tell exactly how many they're building, but it's a base of five... nothing on the sign to indicate if it's just one row.

[[email protected]]

Mike (PropertyManager),

Thanks a lot in helping me understand this game (Not that I understand it fully anyway now).

Couple of Q's for you:

1. Why do you borrow all your loans with a 20 year term ?

2. What percentage interest did you figure for that Mortgage ?

3. When you say 19000 is NOI with gross rent of 25000, that means it costs you 6000$ to do maintenance and other nuisance of maintaining the property? Are these repairs mainly ?

4. How many hrs per week, per day, per month does it cost you to hold this property?

5. "Throw in the added expense for maintenance that you'll be paying, higher insurance for student housing and drunken students trashing the place on a regular basis".

Is this cost not included in 6000 $ mentioned in 3 above ?

6. Do you do anything else as well other than maintaining this property (and other properties) as well, I mean do you have another full time job as well?

See, I am not a very handy man and 'will' need someone to do all this. What that means is that I will have to get properties at cap rate of 30 to 35 % in order to make any money.

With pros like you working at 20% cap rate, I do not see any chance of survival out there  

Are cap rates for commercial different than residential. Somone sent me some comercials which are leased and occupied with cap rates of 10% etc. Is this a different animal ?

Sunny

[[email protected]]

Pat,

I am assuming, these are %age on Gross rent , right ?

Pardon me if I am too naive to make following statement.

Wondering, if rentals bringing in  8 to 10,000 a year are worth the effort.

Why not buy a pre-construction and sell it for 8 to 10,000 $ in Florida or soeting else ?

Sounded like too much work and stress for 8 to 10K as Mike (PropertyManager) explained.

Only if I can find someone to partner with to do the work and I can be a sleeping partner  


Sunny

[Jeff Pitcrew]

I'm sorry, but it's illegal to invest in Ohio.

[kdhastedt]

LOL...stop Mike, you're killing me!  I think it's illegal to investg here, too!

Keith

[propertymanager]

Sunny,

In answer to your question:

1. I buy all my properties on a 20 year term so that I will get them paid off sooner.  Once they're paid off, then you're really making some money!  
2. Currently, I'm expecting interest rates of 7.25% for investment properties (no points).  
3. With gross rent of $25,000 and NOI of $6,000, that means that expenses are $6,000.  Expenses include taxes, insurance, maintenance allowance, utilities paid by the owner, management fee (if any), vacancy allowance, etc.  It does not include abnormal damage such as tenant destroying the house.
4. If you mean how many hours per week do I spend working on any given property - none.  Once the properties are rented, you don't have to do much unless there is a problem.  However, I do work many hours per week rehabbing new acquisitions, cleaning out vacated properties, etc.
5. No - see #3.
6. I don't have a job and thankfully haven't had one for about 15 years.  

You don't need to be very handy - you can learn.  Prior to becoming a landlord, I had never changed a toilet.  Now I can change one in my sleep - really - without even waking up!  Seriously, go to Lowes and get their home repair manual.  It contains everything you need to know to be a hands on landlord.

Commerical properties are a completely different animal.  They can be very profitable, BUT they can stay vacant FOREVER (or close enough to it to make you cry BIG tears).  

See you at the REIA meeting!

Mike
 

[propertymanager]

CORRECTION,

In my last post, #3 should have said:

3. With gross rent of $25,000 and NOI of $19,000, that means that expenses are $6,000.  Expenses include taxes, insurance, maintenance allowance, utilities paid by the owner, management fee (if any), vacancy allowance, etc.  It does not include abnormal damage such as tenant destroying the house.

Sorry for the confusion.

Mike

[[email protected]]

Thanks a lot for the clarification Mike.


I unfortunately still have a job (Software Consultant) and an IT Company to run with investments in INDIA as well. I have to be very carefull on how much do I take on.

Would love to do some joint ventures though

See you today evening REIA


Sunny

[cecsix]

i think metro columbus is a great area, especially for a beginner like myself.  you aren't going to make a boatload on appreciation, but you can buy good cash flow properties that are pretty easy to rent.  

i've thought about investing out of state, but it doesn't seem very realistic.  you have to have great trust and faith in somebody in the local market to partner with IMO.  

[[email protected]]

Cash FLow sounds good to me. As long as I do not get called to fix an overflowing toilet

Sunny

[Jeff Pitcrew]

Better build a management fee into your price then <g>

[[email protected]]

You are right Mike.

May be I should partner with someone for foreclosures or something.

[MarkB]

Carlosgut,

Ive been a Real Estate Investor In the Cleveland and Ohio area for over 20 years. let me know what type of properties you're interseted in and I will let you know the better areas to purchase property and give you some names of local realtors who can help

Mark

[Bffw]

I am in a partnership with another out of state couple.
There are making a 6% return on their investment with postive cash flow and equity build up of about 10-15 % a year.
He is a Doc and I do all the maintance and managment myself.
I am a contractor by trade.
Kansas City has plenty of deals.
Depends if you are a tire kicker or a doer.