EP 014 | Inside Cincinnati's Apartment Market With a Multifamily Broker | JD Schmerge

JD Schmerge has brokered multifamily deals across Greater Cincinnati for over eight and a half years, first at Marcus & Millichap and now as co-founder of Sabre Group. He has seen the full cycle. He also just bought his first property, a 7-unit in South Covington, and spent year one learning what eight years of brokerage didn't teach him.In this episode, JD breaks down what the Cincinnati multifamily market actually looks like heading into the second half of 2026. We cover why Cincinnati didn't break when other markets did, how cap rate math in a seven to eight cap market behaves completely differently than a four to five cap market, and what low transaction volume actually signals for buyers who are still active.We also get into the renovation threshold conversation that every operator holding value-add multifamily needs to hear. JD explains why there's a specific range of unit renovation completion, roughly 10% to 70%, that maximizes your buyer pool and your exit cap rate. Renovate too little and you have no proof of concept. Renovate too much and you've eliminated the upside buyers are willing to pay a premium for.Ian and Slocomb bring their 70+ unit deal into the conversation directly. The takeaway: in this moment of the market cycle, C-class tenants are not paying more for upgraded kitchens and bathrooms. Affordability is the product. And the operators who understand that are positioning for a better exit, not a worse one.We also get into insurance underwriting for 1930s construction, Ohio's drop and swap property tax strategy and how long it may last, the 2023 triennial's 65% average assessment increase, and what to watch heading into 2026 reassessments.What you will learn:- Why Cincinnati's seven to eight cap market protected operators when rates hit six and a half percent- How two to three percent new construction keeps Cincinnati stable while other markets oversupply- The 10% to 70% renovation threshold and why going above 70% shrinks your buyer pool- Why C-class tenants are not paying rent premiums for updated units right now- How to underwrite insurance on 1930s construction and what JD's policy taught him- What drop and swap is and what the 2023 triennial actually looked like- What buyers and lenders need to see in the first 12 to 24 months to justify a cash-out refiTimestamps:00:01:00 - Guest intro: JD Schmerge00:03:00 - Cincinnati market overview 00:04:00 - Buyer behavior 00:06:00 - Why Cincinnati avoided distress00:07:30 - Cincinnati's supply discipline00:09:00 - A vs. C class bifurcation00:11:00 - JD's own 7-unit in South Covington00:12:30 - Leasing reality 00:13:30 - Rising operating costs00:14:30 - Covington insurance deep dive00:16:00 - Property tax comparison00:18:30 - Ohio property tax legislation00:19:30 - Drop-and-swap risk 00:21:30 - What makes JD buy a deal himself 00:23:30 - Parker Woods Flats (73 units) case study00:25:00 - Exit strategy: "sell the dream" 00:26:30 - Affordability priority 00:28:00 - Ops philosophy00:30:00 - Broker trend: partial renovation as proof of concept 00:32:00 - Slocomb's thesis on diminishing returns 00:34:00 - JD's rule of thumb 00:36:00 - Buyer profile shift 2021 vs. now 00:37:30 - Cincinnati hidden gems The Cincinnati Real Estate Investing Show is hosted by Slocomb Reed and Ian Cruz. New episodes every week. Subscribe, leave a five-star review, and share with a fellow investor.