Cleveland Ohio market

Investor-friendly agents in Cleveland, OH

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Michael Swan
Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
9y

Hi @Jay Hinrichs

I have 85 front doors (6 apartment complexes and 7 single family) in Euclid, Painesville, Shaker Heights, and Cleveland Heights.  Also, in about 30 days will own a 24 unit in Akron.  Right now I have Zero vacancies and am evicting two tenants.  I have owned in NE Ohio since Oct of 2014 when I purchased my first little duplex in Euclid.  My 2 latest acquisitions are a 12 unit and a 21 unit in Painesville that we purchased in October and November of 2016.

Swanny

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  • Fernando E.
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    7y

    thanks @Jay Hinrichs much appreciate your input! Very helpful as always!

    0Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    I have 8 apartment complexes in that area in strong blue collar neighborhoods.  As Jay suggested, if you think you are buying a good deal, be careful some of these areas that are being sold to people from California, Washington, Hawaii, New York, New Jersey, and even Texas now are being led to believe they are buying "C" class and "B" class properties here on BP and they are really scary "D" class properties.

    Make sure you google earth 1/2 block away to 6 block radius at all the commercial, shopping etc... if you see grafitti, broken windows, boarded up windows, trash all over the place, payday loans, unsavory characters, NO large grocery stores, NO trendy shopping, coffee shops etc...  you are in a "D" class neighborhood.  If people tell you you are right in the path of progress, that means it is highly speculative and right now you are thinking of investing in an area that is unsafe after 10:00 pm at night.  Also, when your place is vacant, you need to notify your insurance carrier and pay much more for insurance, about $100.00 a month (if you want coverage during being vacant), due to possible break ins to steal all your copper and they won't turn off the water when doing so, or squat and do drugs in your place etc... 

    If you wouldn't feel safe with your 18 yr old niece walking In the neighborhood at 10:00 pm. on a Friday night, why would you invest there.

    Swanny

    3Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2016 · 139 posts · 136 votes
    7y

    My aunt and her boyfriend live in San Diego, and were sold on some apartments in Cleveland. A few months after purchasing, they wanted out. It was a case of what was stated above.

    2Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    7y

    @Fernando E. I personally have not found any good providers in Ohio that provide newer than 1950s and more than 900 a month rents.

    I like Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, or other secondary or tertiary markets.

    2Reply
  • Fernando E.
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    7y

    @Michael Swan thank you for detailed guidance on avoiding sketchy areas in Cleveland, OH. I’ll keep them in mind as I look for my first investment out of state as I do my due diligence. I’m targeting A and at a minimum B class neighborhood, with opportunity to add value, and cash flow.  

    @Account Closed thanks for providing other potential markets. Like you I still have my full time job, I’ll schedule time to connect in calendly 

    1Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    7y

    @Lane Kawaoka

    My counter to that is the fact that Cleveland is a very old city. You are right that it is harder to find "newer" properties but that is not the fault of the providers. You have what you have. The city is old and the providers can not help that properties that exist today were built between 1850 and 1920. I was able to find a house built in 1960 that has worked out very well for me. So I do not disagree with you as far as finding a more recent build, and it being a better investment. I like properties that were built after 1950 as well, but the age of the buildings are reflected in the prices of the properties. 

    1Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Swan:

    I have 8 apartment complexes in that area in strong blue collar neighborhoods.  As Jay suggested, if you think you are buying a good deal, be careful some of these areas that are being sold to people from California, Washington, Hawaii, New York, New Jersey, and even Texas now are being led to believe they are buying "C" class and "B" class properties here on BP and they are really scary "D" class properties.

    Make sure you google earth 1/2 block away to 6 block radius at all the commercial, shopping etc... if you see grafitti, broken windows, boarded up windows, trash all over the place, payday loans, unsavory characters, NO large grocery stores, NO trendy shopping, coffee shops etc...  you are in a "D" class neighborhood.  If people tell you you are right in the path of progress, that means it is highly speculative and right now you are thinking of investing in an area that is unsafe after 10:00 pm at night.  Also, when your place is vacant, you need to notify your insurance carrier and pay much more for insurance, about $100.00 a month (if you want coverage during being vacant), due to possible break ins to steal all your copper and they won't turn off the water when doing so, or squat and do drugs in your place etc... 

    If you wouldn't feel safe with your 18 yr old niece walking In the neighborhood at 10:00 pm. on a Friday night, why would you invest there.

    Swanny

    ya know Swanny I was wondering why investors from the Coast are continually taking risks on C class that is really D and B that is really C. and it dawned on me it could be for this reason.. or this is a main reason.. 

    Now think about when new investor get on here and ask what should they do.. much of the responses are  " you have to figure out what your goals are what your return requirements are etc etc."

    Well newer investor very often will respond with my criteria is 10% return either cap or COC.. so they start going down the road of only considering properties that will meet THEIR criteria.. with not a lot of thought to the fact that out in those markets return is directly related to property and tenant risks..

    Instead of maybe looking at this as long term and accepting a little lower return but landing a property with much less risk in a better area that is clearly B class or above.  

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  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Hi @Jay Hinrichs,

    That Google Earth Test of commercial properties, surrounding a 6 block radius has not failed me yet it clearly seeing the difference between a solid blue collar  "C" class neighborhood and a very risky "D" class neighborhood.  

    You can't believe brokers etc... You need to see with your own eyes.  Be careful if you are in California. Washington, Hawaii, New York, New Jersey, and now parts of Texas.  You are the target!!

    Buyer beware,

    Swanny

    3Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Swan:

    Hi @Jay Hinrichs,

    That Google Earth Test of commercial properties, surrounding a 6 block radius has not failed me yet it clearly seeing the difference between a solid blue collar  "C" class neighborhood and a very risky "D" class neighborhood.  

    You can't believe brokers etc... You need to see with your own eyes.  Be careful if you are in California. Washington, Hawaii, New York, New Jersey, and now parts of Texas.  You are the target!!

    Buyer beware,

    Swanny

    Swanny I started investing in the mid west in 2002 ( in Detroit) and have since invested in every major mid west market short of St. Louis.

    this same scenario you describe has been going on since I got into it.. and the west coast our out of area investors chasing yield or their criteria has been going on since then as well.  You don't see brokers in San Deigo advertising their apartment buildings in Cleveland right?  The facts are if you did not have this trend that start with the huge CA price run ups of the early 2000s these markets left to their own would not be at the price point they are now.. its inflated by out of area competition for the assets..  

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    1Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Exactly @Jay Hinrichs!!  BUYER BEWARE!!!!

    Swanny

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Swan:

    Exactly @Jay Hinrichs!!  BUYER BEWARE!!!!

    Swanny

    and buyer get a reality check on their CRITERIA  LOL 

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  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Yes. @Jay Hinrichs, as long as brokers don't tell them that NE Euclid and areas of Lake County like Painesville, and Elyria, where I presently am targeting are "B" class areas.  They are not they are solid C+ Blue Collar hard working neighborhoods.  There is too much inflated classifications by brokers and people trying to sell people out of state. I totally agree, if it was a great deal, I know people in Cleveland that would be scooping those things up. 

    I suggest people of BP find those solid C+ areas and find agents on their own that have offices in those areas and get about 8 brokers looking for in those solid C+ areas and get them to find those listings before they hit the MLS, since they have store front offices in those communities. At the same time get their suggestions for PM to represent you that you can interview too. Show those residential agents a bank statement with account numbers marked out, so they know you are not wasting their time. Establish relationships that way, instead of people targeting and soliciting you.

    Last, ask people that already invest there and people that have lots of front doors, like me In those specific areas to verify why they invest in those particular areas.  Someone like me that has 122 front doors has nothing to gain, an angle, etc.... I only now have 8 apartment complexes and have already sold all my single family in the areas I invest.  I am an objective investor and hate to see people sold a bill of goods, telling them they are in C or B class areas, when they are clearly D class areas.

    Swanny 

    1Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Swan:

    Yes. @Jay Hinrichs, as long as brokers don't tell them that NE Euclid and areas of Lake County like Painesville, and Elyria, where I presently am targeting are "B" class areas.  They are not they are solid C+ Blue Collar hard working neighborhoods.  There is too much inflated classifications by brokers and people trying to sell people out of state. I totally agree, if it was a great deal, I know people in Cleveland that would be scooping those things up. 

    I suggest people of BP find those solid C+ areas and find agents on their own that have offices in those areas and get about 8 brokers looking for in those solid C+ areas and get them to find those listings before they hit the MLS, since they have store front offices in those communities. At the same time get their suggestions for PM to represent you that you can interview too. Show those residential agents a bank statement with account numbers marked out, so they know you are not wasting their time. Establish relationships that way, instead of people targeting and soliciting you.

    Last, ask people that already invest there and people that have lots of front doors, like me In those specific areas to verify why they invest in those particular areas.  Someone like me that has 122 front doors has nothing to gain, an angle, etc.... I only now have 8 apartment complexes and have already sold all my single family in the areas I invest.  I am an objective investor and hate to see people sold a bill of goods, telling them they are in C or B class areas, when they are clearly D class areas.

    Swanny 

    that is great advice.. I still think more than half the problem is the buyers themselves setting a return requirement that predicates them lower the neighborhood risk and standards.. also SFR and multi family are quite different as you know

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  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Hi @Jay Hinrichs

    I always leave my phones available to BP members from 3:15-6:15 PST (I live in San Diego) and am always sad when people call me after they already bought, believing from fake news regarding them thinking or lead to believe that was a C class area and really being a D class area or the Path of Progress scam.

    I like it a lot more when people call me before they buy and I can help them get their head on straight and I ask them who told them this is a solid C class neighborhood (fake news) and I give them the same advice as my last message.  Sometimes I even get on google earth together with them and I walk the streets in a 6 block radius.  If  they take the bait and already purchase, calling and telling me they thought it was a C class area by the hype it is clearly too late!!  Then they say, I want to sue etc... 

    I don't even look at the house, duplex, or quad, or apartment complex, until I take that google earth walk.  If it looks like a duck, quacks like a duck, then it is a duck!!

    Don't get me started.  I learned my lesson early on and I don't want you guys to make the same bonehead mistake.  This is my gift to you all.  By the way, I was included in the new book by Brandon and Josh that came out October 29th.  I'm glad I can be of help to investors here on BP.

    Happy Holidays and Happy New Year!!

    Swanny

    4Reply
  • Brian S.
    Rental Property Investor · Cleveland, OH · Member since 2016 · 126 posts · 71 votes
    7y

    I'm also from Cleveland and just want to make a few points. While I have property in the suburbs, I do not plan on buying any more properties in Cuyahoga county for a few reasons:

    Taxes are sky high in a lot of areas surrounding Cleveland.

    Water and sewer prices are also outrageously high.

    Lot of old properties and I'm done dealing with basement issues.

    Cleveland winters are brutal and hell on homes (part of my last point above).

    Losing population.

    Also like @Aaron David Horton I am overseas for work and not in Cleveland. I do not plan to return to Cleveland to live after my time abroad is done. I'll be relocating to FL at some point, so my other reasons for not buying in Cleveland anymore also have to do with me not living there in the future

    I hate to be so negative about my hometown but the reasons above just turn me off to the real estate market there. 

    Brian

    3Reply
  • Jeff Brower
    Real Estate Agent · Willoughby, OH · Member since 2014 · 560 posts · 690 votes
    7y

    @Jay Hinrichs @Michael Swan you guys are spot on. I cringe when I see advertisements for houses around here for 30k, duplexes under 50k, etc. I know some of swanny's property areas and he is right about the neighborhood rankings. I have only helped one investor from Cali, he was a realist and purchased a nice SFR down the street from where I lived. It is safe, he is getting a good return, zero repairs to complete, and it is a 20 minute drive to downtown. People do try to chase numbers and end up in war zones, that is not smart. You can still get great returns if you look outside the city just a little bit. Taxes are something that people forget to consider but it definitely bites them. 120k duplexes in Shaker that bring 1k rent each side look great until you consider the 7k tax bill.

    Swanny, I haven't talked to you in a while. Hope all is well! I cant agree with your statement more about walkability. If I don't want to live there, I will not consider buying there. 

    1Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    7y

    @Michael Swan

    @Jay Hinrichs

    Since I started researching and investing in that area. I have noticed a trend where houses you could buy for $30k that need rehab are now being listed much higher. I also noticed a house I was following on Trulia that needs a complete rehab in Euclid was originally listed for $35k. A couple days later they increased the price to $59k. Nothing has been done to the house, I believe the owner and the broker are just inflating the price because of the run on investment properties in the Cleveland area. 

    Buyer Beware, is right! 

    1Reply
  • Allison Mueller
    Turnkey Real Estate Provider · Cleveland, OH · Member since 2017 · 52 posts · 23 votes
    7y
    Originally posted by @Kristopher Hanks:

    @Michael Swan

    @Jay Hinrichs

    Since I started researching and investing in that area. I have noticed a trend where houses you could buy for $30k that need rehab are now being listed much higher. I also noticed a house I was following on Trulia that needs a complete rehab in Euclid was originally listed for $35k. A couple days later they increased the price to $59k. Nothing has been done to the house, I believe the owner and the broker are just inflating the price because of the run on investment properties in the Cleveland area. 

    Buyer Beware, is right! 

    Kristopher, that could be a great point. I have seen similar things happen but not so specifically more of a general upward trend in prices for houses that need to be renovated. The fix and flip market is HUGE right now especially here in Cleveland.

    1Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Hi @Jeff Brower,

    It is really important to talk to investors, that invest in a certain area too.  That way you can get a good realistic picture of an area.  I am in the process of replacing a roof at this time of the year too on part of an apartment complex.  That will be about $15,000-$18,000 when all is said and done.  You need to plan for events like this in NE Ohio.  Your budget needs to be reflective of that.

    Swanny

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Swan:

    Hi @Jeff Brower,

    It is really important to talk to investors, that invest in a certain area too.  That way you can get a good realistic picture of an area.  I am in the process of replacing a roof at this time of the year too on part of an apartment complex.  That will be about $15,000-$18,000 when all is said and done.  You need to plan for events like this in NE Ohio.  Your budget needs to be reflective of that.

    Swanny

     Swanny a little off topic.. however when you talk about checking out google earth for a few blocks around.. We just closed on a large development in Oregon that I am building out.. and as part of the marketing for our website I have had a top notch drone shooting the project from all angles.. this one has top quality optics..  I have to think if some looking at an area seriously like you do.. hiring a good Drone pilot to run it up and down the streets in all different points of the compass that would give you real time look see at the Neighborhood..  I was impressed

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  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    Hi @Jay Hinrichs,

    Great suggestion!! That is Current up to date pics.

    Smart!!!

    Swanny

    1Reply
  • Chris RochePro Member
    Rental Property Investor · North Weymouth, MA · Member since 2015 · 146 posts · 44 votes
    7y
    @Michael Swan Great info! Do you have a realtor or PM you would recommend in the Cleveland area?
    0Reply
  • Matt Urbas
    Contractor · Painesville, OH · Member since 2018 · 11 posts · 11 votes
    7y

    I live in Painesville, Ohio. I remodel houses all over the east side suburbs of Cleveland. If you ever want current pics of a property or neighborhood let me know. 

    0Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    7y

    hi @Chris Roche,

    I sold all my 1-4 unit properties and have moved to Multifamily. If I were you, I would get about 7-8 residential agents, with offices in those communities you are interested investing in. They often get pocket listings that are not on the MLS yet. Also, they have PM they suggest too and you can interview their suggestions. Make sure you send them a Bank Statement with account numbers marked out to prove you are a serious buyer and not a talker.

    Swanny

    2Reply
  • Steve Sherman
    Los Angeles , CA · Member since 2017 · 56 posts · 17 votes
    7y
    @Jay Hinrichs alrhough I haven’t been to Cleveland, but you have to do real due dilligence, before putting your money in. Cleveland, just like many other good cities, took a huge plunge during the 2007 recession. Spend at least a week there and literally drive around every neighborhood in the day and at night, to understand what’s good and what’s not and to really assess your risk tollerance. That, paired with economic statistics of the city, occupancy levels on particular blocks where you wanna buy, should help make an educated decision on this.
    2Reply
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