Why Cincinnati's Biggest Multifamily Deals Don't Pencil for Everyone

Lee Yoder holds 930 units, and almost none of them are near Cincinnati. Why institutional capital compresses returns above 100 units, and what he found in rural Ohio and Indiana instead.

Lee Yoder owns 930 units today, and only one property sits anywhere near Cincinnati proper. The rest run north through the northwest corner of Ohio and into the northeast corner of Indiana, in towns most Cincinnati investors have never heard of. Founder of Threefold REI, Yoder made that shift deliberately, not because he stopped liking Cincinnati real estate, but because the returns he needed stopped being available once his deal size crossed into institutional territory.

About This Post

This analysis draws from a conversation with Lee Yoder, founder of Threefold REI, who has taken three multifamily syndications full cycle and currently holds 930 units concentrated in northwest Ohio and northeast Indiana. Yoder's experience straddling both a small Cincinnati-area portfolio and a much larger rural multifamily operation gives him an unusually direct comparison point on where returns are actually available at different deal sizes.

Listen to the full conversation on Spotify, Apple Podcasts, and YouTube. The full episode also covers Yoder's decision to bring property management in-house after years working with a third-party Cincinnati management company, and more detail on his rent roll and leasing performance in Williamsburg.

The Cincy REI Show publishes every Monday. New episodes cover neighborhood-level analysis, local investor strategies, and real deal stories from operators active in Greater Cincinnati.

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Why Yoder Left Cincinnati for Rural Ohio and Indiana

Williamsburg, Ohio, in Clermont County, is Yoder's property closest to Cincinnati, roughly 15 minutes from the outer belt on Route 32 past Batavia. The appeal is straightforward: cheaper land and rent than closer-in submarkets, a small school district, a walkable downtown with a coffee shop and donut shop, and easy access back to every Cincinnati amenity via the outer belt. Two-thirds of the unit mix is one-bedroom, one-third two-bedroom. One-bedrooms moved from $850 back up to $900 in early 2026 after a rough stretch; two-bedrooms have held steady around $1,100.
Northwest Ohio and northeast Indiana are where the bulk of Yoder's 930 units sit, in small towns like West Liberty, similar in character to Williamsburg but small enough that few investors outside a tight radius have heard of them. Yoder targets a minimum of 100 units per acquisition there specifically so the deal can support a dedicated on-the-ground team.
Cincinnati inside the outer belt, particularly for properties over 100 units, is where Yoder says he consistently loses to institutional buyers who have a lower cost of capital and target lower returns, since their investors are largely preserving existing wealth rather than building it. Yoder still finds smaller Cincinnati deals with a workable price per door but says he has lost interest in that segment now that his fund size requires bigger acquisitions.
The Cincinnati east side broadly, including the Eastgate area near Williamsburg, has seen heavy new apartment construction in the last several years. Yoder says that supply has occasionally pulled his own C-class tenants toward newer B-class product offerings with months of free rent as concessions, a pattern he expects to ease as those new deliveries slow into 2026 and 2027.

The Cap Rate Gap Between Cincinnati and Rural Multifamily

Yoder's underwriting numbers illustrate exactly why deal size drives where investors end up buying. On his rural Ohio and Indiana acquisitions, Yoder targets a going-in cap rate north of 7%, ideally around 8% on actual trailing numbers, with year-one cash flow around 7% climbing to 8% by year two. On comparable Cincinnati deals, he sees cap rates closer to 6% to 7% with year-one cash flow closer to 5% to 6%. Larger Cincinnati-area deals, the ones institutional buyers compete for, can compress further still, sometimes to a 4% to 5% cash-on-cash return in year one.

The mechanism behind that gap, in Yoder's view, is straightforward: preferred equity providers generally require a minimum check size, often $5 million, which effectively locks smaller deals out of that capital source and reduces competition on them. Larger, more expensive deals attract institutional buyers willing to accept lower returns because their investors have already built their wealth and are focused on preserving it rather than growing it aggressively.

This same logic underlies why Ian and Slocomb's own smaller, scatter-site Cincinnati acquisitions can compete effectively in the sub-100-unit range: analytical and operational expertise built specifically around smaller, harder-to-run properties, on-site staff on payroll instead of third-party management fees, lets them win bids institutional buyers won't pursue, achieving similar cap rates and cash flow to Yoder's rural portfolio without leaving Greater Cincinnati.

What's Working in Cincinnati (and Just Outside It)

Yoder's strategy comes down to a small number of deliberate choices about where to compete and how to hold.

Go where the big players aren't. Yoder specifically targets deal sizes and locations that fall below the threshold institutional capital requires, whether that means staying under 100 units in Cincinnati or going rural at scale further out.
Buy for cash flow, not a five-year flip. Yoder's earlier syndications targeted a shorter hold and exited faster than projected. His current portfolio is built around a 10-year hold horizon, planning to refinance around year five and return investor capital while continuing to collect cash flow rather than counting on a large sale-driven upside.
Bring property management in-house once you have the scale and expertise to do it. Yoder worked with a Cincinnati-based third-party management company for years, learned the business from them, and eventually built an internal team once he understood the operation well enough to run it with tighter focus and lower cost, since the internal team's only incentive is making the properties profitable, not generating a separate management fee.
Match capital investment to what the tenant base can actually pay. For C-class properties right now, Yoder deliberately avoids upgrading finishes like countertops or cabinets that are functional but dated, since C-class renters currently want affordability over upgrades they cannot pay for. Yoder's approach is to accept a lower rent, like $850 instead of $950, rather than force a renovation cost onto a tenant base that will not absorb it.

What is not working: assuming Cincinnati's headline market-wide rent growth numbers apply evenly across asset classes and unit types. Much of the reported growth is concentrated in single-family rentals and Class-A apartments, while Class-C one-bedrooms specifically have lagged or declined.

Lessons From the Field: What a Rent Leasing Platform Change Revealed About the Market

Both Yoder's Williamsburg property and Ian and Slocomb's own Cincinnati portfolio adopted AI-driven leasing software around the same time, January 2026 for TLP, and both saw an identical pattern play out over the following months.

The initial change was simple: an AI leasing assistant answering every inbound inquiry immediately, trained to identify itself honestly as AI rather than impersonate a human, with the ability to escalate to a person as soon as one became available. TLP saw inbound inquiries double almost immediately after the switch in January, but showings and applications did not follow at first. The volume increase was real, but conversion further down the funnel stayed flat through the winter.

The complication was ambiguity about whether the tool was actually working, since more inquiries without more signed leases could just as easily reflect a platform quirk as a genuine demand signal. TLP kept watching the data rather than assuming either outcome.

The shift came in late March 2026. Inquiry volume held steady, but showings roughly doubled and applications quadrupled from that same inquiry pool. TLP's active listings across its 420-to-450-unit portfolio dropped to the lowest point in 18 months. Yoder reported the same experience independently across his own portfolio during the identical window, one-bedrooms that had been stuck as low as $800 climbing back toward $900, and occupancy in Williamsburg reaching 96%, the highest in recent memory.

A leasing technology change can surface a market shift before broader data confirms it. TLP recognized the March shift within about three weeks specifically because they had already been tracking their own inquiry-to-lease funnel closely since 2023.
More inquiries do not guarantee more leases, at least not immediately. The gap between the January inquiry spike and the March conversion spike shows real demand and converted demand can move on different timelines.
AI leasing tools require real setup investment before they perform. Both operators described a genuine break-in period training the AI on quirks and edge cases before it delivered clean results.
Independent portfolios seeing the same shift at the same time is a stronger signal than either alone. TLP's Cincinnati experience and Yoder's rural Ohio and Indiana experience lined up almost to the week, despite having no shared management or geography.
Class-C recovery lags Class-A recovery, and the timing gap itself is data. Rents for older one-bedroom stock only began recovering roughly 18 months after the August 2024 downturn began, well after Class-A rents had already stabilized and climbed.