Brutus_buckeye

They should design this building in such a way that when Saks eventually closes, they can demolish Saks and essentially extend the 4th & Race project onto that site. If the parking garage could be extended onto the Saks site, you wouldn't need another curb cut on Race, like you would if the future Saks replacement is a standalone project. It would not be very easy to demolish Saks because the Hotel is right there. If you look at your photo. Saks is a 2 story department store. The third story that juts out over half of Saks is actually the hotel ballroom. I don't think the Hyatt would want to give up their ballroom for a redevelopment project very easily.

I feel like it rises up to a certain level and just has a hard stop whereas other buildings have a more defined top point, if this makes any sense, from my non expert background. While I would have loved a 30 story tower, I also see benefits to the lower building, plus it is not like it was replacing a taller structure and this building will be taller. However, a 30 story tower would block the Hyatt which would probably not be good for the hotel.

I used to do business in that building all the time. It was such a dump. Very dark and depressing building. I imagine it was very nice when it was built in the late 70's early 80s but it has not been cared for very well. It is pretty dreary in there too with the way the windows were designed. Almost feels like a prison.

^ I do think the Streetcar will surprise people and exceed expectations after the first year or two but it will probably be only a few hundred above expectations. EVen if it is under expectations, the benefits are more to the real estate that will get developed in the area because of the streetcar. I do think that was an interesting tidbit for the streetcar option. Could be a boon to the city to help balance the operating costs initially on it.

I like this better than the ill fated bridge climb on the purple people bridge they had a few years back.

Not to put a damper on those numbers, but 1) Isn't the KC Streetcar free to ride? That would affect ridership numbers and help drive them up. 2) and more importantly, the Streetcar has been open for about a month now, while ridership has more than doubled anticipated riders, remember this is such a small sample size and will likely go down once you take the sample out for closer to a year. hopefully is meets or exceeds expectations but I would be curious to see if it can maintain that same pace 6-8 months in. Plus, I assume ridership will dip come winter.

I don't think the Reds would want to add a surcharge to tickets to cover the cost of the people who ride the streetcar unless there was something in it for them. If the Reds average say 22k fans a game, assume maybe 10% would ride the streetcar on any given day, where does the ridership revenue come from (surcharge, or kick back to Reds, etc?) I cant see the city just eating the cost of free rides to Reds fans given the current operating environment, and given the politics involved, I don't think a lot of Reds fans (say those in KY and from the burbs) would want to pay a surcharge for the streetcar. Maybe tie it to bars in OTR. Give free rides on streetcar to Reds fans and the bars/businesses in OTR could cover the costs. They would be the ones who would benefit the most and need the ridership as it would be a far walk to go from Taft Ale House to the game. I don't think the places on Fountain Sq would want to join in such a thing because people walk there right now with little problem and I would not see that changing much with the Streetcar (I would never take the streetcar from GABP to Rock Bottom or Palomino, I prefer to walk, but I would take it to OTR in that case) That is just my initial thought.

Are the caps getting closer to happening? I have not really heard anything on the news about them lately, and it seems like they are a low priority on the list now. Has something changed?

Isn't W&S planning another tower for their HQ behind QCS?

Jake, isnt' Atrium III the 10 story building in front of Atrium II? Was this supposed to be a larger tower? I have seen the renderings for 2 Lytle Place in years past but I have never seen renderings for an Atrium III tower. Do you have any photos of these renderings?

http://regoddess.com/so-now-i-have-to-rent-to-felons-what-the-new-hud-rule-actually-says-about-applicants-with-criminal-records/ Interesting post about new HUD rules for screening tenants. IMO, I agree with her take on this. This is how we screen for qualified tenants. I am not overly concerned with someone who was convicted of a crime 25 years prior, has paid their debt, and led a clean life since then.

I think Norwood's main concern is Xavier students which is the need for the inspections. Some of these rules are legit from the cities but there are cases going around that challenge their ability to do this on Federal Fair Housing Guidelines. There is a case in Portsmouth where landlords sued the city in Federal Court a year or so ago fighting many of these types of provisions and the courts ruled in favor of the landlords that the city's policies were discriminatory.

Have you thought about joining your local REIA. The Cleveland chapter was not very busy but has been re-constituted recently and they are starting to be much more active. They teach a lot of different things from wholesaling, fix and flipping, landlording, rehabbing, etc. They also teach you how to do owner financing and also other creative strategies to acquire and sell property. I know the Cincinnati and Columbus chapters are very active. Cleveland is getting back up on its feet again but from what I hear starting to do good things.

I think Norwood and Pleasant Ridge are good neighborhoods for growth long term because of the spillover effect you mention. Also, Norwood has Xavier and its path of growth moves toward Norwood. My issue with Norwood is that their city council wants to try and balance the budget often on the backs of landlords. They like to do mandatory inspections of rental property to make sure you do not have a 10 people in a 2 bedroom apartment or house. They charge the landlord for these inspections and will fine you if you are not in compliance. That is my beef with Norwood. I like Pleasant Ridge from their spillover from hyde park/Oakley. Fairfax has good potential too. If you are a little bit riskier, I would even consider Madisonville. If you look at it, Madisonville is surrounded by Oakley, Mariemont, Indian Hill, Kenwood, and Hyde Park. As all these areas get more expensive, this is a prime area for gentrification because it is in the city, and presents more affordable property than the other areas, and it allows people who want to live near those areas an option that may be more affordable. That is just my opinion though.

To answer your question, we typically purchased 20-25% down and financed the rest. I prefer to finance my properties because you get a better ROI that way (I never do 100% financing that is not very safe) Sometimes we purchased on land contract with owner financing where we could secure good deals. Otherwise, we typically have used bank financing. For 2-4 family properties you could get traditional 30 year home loans from Fannie or Freddie. I have heard that Fannie and Freddie are trying to phase out of this product on the 4 family side so these loans may not be as readily available and if they are I hear they are requiring 30% down. If you go this route, it really does not matter what bank you go with because they sell it to Fannie or Freddie anyway. For larger properties, you want to use a local lender. Never use a big bank (like 5/3, USBank, PNC, Key, Huntington, etc) because their underwriting sucks and you cannot get as good of terms. They really don't want to work with you on this. Use one in the local area where the building is located. If you are buying in Wooster, OH, use a Wooster based bank. Small local banks are better because they make decisions quickly and can move through underwriting quickly. In Cincinnati, for a couple properties, we have used a bank called Valley Savings out of Reading. They are a one branch bank, but they are good at lending on investment real estate. They make decisions quickly and have good terms. We looked at a property in Adams county a year ago, and if we would have purchased it we would have used the local lender out there because they were familiar with the property. This is the key to getting the best terms on a loan for an investment property. Jake - to answer your question, we did target properties in stable working class areas of Cincinnati (Deer Park, Cheviot, Norwood, Pleasant Ridge, etc.) but it really does not matter. We do not have the money to compete for the luxury class apartments, but there are plenty of nice apartments that are older that cater to middle class and working class individuals. The key is buying for cash flow. The riskier the property, the better cash you will make on the property. People who are buying in Westwood, or some areas of Price Hill make a great return if they manage it right, however, they are likely to have additional costs and more collection issues because of the area of town. That being said, if you price that factor into the deal, it is still able to be a successful venture. Another thing about that is on those properties, Section 8 is a good program to be involved with because you have decent tenants and 2/3 of your rent will always be deposited on day 1, which means you only have to track down a little bit. Also the tenants are good payers for the most part because if they default they get kicked out of the program. I do not do much section 8. I have done some in the past. I have a number of friends who love the program and rent most of their units this way. I know you have places in Clifton. College property is very good and Clifton will always be a good location because there is always people looking to rent there. If you have 7-10 houses there, you can make a decent return, so long as you purchase them right with cash flow in mind. If you go outside of Clifton, be careful on certain neighborhoods. Norwood has inspection ordinances and taxes that make it a pain. NKY has some rules regarding trash collection taxes on apartment owners and pet liability that make it tenuous there right now. However, there are plenty of good areas in Cincy to invest if you find the right place.

I purchased my first 2 family in 2006. I used the proceeds and joined a partner to get a couple 4 families 2 years later. At the same time I had another partner where we purchased some 2 families on the cheap at UD to serve as student rentals. Pretty much, with the exception of small distributions, most of the income was reinvested in the next property to get a more critical mass. We have sold some small properties along the way and used the money to trade them for bigger properties that would produce more cash flow (and provide tax shelter). I have had partners in these so I have not done this completely alone, so that has helped. We did not get to 100 units until this year (the 100 units is aggregate for me, as I have different partners for some of them) I started out with 2 and 4 families because I felt I wanted to get a feel for multi family management (plus my funds allowed me to start there to minimize the risk) We bought properties for cash flow and had a few bumps along the way with some bad tenants but we learned that which has helped us on bigger properties. The bigger properties don't run much different than smaller ones (in fact they are easier because of the units are centrally located instead of spread out) but starting out with a larger place was also intimidating on a certain level too. It took me about 5 or so years to feel comfortable getting into larger commercial grade property. With 10 units it typically involved about 1-3 hours of work a week. Again I did not do the repairs (I am pretty bad with a hammer anyway) and hired them out. Since I had a day job, I worked to schedule them when the tenant would be home to take care of it, and I would just take care of the bill. As you get more tenants, you have more requests and more time involved.

For our apartments we just started using Buidium. It is a bit more robust than I really need right now (they cater to that 500+ unit market) but they were cost effective. Prior to that I used quickbooks and excel which was very effective for a smaller portfolio

I purchased multi-families, we are up to over 100 now but by 50 units it was becoming a stretch to manage by myself and maintain my day job. I probably could have done it, but it makes the process more challenging at the beginning when you bring on a new property. We also have a few storage and retail centers and the big thing I learned was that it is good to invest in a property management system semi-early on. The better you can systemize things the easier it is to scale.

We just hired a property manager for apartments but we had one for our commercial stuff a few years ago. We have never used a 3rd party firm because it takes away a lot of your cash flow. When I say those returns, they were over a 5-6 year period and a return. Buying a cash flowing property at say an 8-11 CAP with around 20% down and a 20 year Amort. You can get a 20-25% return on your cash over that period if you manage it properly and work to raise revenues. Over 5-6 years you pay your principal down by 25-30% and if you raise your revenues by 20% you raise your sales price considerably too. This is how you can get those returns. Also, it can be done in a tax advantaged way too upon the sale. If you hire a 3rd party manager, it will eat away all your cash flow. We have our manager in house so the costs are much more manageable (we just pay her salary not additional profit margin for the manager). Even before I hired a manager and had my day job, I never did any maintenance work myself, it was easier for me to get a handyman and pay them or a plumber to pay them to do the work than for me to do it. I outsourced lawn care. I did the leasing and often met people after work or on my lunch hour. I never took calls in the middle of the night and I very rarely had to do an eviction. Yes, it was an additional 5-10 hours a week as I got more units but I am sure you spend that much working on your stocks.

I am not saying it cant be done, I guess with the development of the condo tower on the other side of the street, I think a similar project would work well here too. As far as redevelopment, of course it can be done, but it has to be economically profitable for the developer. I don't see that yet and the more time that goes by the more expensive it becomes and the property deteriorates more. I think ultimately, the only way to get something dnoe in the near future is to have public money but I don't think that is the best use of taxpayer dollars for this building It is just not a signature enough building to warrant that.

While I disagree with a lot of aspects of the editorial (i.e. that an office tower will be built on the site). I do not have a problem with tearing the building down. It is going to be a very hard redevelopment project, and while I don't see an office building on that footprint, I could see a condo tower development in conjunction with something on the existing parking lot now. I just think that the building is going to continue to sit and rot for another 10 years because of a lack of a viable plan to use it, and at the end of the day, it is going to meet the fete of the wrecking ball when all is said and done.

I agree with some of your sentiments but I also feel real estate investing has a lot of hidden potential for better growth than you can manage with stocks. I started investing in apartments 9 years ago starting with a duplex and have built up a decent sized portfolio. The reasons: 1) (and this is just my preference) is that you purchase a stock and, no matter how much you may do your homework, unless you have enough money to purchase a significant stake in a company, you are essentially a free rider and cant control the factors that would lead to the profitability of the business. In addition, you are at the end of the line to know when bad news happens because the larger institutional investors can move the market with their purchases a lot easier. 2) With real estate I have full control 3) Real estate is an inefficient market and you can use inside information to your advantage (this has helped us on a number of purchases) 4) Real estate is a great inflation hedge 5) There are tax advantages and shelters in real estate to help your returns that you cannot take advantage of in stocks. 6) I like owning a tangible piece of property where I can help make things better for my tenants by providing them a quality place to live and looking out for their interests. and 7) Your tenants will pay your mortgage for you. Yes it is some work, but on every property we own or have owned, we are getting returns in the 25-50% on our money on a year over year basis when you factor everything else. I treat real estate like a stock in a mature corporation. It is essentially a dividend paying stock in a company that also has the ability to grow in value like a growth stock (if it is the right property) and if you plan right, can be sold with little or no taxable gain.

There is nothing wrong with going to a State school. In fact, there are a lot of fools who go to very expensive private schools and graduate heavily in debt. It may open a door or two initially, but beyond the first couple of years, it does not really mean too much in the career. There are a lot of successful people who graduate from Ohio U in the world, and there are a fair share of failures who graduate from Harvard.

I hope it is Charlotte

Charlotte is an annoying airport. The only airport I have ever been to with bathroom attendants. It's a transportation terminal, not a nightclub! I stil don't see the benefit of the Charlotte hub anymore. Philly, DC, Miami and Charlotte on the East Coast for American. The other 3 cities are much better gateways than Charlotte. I would not be surprised to see that airport dramatically shrink in the coming years with the other East Coast hubs.