Analyzing a Potential BRRRR Deal in Dayton, Ohio
Introduction to the Deal
In the new video, Josh Baldovino discusses a potential BRRRR deal in Dayton, Ohio, where a house is listed for $70,000 with an ARV of $200,000. Josh expresses skepticism about the deal and decides to analyze it further to determine if it is a viable investment opportunity.
Tina and Josh, a California investor, they discussed potential real estate opportunities in Dayton. Josh, who has experience in Columbus, is looking to expand his portfolio to Dayton but is unsure about the neighborhoods and property management in the area. Tina, while not from Dayton, mentions the university area as a potential hotspot for rental properties due to the student population.
Key Takeaways:
1. Validate deals thoroughly before investing to avoid potential losses.
2. Use real estate calculators to analyze potential cash flow and returns.
3. Consider long-term rental options if a property does not meet Burr criteria.
4. Research market comps to determine accurate property values.
5. Consult with local property managers for insights on specific markets.
Initial Assessment of the Property
Upon reviewing the pictures of the house, the speaker notes that it appears to be an active rehab project with a clean interior. The basement is finished but outdated, and the mechanicals seem to be in good condition. Despite these positive aspects, the speaker questions the accuracy of the $200,000 ARV.
Conducting an ARV Analysis
To validate the ARV, the speaker pulls up the zip code on Redfin and looks at comparable properties in the area. After filtering the search criteria, the speaker finds that none of the comps meet the $200,000 ARV requirement. This leads the speaker to conclude that the property may not be suitable for a BRRRR deal.
Evaluating the Property as a Rental
The speaker then shifts focus to analyzing the property as a long-term rental investment. Using a rental calculator, the speaker determines that the property could generate a 12% cash-on-cash return and positive monthly cash flow. This suggests that the property may be better suited for long-term rental rather than a BRRRR deal.
Final Assessment and Recommendations
After running the numbers through a BRRRR calculator, the speaker determines that the property would not be profitable as a BRRRR deal due to higher monthly expenses. The speaker advises leaving the property as is and ensuring it is clean, safe, and ready to rent. Additionally, the speaker explores comparable properties in the area to gain further insight into the market.
Seeking Expert Advice
To gather more information about the Dayton market and the specific property, the speaker plans to contact their property management company in Dayton. By consulting with local experts, the speaker aims to make informed decisions about the potential investment opportunity in Dayton, Ohio.
Exploring Alternative Investment Strategies
As I delved deeper into the details of the potential BRRRR deal in Dayton, Ohio, I realized that the property might not be the ideal candidate for a quick flip. The initial assessment of the property revealed some positive aspects, but the discrepancy in the ARV raised red flags.
Considering Long-Term Rental Potential
After conducting an ARV analysis and evaluating the property's potential as a rental, I began to see the value in exploring alternative investment strategies. The rental calculator indicated a promising cash-on-cash return and positive monthly cash flow, pointing towards a more sustainable long-term rental approach.
Making Informed Decisions
As I wrapped up my analysis and recommendations, it became clear that the property's profitability as a BRRRR deal was questionable. Instead of rushing into a risky investment, I decided to take a step back and seek expert advice. By consulting with local property management experts in Dayton, I aimed to gain valuable insights and make informed decisions moving forward.
Insights on Property Management and Neighborhood Stability
Tina reveals that her team manages around 25 properties in Dayton, with a focus on maintaining quality rentals. She also highlights the differences between Springfield and Dayton, noting that Springfield is cracking down on rentals, leading to improvements in the area. Tina emphasizes the importance of having a trusted team in place to handle property maintenance and leasing, ensuring the properties are well-maintained and attractive to tenants.
Exploring Rehab Costs and Contractor Options
When discussing rehab costs and contractor options, Tina mentions that their maintenance team handles minor repairs, but for heavy rehab projects, they work with external contractors. She advises Josh to be cautious with heavy contracting work, as it can quickly escalate in costs. Tina also shares a property listing in Dayton that requires significant rehab, indicating potential for a profitable investment with the right team in place.
Seeking a Trusted Team for Acquisitions
Josh expresses his interest in finding a trusted team for rehab projects outside of Columbus, as prices in the area have become increasingly competitive. Tina offers insights on stable neighborhoods in Dayton and Springfield, highlighting the potential for successful investments in these areas. As Josh continues his search for contractors and rehab opportunities, Tina provides her email for further communication and potential collaboration.
Exploring Opportunities in Dayton
As we delved into potential real estate opportunities in Dayton, I shared with Josh my thoughts on the university area being a hotspot for rental properties due to the student population. With my team managing around 25 properties in Dayton, we prioritize quality rentals and emphasize the importance of having a trusted team in place for property maintenance and leasing.
Final Thoughts on the Investment Opportunity
In conclusion, after analyzing the potential BRRRR deal in Dayton, Ohio, it became clear that the property was not suitable for a BRRRR strategy due to the lack of potential for a significant increase in value. However, as a long-term rental property, the house showed promise with a 12% cash-on-cash return and the potential to generate a steady monthly cash flow. It is essential to thoroughly analyze the market, property condition, and potential rental income before deciding on the best investment strategy.
The conversation between Tina and Josh sheds light on the property market in Dayton and Springfield, emphasizing the importance of understanding neighborhoods, rehab costs, and finding reliable contractors. As a California investor, Josh is seeking acquisitions and a trusted team for rehab projects outside of Columbus. Tina's insights on stable neighborhoods and property listings in Springfield offer valuable information for Josh's investment decisions. If you're looking to invest in real estate outside of Columbus, consider the tips shared in this conversation for a successful venture.
