Investing in Cleveland, OH

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Investing in Cleveland, OH

Ivan Franco
Member since 2019 · 21 posts · 1 vote

Hi Everyone,

I'm an aspiring investor living in San Diego, CA looking to buy rental properties in Cleveland, OH. I'm posting this in the forum in hope of connecting with some of Cleveland's local players. I've tried to get in touch with some agents in the area and so far no one has responded to my emails, which led me to write a post here. I'm mainly looking to get connected with agents as a starting point in forming a network in Greater Cleveland but I also wouldn't mind any referrals to/from property managers.

A little about myself… I don’t have any investing experience though I’ve been reading everything I can about the subject and have just about completely cut music out of my life to listen to podcasts whenever I can for about a year now. I believe I’ve reached a point where I’m ready to jump in. It doesn’t make much sense for me to invest in San Diego at the moment so I’m looking out of state. I’m not sure if it’s a good idea to post how much money I have in a forum, but as far as capital goes, I have enough for a down payment and renovation for a property in the East Cleveland area, I have no debt, a healthy credit score, and add money to my savings at a rate of about $1000/month.

I know there are some areas in Cleveland that I’m going to want to stay out of as a first-time buyer so I’m turning to the forums for some guidance.

Any help would be greatly appreciated!

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Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y

Ivan,

I used to be stationed in San Diego back in the day. The reason why agents out there are nt getting back to you is there are a LOT of tire kickers that reach out to them that never ever do anything. 

I was in the same boat intially. I know of an investor friendly agent out there that also owns properties out there. 

First thing they all want to know is if you are pre-approved if you say no....the conversaton pretty much stops. As an FYI I know a lender out there who will do mortgages on properties for as low as $40,000. 

There's a lot of people that say......"I don't need a pre-approval.....I'm paying cash." The agent says....show me proof of funds. The buyer says....send me a bunch of properties first.....agent send them properties,,.....and then..........nothing.

Let them know you are serious with a timeframe of WHEN you will buy.

As for neighborhoods, I'd try to stay away from the "D" and "F" neighborhoods. "C" neighborhoods seem to be a good sweet spot where you can maximize cash flow and still not be in a war zone. 

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  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    Ivan,

    I used to be stationed in San Diego back in the day. The reason why agents out there are nt getting back to you is there are a LOT of tire kickers that reach out to them that never ever do anything. 

    I was in the same boat intially. I know of an investor friendly agent out there that also owns properties out there. 

    First thing they all want to know is if you are pre-approved if you say no....the conversaton pretty much stops. As an FYI I know a lender out there who will do mortgages on properties for as low as $40,000. 

    There's a lot of people that say......"I don't need a pre-approval.....I'm paying cash." The agent says....show me proof of funds. The buyer says....send me a bunch of properties first.....agent send them properties,,.....and then..........nothing.

    Let them know you are serious with a timeframe of WHEN you will buy.

    As for neighborhoods, I'd try to stay away from the "D" and "F" neighborhoods. "C" neighborhoods seem to be a good sweet spot where you can maximize cash flow and still not be in a war zone. 

    7Reply
  • Richard Hart
    Member since 2018 · 1 post · 0 votes
    6y

    Ivan Why Cleveland?  --You have some connection to the city? 

     say this because I'm invested in several markets across the country and Cleveland is not one to date...'m interested in the "why"  part.

    Also because a coworker is from Cleveland and also looking to invest there. His why is because he has friends/boots on the ground to help him 

    Richard in San Diego 

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    @Brian Garlington

    Thanks for the contribute, I really appreciate it.

    I see what you mean. Those agents are trying to protect their time from being taken by people that aren't serious about buying. It's understandable.

    So what you're saying is the best approach would be to get preapproved before trying to find an agent? That way they'll see me as a more likely buyer and get an idea of what my timeframe is since preapprovals typically last between 60 and 90 days?

    As for neighborhoods, thank you for the advice, that's exactly what I had in mind. I've been looking into statistics for the various areas in the Cleveland Metropolitan and from what I can tell, the east side is a more troubled area but I think there's potential for greater returns. But my main concern is that I don't know the area well enough to make a sound decision on where to buy. That's why I've been focusing more on finding an agent that knows the area and can help me navigate.

    0Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    Yes get preapproved first .

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    @Richard Hart

    In all honesty, my reason for wanting to invest in Cleveland is that I can afford to at the moment and there's the potential of getting decent returns there.

    In San Diego, I'd barely be able to buy a condo. In other inexpensive markets I've looked at, the median property value is greater than $100k. In Cleveland, the median property value is below $100k which is the range I'm interested in. I could wait a few more years to save up enough to buy something in a higher price range but I really just want to jump in now because I'm afraid of loosing sight of my investment goals and stagnating. I'm just really hungry to start right now. I know I don't want to work for someone else much longer and the faster I can start investing the sooner I'll be able to be free.

    I don't know anyone in Cleveland but I definitely think it'd be helpful to have a friendly or familial connection to the city. I figure if I could build a connection with an agent then I wouldn't need a friend or family member.

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    @Brian Garlington

    Thank you. I'll be sure to do that.

    0Reply
  • Ryan Evans
    Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
    6y

    @Brian Garlington pretty much said it all. There are so many tire kickers and the commissions are so low that the only way to make money is on volume or doing deals at a far higher price points than most investors are looking. Once you’re approved you should know your neighbourhoods, know the rental markets, know the taxes, etc and be able to clearly articulate what you want to buy. If you don’t know then it’s your job to figure it out. An agent can then help you narrow it down. Agents won’t spend a week driving around looking at 40k properties and coaching you through the process then giving out all their referrals just for a chance that you might buy something that will pay out a $1200 commission. That’s what 90% of the out of state investors are asking for, so do your homework and you’ll start getting attention! 

    Thats just a little honest advice from a local agent who gets and ignores messages almost every day from new California investors who haven’t done their homework. 

    1Reply
  • John Erlandson
    Rental Property Investor · Minneapolis, MN · Member since 2019 · 13 posts · 3 votes
    6y

    Ivan,

    I live in Minneapolis and recently purchased a SFH in Cleveland. I already own 2 SFHs in New Mexico, so long distance investing is familiar. First off I recommend buying the book on Long Distance Real Estate Investing by David Greene here on BP. Hopefully you already own it. I pour over it and reference back to it all the time. He spends almost 20 pages on how to find a good agent. Even starting right here on BP you can connect with agents in Cleveland, especially those that already invest themselves so they can relate to what you are looking for. I used these resources, along with Zillow and Google to find several agents, cross referenced them and looked for write ups and evaluations. Then called and talked with each of them for quite awhile to get a sense of connection. Settled on one to start with. She helped me find the first home and get thru the purchase.

    I used the same process to find contractors and property management companies. I took the agent's recommendations along with researching on BP, and Google. Reached out to several and did research. Narrowed it down to one to move forward with. Current property is in the middle of rehab, and hope to be rented before fall. Then will get financing and start the process again. Will reach out to same agent, and at same time use a different one, to compare and contrast results. Same is the case with contractors....I will use a different one on second house. I had 3 general contractors bid on repairs on first house so I could have a decent representation of what expenses may be. That info I can use for estimating future expenses on the next homes.

    Hope this helps.

    3Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    6y
    Originally posted by @Ivan Franco:

    Hi Everyone,

    I'm an aspiring investor living in San Diego, CA looking to buy rental properties in Cleveland, OH. I'm posting this in the forum in hope of connecting with some of Cleveland's local players. I've tried to get in touch with some agents in the area and so far no one has responded to my emails, which led me to write a post here. I'm mainly looking to get connected with agents as a starting point in forming a network in Greater Cleveland but I also wouldn't mind any referrals to/from property managers.

    A little about myself… I don’t have any investing experience though I’ve been reading everything I can about the subject and have just about completely cut music out of my life to listen to podcasts whenever I can for about a year now. I believe I’ve reached a point where I’m ready to jump in. It doesn’t make much sense for me to invest in San Diego at the moment so I’m looking out of state. I’m not sure if it’s a good idea to post how much money I have in a forum, but as far as capital goes, I have enough for a down payment and renovation for a property in the East Cleveland area, I have no debt, a healthy credit score, and add money to my savings at a rate of about $1000/month.

    I know there are some areas in Cleveland that I’m going to want to stay out of as a first-time buyer so I’m turning to the forums for some guidance.

    Any help would be greatly appreciated!

     Cleveland is a great place to invest! I like to stick to the suburbs where the growth is stable and so are the rent increases! Good luck to you! 

    0Reply
  • Steven TaylorPro Member
    Investor · Lorain, OH · Member since 2016 · 78 posts · 47 votes
    6y

    We can help you in cleveland 

    0Reply
  • Jacob Repreza
    Real Estate Agent · Orange County, CA · Member since 2016 · 207 posts · 111 votes
    6y

    Hey @Ivan Franco! Welcome to Bigger pockets. Biggest things I can add is make sure to learn the ins and outs of East Cleveland. There is always going to be opportunity if you're buying homes at 30-40k but you have to remember why they're being priced that way. Me and my partners invest in Cleveland as well but we stick mostly to the suburbs and while my partners don't like cleveland proper, I for one am looking to get a rental there soon but very much prefer the middle to west of Cleveland where it has more things going for them. 

    And also, I noticed you mention you're investing there simply because of the price point. Cleveland is great for the price point but don't make it your only factor. There's plenty of other markets with a similar price point so just look further into the city and make your decision. 

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    @Ryan Evans

    Thank you for the advice. I recognize there are a lot of tire kickers out there and it’s a sad issue in the real estate community. I’m trying my best to not end up being one of those people and I think knowing that it’s a fairly common problem motivates me to hold myself to a higher standard.

    You made a good point about the commissions being so low. Personally, I have been looking at the properties around 40k and it’s mainly because they present a lower risk for a newbie like myself. I see a property at 40k as something I’m not afraid to mess up because I’ll be able to recover quickly enough. But to mitigate the risk I should be familiar with the specifics of the market I’m looking to invest in so I can have more confidence investing at a higher price point.

    I’m still trying to gather data and familiarize myself with the various neighborhoods in Cleveland, but one thing that keeps echoing in the back of my mind is that I’ll still need those boots-on-ground individual that has first-hand knowledge of the playing field. I suppose it’s just a nagging feeling that no matter the amount of statistics and articles I pull up, there’s no beating that knowledge you get from actually living there. But I guess I’ll just have to overcome that.

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    @Ryan Evans

    Thank you for the advice. I recognize there are a lot of tire kickers out there and it’s a sad issue in the real estate community. I’m trying my best to not end up being one of those people and I think knowing that it’s a fairly common problem motivates me to hold myself to a higher standard.

    You made a good point about the commissions being so low. Personally, I have been looking at the properties around 40k and it’s mainly because they present a lower risk for a newbie like myself. I see a property at 40k as something I’m not afraid to mess up because I’ll be able to recover quickly enough. But to mitigate the risk I should be familiar with the specifics of the market I’m looking to invest in so I can have more confidence investing at a higher price point.

    I’m still trying to gather data and familiarize myself with the various neighborhoods in Cleveland, but one thing that keeps echoing in the back of my mind is that I’ll still need those boots-on-ground individual that has first-hand knowledge of the playing field. I suppose it’s just a nagging feeling that no matter the amount of statistics and articles I pull up, there’s no beating that knowledge you get from actually living there. But I guess I’ll just have to overcome that.

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    Hi @John Erlandson,

    Your success in long-distance investing is very encouraging! I do have David Greene’s book though I’ll admit I’m still reading it and plan on finishing by the end of the week! I was just so excited to get started that I decided to just get moving. I’ve been trying his method of finding an agent then working with a lender the agent is familiar with, but I felt like I hit a wall when no agents were responding to my emails. That’s what lead me to post something here in the forums. I’ve since been searching for lenders and narrowing down my criteria for a purchase since it definitely makes sense to do so before possibly wasting any agent’s time. Your advice will certainly be helpful. It’s reassuring to know that other people are putting David Greene’s system into practice and getting good results. Thank You!

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    Thanks @Tom Ott! I'll be sure to keep that in mind. If you don't mind me asking, are there any particular areas or class of neighborhood you tend to focus on?

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    Thank you for the offer @Steven Taylor! Do you mind if I PM you?

    0Reply
  • Ivan Franco
    OP
    Member since 2019 · 21 posts · 1 vote
    6y

    Thank You for the welcome @Jacob Repreza! That's great insight. I've been looking into the eastern areas like Euclid, South Euclid, Bedford Heights, and Warrensville Heights. They seem like decent C type of neighborhoods, but I'm suspecting the quality of tenant attracted to those areas might even vary by street so I'm trying to get a lock on those details. I think the west of Cleveland definitely has higher class neighborhoods, but as you've noticed, the price point is a concern for me. I'm considering more creative ways to attempt to finance a higher-end property such as those found on the west side. Even though I could get something for 40k, it might be more trouble than it's worth if I'm not careful enough and may be better off buying something a little more stable.

    I'll be sure to continue looking into the city. From what I've read and heard, it is a good place to invest so I'll try to get really familiar with the ins and outs.

    0Reply
  • Steven TaylorPro Member
    Investor · Lorain, OH · Member since 2016 · 78 posts · 47 votes
    6y

    Not a problem anytime

    1Reply
  • Jacob Repreza
    Real Estate Agent · Orange County, CA · Member since 2016 · 207 posts · 111 votes
    6y

    @Ivan Franco no that was my mistake! Just as an FYI there is a part of cleveland literally called East Cleveland which is like a D neighborhood in most areas and I thought that's what you were referring to. The cities east OF cleveland aren't bad though. We just signed loan docs on a duplex in South Euclid and were in talks for a flip in bedford heights till the seller backed out. And there's areas of West Cleveland that has gone through the roof but most areas (besides ohio city, tremont, and kamms corner) you can still find homes for 60-90k pretty easily. Granted they might need some work but can find some that are pretty decent. 

    0Reply
  • James G.
    MD · Member since 2018 · 71 posts · 23 votes
    6y

    @Ryan Evans

    Most agents I met where their niche is lower cost homes looked 30-40k work on a flat rate fee rather than 3% commission. That way they make at least 3.5k (whatever is in your exclusivity contract) per deal.

    0Reply
  • Orlando Perez
    Real Estate Agent · Diamond Bar, CA · Member since 2016 · 112 posts · 29 votes
    6y

    @Ivan Franco you should connect with @Rob Gillespie

    He's been a wealth of knowledge for me in that market area. Best wishes!

    0Reply
  • Todd Pultz
    Rental Property Investor · Dayton, OH · Member since 2019 · 293 posts · 440 votes
    6y

    @Ivan Franco I love seeing new investors get the courage to jump in! Best of luck to you! Cleveland can be a solid market, but depending on what your open to investing in there are lots of opportunities in Ohio. I am an investor, Agent, Property Manager in Dayton, OH. I would be happy to chat about Dayton, Cincinnati, Columbus or Cleveland with you. DM me

    1Reply
  • Samantha McDougal
    Member since 2020 · 12 posts · 4 votes
    6y

    Welcome to BP! I grew up in Cleveland, let me know if you have any questions! 

    2Reply
  • Cynthia Marie Destine-Pierre
    Real Estate Agent · Brooklyn, NY · Member since 2020 · 6 posts · 2 votes
    6y

    I own a nonprofit there in Cleveland, oh and from my experience of being their a couple of times and from ny. It is a major difference, Cleveland needs help and it's doable I mean like everyone has stated their are some neighborhoods that are just tough and rough and a no go. But the suburbs are really nice like some areas shaker heights, euclid, euclid heights. Pretty much where the college campus is. By the way my non profit is transitional homes. 

    1Reply
  • Larry Hunt
    Member since 2017 · 1 post · 0 votes
    6y

    @Ivan Franco Hello Ivan, my name is Larry. I saw your post and a lightbulb went off!! I'm also just starting out and have read, as well as listened to, tons of material on real estate. But anywho where we may be able to help each other, I'm born and raised here in East Cleveland, Oh!!! 

    0Reply
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