Questions about investing in the Cleveland area

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Questions about investing in the Cleveland area

Zach Johns
Member since 2020 · 9 posts · 0 votes

Hello everyone,

So my wife and I are looking to buy our first investment property. We live in CA, but plan on investing in Cleveland. I will be flying there in a couple weeks, and hopefully we can own our first rental in a couple months. We have been preapproved for a 100k property, and plan on buying a multifamily.  

I've read The Ultimate Guide to Grading Cleveland Neighborhoods and have found it very useful thus far in my search.

Our realtor suggests we look into the Elyria/Lorain parts of OH. However, I've seen lots of property in Old Brooklyn and have heard some good things about the area. The goal of the property is mainly cash flow, but having a good tenant base is nearly as important. My realtor says there have been riots in Cleveland, and lots of the city is unsafe, which is his reasoning for focusing on Lorain/Elyria.


I'm hoping for some insight. Is my realtor correct in his assessment of Lorain/Elyria/Cleveland, or are the riots an excuse for him to stay close to his office in Elyria? Any ideas on the vacancy rates in Lorain/Elyria? I imagine the cash flow in Old Brooklyn would be a bit better than further West. Are there parts of Old Brooklyn that I should avoid when looking at property?

Also looking into the Detroit-Shoreway area.  Would hope for similar insights for that part of Cleveland.

Thanks.

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Ken Virzi
Long Beach, CA · Member since 2017 · 107 posts · 82 votes
6y

No riots in old Brooklyn at all

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  • Ken Virzi
    Long Beach, CA · Member since 2017 · 107 posts · 82 votes
    6y

    No riots in old Brooklyn at all

    2Reply
  • John KosterPro Member
    Investor · Valley Village, CA · Member since 2012 · 147 posts · 142 votes
    6y

    Invest in Elyria because of the riots 2 months ago?  That is silly fear mongering.  I'm sure there are deals in Lorain/Elyria but you will do better on the west side of Cleveland and most of the suburbs all over Cleveland.

    1Reply
  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    6y

    I don’t know what your realtors thoughts are, my guess is that they are more comfortable close to home and more equipped to give good advice there.  The riots in Cleveland were highly localised to a small area and only for one night, there was no rioting in any suburb.  Old Brooklyn, the Detroit shoreway, Cleveland Heights, South Euclid, Euclid, and several other areas are all good places to invest.  Your focus should be in identifying a good asset at the RIGHT price.  You can get a terrible deal in a hot area and a great deal in a boring area.  For a buy and hold long term investor focus on a stable area, hot areas don’t always stay hot.  Feel free to reach out if you want to discuss the market in more detail.

    1Reply
  • Riggies B tang
    Member since 2018 · 76 posts · 23 votes
    6y

    Zach. I am also in CA and starting to invest in the Cleveland market. After 8 month of research, I found a duplex in the University Heights. There are many pockets in this market, your agent probably can tell you more on the grading of each neighborhood. I choose University Heights because it's close to the University and Cleveland Clinic, down side is high property tax. I put an offer in last week and in due diligent phase, oh one more thing in the Cleveland market seller/buyer have to deal with POS Point Of Sales violations. Do you use a local regional bank for your purchase? I am working with a private lender in CA but prefer to use a local bank instead. 

    1Reply
  • Zach Johns
    OP
    Member since 2020 · 9 posts · 0 votes
    6y

    Thank you everyone for your insight, I’ll trust my gut a bit more.  I’ll also try to reach out to some of you tomorrow.

    0Reply
  • Zach Johns
    OP
    Member since 2020 · 9 posts · 0 votes
    6y
    Originally posted by @Riggies B tang:

    Zach. I am also in CA and starting to invest in the Cleveland market. After 8 month of research, I found a duplex in the University Heights. There are many pockets in this market, your agent probably can tell you more on the grading of each neighborhood. I choose University Heights because it's close to the University and Cleveland Clinic, down side is high property tax. I put an offer in last week and in due diligent phase, oh one more thing in the Cleveland market seller/buyer have to deal with POS Point Of Sales violations. Do you use a local regional bank for your purchase? I am working with a private lender in CA but prefer to use a local bank instead. 

    I have been preapproved by a lender in the Cleveland area.  Since they are financing, I think they will be cautious about the point of sale, and my realtor should be doing some of his own diligence.  

    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

    Please ask your Realtor to tell you about their last couple of investment properties they purchased in the Cleveland area. If the answer is, "My spouse and I bought an SFR 3 years ago...."

    RUN

    You want to work with a Realtor that owns investment properties in Cleveland. Not someone who picked up the phone and said, "Sure, I work with OOS Investors all the time."............

    Oh yeah, "Tell me about the last 3 people excluding family members you helped that were from out of state and what did they buy?"

    How they answer those questions will tell you a lot.

    1Reply
  • Saleh RiaziPro Member
    Investor · San Jose · Member since 2018 · 46 posts · 65 votes
    6y

    Hi zach, I think you are on the right track. Just to add to other peoples comments, there are a lot of good areas in Cleveland to invest, you need to run your numbers and find the area that gives you your desirable cash flow with a decent tenant base. I think there are a lot of cash flowing areas on the west side that lack the good tenant base and there are some areas on the east side that you get better tenants but the cash flow is not as great. Like Riggies mentioned, University H. is one of the more decent areas of the Cleveland but the Tax can sometime eat up your cash flow. 

    1Reply
  • Mike Furda
    Cleveland, OH · Member since 2020 · 10 posts · 3 votes
    6y

    Hi Zach, I have lived in Cleveland for the last 4 years and the Ultimate Guide to Cleveland is relatively accurate. One thing I will say is that Lakewood is a very sought after place to live especially for young professionals. Low crime, entertaining night life (for Cleveland), and without having to deal with living in downtown. Although it is expensive there, I see it as a safe place to invest for the long term based on having good/consistent tennants.

    Also, Brooklyn is a fine area and I would not worry about any of the riots. They were only really downtown and have not been happening recently.

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    6y
    Originally posted by @Zach Johns:

    Hello everyone,

    So my wife and I are looking to buy our first investment property. We live in CA, but plan on investing in Cleveland. I will be flying there in a couple weeks, and hopefully we can own our first rental in a couple months. We have been preapproved for a 100k property, and plan on buying a multifamily.  

    I've read The Ultimate Guide to Grading Cleveland Neighborhoods and have found it very useful thus far in my search.

    Our realtor suggests we look into the Elyria/Lorain parts of OH. However, I've seen lots of property in Old Brooklyn and have heard some good things about the area. The goal of the property is mainly cash flow, but having a good tenant base is nearly as important. My realtor says there have been riots in Cleveland, and lots of the city is unsafe, which is his reasoning for focusing on Lorain/Elyria.


    I'm hoping for some insight. Is my realtor correct in his assessment of Lorain/Elyria/Cleveland, or are the riots an excuse for him to stay close to his office in Elyria? Any ideas on the vacancy rates in Lorain/Elyria? I imagine the cash flow in Old Brooklyn would be a bit better than further West. Are there parts of Old Brooklyn that I should avoid when looking at property?

    Also looking into the Detroit-Shoreway area.  Would hope for similar insights for that part of Cleveland.

    Thanks.

    Elyria and Old Brooklyn are fairly similar in risk level in regards to quality of tenants. As for the housing stock Old Brooklyn is going to have much more multi family than Elyria. Over the long haul you should anticipate similar performance in both areas.

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

    Elyria and Lorain are both cities that are very easy to work with. Rents are lower than Cleveland.

    They also have great section 8 office to deal with

    0Reply
  • Zach Johns
    OP
    Member since 2020 · 9 posts · 0 votes
    6y

    Thanks everyone!  Definitely feeling pulled toward old Brooklyn so I’ll see what comes up in my price range.  

    I would also hope a 4/2 duplex could rent for about $650 each side?  Would that be accurate?

    0Reply
  • Ken Virzi
    Long Beach, CA · Member since 2017 · 107 posts · 82 votes
    6y
    Originally posted by @Zach Johns:

    Thanks everyone!  Definitely feeling pulled toward old Brooklyn so I’ll see what comes up in my price range.  

    I would also hope a 4/2 duplex could rent for about $650 each side?  Would that be accurate?


    $650 would be on the low end and $800 on the high end 

    0Reply
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