Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
Hello all!
I'm looking into some duplexes in Cleveland as my first ever property. I've been living around the world for a while, but I'm from Seattle so I'm not familiar with the market beyond the research I've been doing in the forums and such.
For whatever reason, there are quite a lot of duplexes in Cleveland for sale. They seem to be renting for 500-750 per unit and they're selling from 10k on the really low end. I would love to be all in on one for 20-25k cash and bring in 1000/mo as a buy and hold, but that seems way too good to be true. I feel like I'm missing something.
Does anyone have experience in the area with those sorts of units? Are they easy/hard to rent? (Obviously, depends on the neighborhood and I know there is a good amount of crime)
I could fly out to buy/live there for a while to get it fixed/rented since I'm taking a break from work. It would be ideal to be hands on for my first deal.
Property Manager · MS TN, OH · Member since 2017 · 6 posts · 3 votes
6y
@Josh Gregory
Edgewater has some good blocks and there is certainly a lot of activity as it is basically wedged between Ohio City and Lakewood. Both being good rental markets for the past 10 years. We, Allstar Management, manage over 700 properties in the Cleveland metro area with many in Edgewater.
Investor · North Bay, Ontario · Member since 2015 · 709 posts · 262 votes
10y
dont know Cleveland but do know Toledo and we are finding the same kind of numbers there depends on the area renovations and property management If you have a good team on the ground Ohio is a great place to invest
Contractor · Cleveland, OH · Member since 2016 · 116 posts · 50 votes
10y
I'm investing in single families/doubles and 4 plexes in cleveland now. @Linda Labbe is correct. Ohio is a good place to invest. Honestly, I only have experience in Cleveland, but the market here is really good for buy and hold.
PM me and I'll answer any questions you have or even help you to get started.
Investor · Cleveland, OH · Member since 2015 · 99 posts · 42 votes
10y
It all depends on the area. There are areas in Cleveland where that's doable, but the neighborhoods are probably going to be pretty rough or need repairs. There are other areas where you can purchase a duplex for around $50k and the neighborhood will be more around a C or C+.
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
10y
I just had a quick browse through Toledo and you're right @Linda Labbe. I'll have to look into there as well.
The buy and hold strategy is why I'm looking at Ohio so it's good to get some reinforcement on what I've been seeing. @Dan Mitchen I wish I had the budget for something in a nicer part of town, but the way I look at it, if I'm working in a lower price range that will bring a different set of problems, at least it will be a good lower cost learning experience.
There is a great neighborhood map of Cleveland posted somewhere on BP, but it doesn't include much of the East or North side. Does anyone know if the area around Cleveland Lakefront State Park is any good? It looks like the lake side of the train tracks has some deals.
Investor · Toledo, OH · Member since 2016 · 113 posts · 33 votes
10y
I have a few multi units of my own for sale as well as some under contract here in Toledo,Oh. They are in B and C class areas. If you are seriously interested about investing in Toledo, Oh send me a message.
Real Estate Agent · Dayton OH (dayton, oh) · Member since 2016 · 194 posts · 123 votes
10y
@Ryan Evans I would suggest staying away from the east side of Cleveland. I was in Cleveland for 10 years before I came back to Toledo and while Toledo isn't Mayberry in any sense, There is much more opportunity here. If you are interested in Cleveland, I would suggest sticking to the Suburbs around Old Brooklyn, Parma Etc. One thing similar in Toledo and Cleveland is that the areas are very pocketed, both good and bad right next to each other. I do agree with @Daryl Anderson that the market is great for buy and hold in both areas.
Contractor · Cleveland, OH · Member since 2016 · 116 posts · 50 votes
10y
Yes I would agree with Rebecca Cirisan
I'm from Cleveland and don't invest on the east side. I stick to the west side where the neighborhoods are much more stable and growing.
As for the price points of duplexes in Cleveland, I would say you are on the money in regards to the rental amount. $500-$750 is pretty reasonable. We manage a portfolio of 500+ units and the most common duplex you will find in the area is an up down that has 2 beds and 1 bath per unit, your looking at $600-$650 a unit for those. To get above $700 your typically looking at a very nice 3 bedroom unit, possibly a side by side to get all the way up to $750. Anything under $600 is likely a single home that was converted to a duplex years ago and has a 1 bedroom unit.
Your price points are not going to work. Anything you buy in a reasonable area is going to run you $70k+ all in. Anything you are all in at the 25k range would be in an F Neighborhood.
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
10y
Yikes! Well i'm not particularly looking to buy in a warzone so I'll keep an eye out on the westside and toledo. Thanks for the input everyone and that's an awesome resource you put together @James Wise ! It's going to be tough for me to go for something in the 70k range. If you had $25k to spend (possibly up to 35-40 if I borrowed a bit), what would you be looking for? Maybe a land contract with a good down payment? If so, any idea how easy that would be?
@Paul Parker what's the price range on your units? I'm definitely interested, but don't want to waste anyone's time if they're out of my budget.
Yikes! Well i'm not particularly looking to buy in a warzone so I'll keep an eye out on the westside and toledo. Thanks for the input everyone and that's an awesome resource you put together @James Wise ! It's going to be tough for me to go for something in the 70k range. If you had $25k to spend (possibly up to 35-40 if I borrowed a bit), what would you be looking for? Maybe a land contract with a good down payment? If so, any idea how easy that would be?
@Paul Parker what's the price range on your units? I'm definitely interested, but don't want to waste anyone's time if they're out of my budget.
If you have $25k in cash I would take that and purchase a $100,000 duplex in a B-Class area using a 30 yr mortgage.
New investor to the area looking to buy a multifamily property. Lakewood, OH area has been all the hype and it looks like the sales price is dropping the further East you venture towards W117th street. We have been particularly interested in the Edgewater neighborhoods - after reading the 'Ultimate Guide to Grading Cleveland Neighborhoods' it looks like this was rated Class C in 2016.
Does anyone have any updated perspectives on this area now? The sales prices are running 120 - 170k, which in Lakewood would similarly priced at 180k minimum. In true investor fashion, we want to try to pull some appreciation from the property down the line. We are operating on the assumption that Lakewood market is pretty matured at this time.
Property Manager · MS TN, OH · Member since 2017 · 6 posts · 3 votes
6y
@Josh Gregory
Edgewater has some good blocks and there is certainly a lot of activity as it is basically wedged between Ohio City and Lakewood. Both being good rental markets for the past 10 years. We, Allstar Management, manage over 700 properties in the Cleveland metro area with many in Edgewater.
James is right. Go for a more expensive property in a stable area with a 30 year note.
Cleveland is so hit and miss... If you're buying for a small amount, it's almost guaranteed that you're in a very rough area. East and West Cleveland both have areas that are like war zones. It would be a big mistake to pull the trigger on a property in an area like that. I always suggest Lakewood if you want strong appreciation and stability. I've experienced 30% appreciation in Lakewood since 2017. If you buy in a war zone, you'll get crap tenants and 0% appreciation.
Makes sense. We fear that Lakewood is over-inflated on purchase price for multi-family properties. A lot of renovated properties going for 220k+, and on the flip side, most priced 150k-175k require a decent amount of renovation.
Is Lakewood market anticipated to hold value around this 225k range for a renovated property? Makes the renovation with a purchase price of 175k make more sense.
Flipper/Rehabber · Cleveland, OH · Member since 2014 · 173 posts · 121 votes
6y
@Josh Gregory
Correct - and roughly 15 sell a month. So until supply loosens buyers will be forced to get creative and pay up.
I don’t think it’s the overall crazy demand like you’ve seen in single families driving up prices- there is just literally almost zero double inventory.
I did three doubles last year and still shocked I picked them up at decent prices in Lakewood.
Makes sense. We fear that Lakewood is over-inflated on purchase price for multi-family properties. A lot of renovated properties going for 220k+, and on the flip side, most priced 150k-175k require a decent amount of renovation.
Is Lakewood market anticipated to hold value around this 225k range for a renovated property? Makes the renovation with a purchase price of 175k make more sense.
I believe you are on the low end at $220. A renovated SFR in Lakewood is easily at or above $300. Duplexes are the same... A nice rehab on a double w/ 1,000 sf per unit will get you to $280 on comps assuming you're not in a bad area within Lakewood.
I do not see a reason to believe that Lakewood is overpriced. I don't think that properties will continue to appreciate at such a high rate, but I do think that renovated properties will easily appraise. In other words, the run on organic appreciate might be at an end, but there is still forced appreciation to be had.
Keep in mind the WHY of high home prices... It's due to an organic shortage of homes in the entire US economy.
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
@Josh Gregory@Ricky Lewis is "soft selling" himself and being modest. He is with AllStar Management and they have definitely done right by me. I went went through some "odd" experiences with a couple of other PMs in Cleveland and after firing them I ended up with AllStar Management, which is who he is with. They have been outstanding compared to the other two I had. Reach out to @Angel Chaney here on BP. She oversees their Cleveland Office.
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
6y
Wow, I'm glad this thread got bumped because that was one of my first posts! For anyone interested, I executed on that plan shortly after the post as an eager and naive 25-year-old. I flew to Cleveland and bought a duplex for $24k not having a clue what I was doing. I fixed it up doing about half of the work myself and I put about $12k more into it. Now, it's paid off fully, worth about $65k, I self-managed it from the west coast and it's brought in over $40k in gross rents cash flowing about $800/month. Since then I've bought several more duplexes and a couple of singles. It's had some tenant drama, one eviction, and plenty of unexpected expenses. Though, it's been a far better education than any book or course on real estate.
Those days are long gone. For the out of state people who think they can do those numbers now, you're dreaming. It's a very different market. Especially on the west side. Doubles get bought immediately if they're any good and often it's with cash offers. Inexperienced out-of-state investors have flooded the market and are overpaying so it's not as easy to buy as some people think. @Josh Gregory I think between Ohio City and Edgewater there is still plenty of opportunities, but depending on how conservative you want to be, you may have to overpay or buy something less desirable and wait it out.
The area my properties are in is considered a rough area by many, and I agree to a large extent. They've also appreciated over 30% since 2017, so if you know how to navigate it you can do well. For example, I bought another duplex recently for $40k, put 10k into the first unit and rented it in a week for $865. Gotta find a niche and own it!
Real Estate Agent · Westlake, OH · Member since 2014 · 186 posts · 165 votes
6y
@Josh Gregory lots of good advice in this post. I’ve had 2-3 buyers interested in Lakewood and Edgewater areas continuously over the last 1 1/2 yrs so have spent a lot of time looking at properties in these areas- here are a few additional observations:
The numbers on renovated full size Lakewood two family don't match most investors criteria (greater than 7% ROI). Because tenants tend to be really stable, they are easy to manage though so they can still make sense for someone looking to park money into real estate with the least amount of hassle (property funds itself, tenants pay off mortgage over time but little to no cash flow). Also excellent for first house hack.
Smaller renovated Lakewood two families (less than 2000 sq ft) can be bought under $200K (sometimes under $175K) but rents potential much lower (e g $900 vs $1200 a unit)
Clifton Edgewater (west of West Blvd, north of Detroit) and Kamms (area just south of Lakewood) along with Lakewood have always been strong areas and are priced at/near Lakewood (and to some extent share the same tenant base). The multi families you are seeing $120K-$170K in Edgewater need work, probably significant work.
Victor’s point on inventory is spot on. There are multiple offers immediately on anything that goes on the market in any of these areas (not just Lakewood). I see no signs of this slowing.
I’ve been suggesting the area bordered by West Blvd on the east, I-90 on the north, W 140 on the west and I-71 on the south. Solid working class neighborhoods B- thru C depending on where you are. Rents are strong compared to price points and its not hard to find good tenants. Still competitive due to lack of inventory but the return potential is much better. Has experienced good appreciation over the past few years.
Makes sense. We fear that Lakewood is over-inflated on purchase price for multi-family properties. A lot of renovated properties going for 220k+, and on the flip side, most priced 150k-175k require a decent amount of renovation.
Is Lakewood market anticipated to hold value around this 225k range for a renovated property? Makes the renovation with a purchase price of 175k make more sense.
Yea no reason it shouldn't. It's an area that is in high demand. If you take the lower value areas the only reason people choose to live there is the affordability really. This area is an area people want to be, thus the prices reflect that.