Doing What Actually Works

18 thoughts on “Doing What Actually Works”

  1. Hey Johnny,
    Are you still living in Cincinnati?
    I am glad my future wife and her business partner have been following you advice: rehab good solid brick buildings that need only routine permits and focus on one neighborhood.
    Their neighborhood is the brewery district in Over the Rhine. There are still lots of opportunities in Cincinnati for that kind of limited redevelopment.

  2. The rule still seems to be that you can’t fight city hall. It isn’t 100% true, but it can be ridiculously draining, so it is only worth it if you have deep pockets the possibility of a big return.

    I think it’s like river law with its distinction between land gained or lost by accretion as opposed to by avulsion. If you just make a series of small changes, no one notices, even if the overall change is big. If you try to make a big change all at once, things get a lot more complicated.

  3. We bought a turnkey “garden” apartment in greater Sacramento a few years back, before I got into this whole urbanism thing. Shame to say but it’s been a fantastic investment. Not exactly passive income, but sure beats praying the 401k gods aren’t going to screw us when our number is called.

    That being said, I understand the long term situation. I know said garden apartment might not be worth much in the future. But to hell with it. I got other things to do. Let the chips fall. Within 8 years from close, the unit will have returned its entire purchase price so even if its entirely worthless, which is doubtful..

    Like your friends, I’m thinking the sweet spot is cosmetic remodel of undervalued pre-war stock. It only took me a few visits to The Permit Center for an ADU request to realize I was outgunned..

    1. Yes. Smart move with the garden apartment. I’m fifty. Statistically I’ve got twenty five more years. We’re likely to see all kinds of ups and downs during that time, but the garden apartments will still limp along more or less generating income. Is this the world I want to build and invest in? No. But the other options aren’t legal or socially acceptable. Soooo… Just do what works until the rules change. I’ll be dead by then.

  4. Curious that when you revised your original plans for a duplex to a single family residence that you were told by the city that you couldn’t add a 2nd story. Yet, that is exactly what your buyer did and you say that he didn’t need any special permits or variances. Odd.

        1. I already have in a way. Looking back over the last couple of decades I’ve bought, built, and remodeled various properties in multiple states. The projects that were the easiest, most cost effective, and profitable were the ones where I did the least. The ones that caused me the most trouble and ended in a wash were the ones where I actually attempted to do something “good.” This last experience in Ohio finally got me to realize that the current social and regulatory environment don’t favor such activities even when all the officials insisted this is what they wanted people to do. But there are plenty of opportunities to do little yet thrive. Blog posts to come.

  5. It seems the idea of renovating multiple houses at once will help secure the buyers into believing that everything around them is getting better rather than taking the risk of buying one lone property with the fear that others won’t keep up. This was not your method, but you didn’t entirely fail as you bought cheaply and sold for some profit…correct? Great story and photos and some lessons in property investing.

  6. Slightly off-topic but aren’t those really high ceilings (for an american house of this type) in some of the pictures? Or is it a photographic illusion?

    1. I assume you’re referring to the photo of a workshop with woodworking equipment. No?

      That’s one of the buildings that’s still in the process of being renovated. It’s actually the corner shop of an 1890’s era mixed use property. The couple ran the numbers and realized that there was a strong market for the upstairs apartments, but no viable market for a corner shop in this location at this time.

      Plus, the authorities would likely crawl up their ass about the need for off street parking and a million other code and zoning provisions for a commercial/retail space. It makes more sense to use the shop as their own personal utility area for multiple properties. Someday the shop could be an amazing restaurant or something, but not yet.

      1. Yes, I meant the workshop especially but even in the other rooms the ceiling heights are decent. Not prewar Upper West Side but still decent.

  7. You’ve slowly brought me around to this way of thinking. Know the limits. Keep the brain damage to a minimum. Even when we’re confined to those parameters, there’s still a lot of worthwhile stuff that can be done.

  8. I would argue with you about your last sentences, but we’ve been down that road before…

    Otherwise, good to see investment going into central Cincy (even though it’s swarming with Creationists and has terrible chili that gave me culture shock back in the summer of 2015). Thanks for the investment advise!

  9. Thanks for the update. My own experience with code enforcement in a rural area suggests that it is best to steer clear of anything that requires unnecessary entanglement or anything new. In my case that wasn’t a possibility but why go there if you don’t have to. Everything is ridiculously complex not just government rules. Getting 3 electrical poles put in for our house ended up being basically impossible as well even though the code and the law were all essentially all on our side. The utility misread the law, even with an attorney on hand, and ended up in a legal tussle with a neighbor. Now we are off grid and not at all loving it. Just discovered this blog and love it.

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