Invest in Cincinnati

[restorationconsultant]

First of all the rules and cost are very different here in the US. The average cost of residential rehab (not restoration) is 50.00 a square foot in Cincinnati.( just stabilization of a vacant building will run you 14-15.00 per square foot.

For multi family it is much higher as you have more kitchen and bathrooms. You also have wired in smoke detectors and sprinkler syetem as well as ADA complience regulations that may require things like elevators and wheelchair accessability.

You have Permits which will run SEVERAL Thousand dollars alone. If the building is vacant and has been vacant for any length of time it may have city repair orders against it and it may require a VBML (Vacant Building Maintenence License) and you will not be allowed to pull Permits until you pay the License fee which is 900.00 per year and goes up the longer the house is vacant. Many houses and apartment buildings in Cincinnati have condemn orders against them and this does not show up on a title search because the city doesn't file liens on VBML or Condemn orders. So you can buy a house or building only to find out it is condemned because the title search doesn't show it.

In addition to permits you will need to submit blueprints on a total rehab, especially if you have floorplan changes. Expect Architectural fees between 5-7,000.00.

Remember 50.00 a square ft is rehab costs, The basics. To do Anything nice expect to pay 75-90.00 a square foot. I do historic restoration work and it typically runs 100-150 per square foot. I am spending 185,000 to restore a small 3 bedroom cottage for myself.

A 13 unit building is going to run you 300-400 grand (probably more) in order to get certified for occupancy and permits finaled.

I deal with people all day who have NO CLUE what things really cost. If you bought a multi family in Cincinnati , I suggest you talk to City Building Inspections and Services to find out if there are orders against it.

The city demoed a house yesterday that had a signed, accepted sales contract ( shown as pending in the MLS) that was awaiting closing. The demo order was over two years old and the previous owners did not do the required repairs so the city demoed it.

Things are VERY Different here.

[cromada]

I´m in contact with the city inspectors, there are no liens or demolishing against this house. City inspectors dont look at the MLS, if no one make a contact with them, so the house goes to demolish.

The contracted house is vacant since 2007, I have sent a appraiser and three remodelling companys to this house, the highest estimate was $132k for the rehab (include all permits) the lowest $114k. All remodell companys are longer in this business and are bbb.org approved. Can three intependent companys be wrong? I see no problem here. A 15% surcharge for the rehab is planned.
The house has a "as-is" value of $105k, the after repair value (ARV) is $320k. If I guess your $50/sqf. for the 9,250 sqf. house I come to over $460k, only for the rehab, for this price no one will invest.
In Germany we have a average new construction price of 125 Euro per square meter, a square meter is 3x more than 1 sqft.

I look forward to the near future.

[wilson1010]

My initial reaction was correct. We are being pranked.

[cromada]

wilson1010: what do you mean?

I wanted your opinion for my plan, there is no kidding. Whatever gave you that idea?

[restorationconsultant]

Wilson, pranked sounds right Or he's been duped by one of those "get rich in real estate Sellers" you see on craigslist who send investors to their friends in the "remuddling business"?

There was a guy who was 'selling' real estate on Craigslist a while back who was advertising buildings that were foreclosures held by the bank scheduled for demo and was trying to put together "deals" he could take to the bank foreclosure departments and get a commission. He was advertising himself as a broker (no liscence according to state) In fact he never had any representation deal with the bank.

There was a vacant eyesore, built in the 50's , unfit for habitation, 8 unit apartment building that the city had set for demo. City Estimates were 375-450K just to get them into habitable condition. This guy had convinced some out of stater that they could "rehab" the building for 50-60K. Fortunbately we were able to alert the city and they yanked all the utilities , Water, Electric and gas to the building as part of the pre demo abatement. Had he been able to complete that "deal" it would have taked another 5 years to get that eyesore down as the process would have likely started from scratch again.

I agree Pranked or this guy has no clue.

Which brings a point, 2 changes neeed to occur at the state level. 1.) they need to change State law to make it illegal to transfer and record a deed without all delinquent taxes being paid and number 2) they need a law like the one Indiana passed this year that prohibits the purchase of a foreclosure if you already have orders against another property,

That would solve alot of the revolving door out of state slumlord problem.

[cromada]

I have three intependent estimates, I sent these contractors to the house not another. The appraiser was recommended by the Cincinnati REIA.
Seller don´t know anybody from these companys.
But its okay, I have no clue, thats it. Anyway, thanks all for your response, have nice time.

[CJREH]

Cromada, if you are looking at purchasing multi unit buildings in the Cincinnati area I have a number of them that I am looking at selling off. My other business has taken off and I cannot allocate the time anymore