Specialist · Provo, UT · Member since 2015 · 1 post · 0 votes
My husband and I have some money we are looking to invest. We have been considering buying and flipping a house in Cleveland or Detroit area. We really have no experience in this and aren't sure where to start. We are from Utah but living in Cleveland for the next 4 months. Anyone have any advice on what our first step might be?
You've picked two of the hardest cities to flip real estate in the entire country without losing money. Crime rates, low purchase prices, increased competition among the lower priced foreclosures... lots of headwinds for you.
Don't mean to be discouraging, but just b/c the prices are low, doesn't mean it's a good place to take upon the riskiest form of "investing."
You can flip on the outskirts of these two markets. You can find a Realtor that knows the areas that are in demand. Join your local REI Club to network with investors, wholesalers, mortgage brokers, realtors and other professionals in the business.
My husband and I have some money we are looking to invest. We have been considering buying and flipping a house in Cleveland or Detroit area. We really have no experience in this and aren't sure where to start. We are from Utah but living in Cleveland for the next 4 months. Anyone have any advice on what our first step might be?
Why are you in Cleveland for only four months? will you be returning?
If you are renovating a house that you have not yet found, four months is maybe not enough time?
@Kyle Steele Hi Kyle, I have a couple of buy & holds in suberbs of Cleveland that have been good investments for me. However, the one reo I bought last year off the mls closed about 4 months after the original closing date due to the bank and title company being backed up with these deals. My agent said it was uncommon for this to happen. Luckily for me I got possession of the house before the winter otherwise it would have been much more difficult to rent. Typically, people don't like to move in the winter in Ohio. Just a few things to consider!
I have several homes in the Detroit area. I would echo the comments about Cleveland... the best flipping opportunities are in the Detroit suburbs. There are some in the city as well, but you have to pick the precicely correct neighborhoods, and even still, they come with additional risks. Please reach out to me if you have questions about the Detroit area.
I would say the first step is to learn the markets. Find a knowledgable Realtor in the area, maybe someone who invests themselves, and schedule a few days of looking at distressed homes along with rehabbed homes. I always say you need three things to be successful in this business: A great Realtor, a great Contractor, and $$ :) If you've got the money, first find a good Realtor that will hunt down good deals for you
Although of all the areas, I would caution folks most about Boston Edison. You can have a 7,500 sq.ft. stunning mansion that backs up to a burned our shell of a house. You have to know which sections of B.S. you're looking in.
Although of all the areas, I would caution folks most about Boston Edison. You can have a 7,500 sq.ft. stunning mansion that backs up to a burned our shell of a house. You have to know which sections of B.S. you're looking in.
Same story in Indian Village Burns /Fischer streets share alley with some of Detroit's best houses on one side and some of the worst on the other.
Thanks for the "vote" and all of the comments above are spot on. You need to be very careful in really all of the neighborhoods. We actually walk the neighborhood before we do anything. It's amazing what you see on foot rather than a car... Good luck with your search.
My husband and I have some money we are looking to invest. We have been considering buying and flipping a house in Cleveland or Detroit area. We really have no experience in this and aren't sure where to start. We are from Utah but living in Cleveland for the next 4 months. Anyone have any advice on what our first step might be?
I agree with everyone here. I am a Cleveland resident and I plan to buy and hold in Cleveland while doing my flips in places like strongsville, avon lake, beachwood, and westlake.
I am hardly on here at all anymore, but if you were interested in Cleveland I am not telling you that is is the best place in the world to invest, however I will do a guided limo tour through our city and show you all the neighborhoods that I've been investing in for the past 19 years and let you make your own decision.
My husband and I have some money we are looking to invest. We have been considering buying and flipping a house in Cleveland or Detroit area. We really have no experience in this and aren't sure where to start. We are from Utah but living in Cleveland for the next 4 months. Anyone have any advice on what our first step might be?
Kyle, welcome to CLE! A beautiful and booming city, a city being reborn and redefined with new development spurring in nearly every corner of the city and surrounding areas. CLE is electric lately, it offers a unique investor position, you can define assets under $100k in suburban neighborhoods producing well over $1,000 month rent, I suppose it depends on your investment strategy. A good place to being when considering Cleveland, is breaking down your personal goals defining your financial structure and building a good foundation of team members you will be working with as you are situated outside of your immediate assets. A good management group will be critical in your exploration. Furthermore you will want to work with a qualified contractor.
Cleveland Construction/General Contracting: Ohio does not require contractors to have a licensee, you are susceptible to inexperienced and ill prepared contractors to handle your renovation whether it is a hold strategy or a flip strategy. You want someone who has experience in the immediate hyper local area to be able to define specific design criteria to match th neighborhoods. Some older established high end communities have boilers for example, ultimatley the transition is to to forced air however in some cases you may want tor retain the boiler system as it is a "lifestyle choice" in that area (this is merely one example). We can also discuss that in many of the NE Ohio suburbs we have a Point of Sale (POS) municipal assumption violation list, this list must be assumed by the new owner that you will correct al the violations defined in that city report, you will need to place 150% of that repair violation list into escrow with the city, as you can see it is booming more and more complex. Understand and having established relationships in these various municipalities is critical, you want ot make sure you do not sign up for smoothing that is beyond the necessary actual repair, this happens n comes in to play. the time, inspectors over state the condition of the problem and make you take extreme corrective measures that may not be necessary, this is where local contractor talent and reputation. I can go on and on about this, you can always PM me for more information and discuss these nuances that exist in this her local area. Been through so many of these variables int he area that no obstacle stands in the way any longer, just need to have the proper network in place.
Finally, you get what you pay for, always make sure your contractor is pulling permits, do not cut corners, Again, its about building a good team and get references check them out, ask to see portfolios of prior work. Most important ask if they work with investors and if they understand the needs of the investor and the timing constraints, the budgetary goals and the final outcome your seek to achieve. Build loyalty through transparency, this can be fruitful for many transactions not just one, forge relationships to be able to generate a system of success.
Happy flipping! Welcome to CLE, if you are visiting anytime soon and want o grab a cup of coffee send me PM.
Great point! We work 95% of our deals in the suburbs, however we do find great asset talent in the City of Cleveland itself, we have some awesome neighborhoods that have took off and continue to rise at least they are certainly notable:
City of Cleveland Neighborhoods to Consider flips:
Tremont
Ohio City
Gordon Square
Battery Park
Duck Island
Cams Corner
Midtown
University Circle
Little Italy
Their are several neighborhoods aforementioned that, are near impossible to even find something and when they do become available there is a very high demand and bidding wars ensue. I just had a very close friend shopping in Tremont, good luck if you can find something and if you do expect for it to be off the market same day or next. Again, I am not saying this is the be all end all, Im just saying the City has some awesome opportunities itself. I failed to mention that our downtown living is currently booming and we cannot build enough units to accommodate the demand and rents are at 99% occupancy, with self service living along with full service concierge living. Cleveland is happening!
Suburbs are certainly a a necessary space to explore as I defined in the bringing they are th go to space for investing, but we do have more than just the suburbs.
You've picked two of the hardest cities to flip real estate in the entire country without losing money. Crime rates, low purchase prices, increased competition among the lower priced foreclosures... lots of headwinds for you.
Don't mean to be discouraging, but just b/c the prices are low, doesn't mean it's a good place to take upon the riskiest form of "investing."
Matt, this is a very bold and blanketed statement, I think this is false, again just my opinion and being from Cleveland and doing/being apart of over 1,000+ deals in SFR Cleveland NE Ohio real estate, I will be the first to say, this can be as easy as any other city, the name of the game is building a good and competent team. Its not always about price, now, I do not play in the low end arena, however, I do play in the $75,000 begging range and cap out at about $1,500,000 for SFR, plenty of multi-family to work with as well. Cleveland is the epicenter for BioMedical Research and Development amongst many many many more things, with sophisticated arts that are world recognized to having all major sports teams except Hockey & Soccer, being positioned on one of the worlds largest fresh bodies of water.
I can say that head winds exist in every market, certainly plenty of competition all over the country. You mentioned some crime stats, there is crime everywhere it fluctuates in all areas every year some years more, some years less, I do not know if a single cit yin the country that is immune to crime.
Investing is risky no matter SFR, multi-family, commercial, flipping, holding, stock, bonds, IRA - this is the pure nature of investing it is a risk.
I am not trying to be controversial or pose an attack in any means, I am just saying, if you build a good team around you and you do your due diligence you can find a means of investing in any part of the country if you ave the financial means to do so and can capture the deal.
Cleveland does have a market but you can't be flipping in the sub $50,000 price range. You need to go to the higher price points where there is a spread and the area is much more desirable to the retail customer. Flipping in lower price point just means one mistake or unforeseen error means all your profit is gone.
I agree with @Steven Gesis. I flip and own rental property in close areas to Cleveland, such as akron and suburbs. There is definitely a market. Yes Cleveland is rough in some spots and yes we have a slightly elevated crime rate on the east side, but I call many areas "good pockets". You need to know what your getting into and once you do you can make lots of money.