Investor seeking advice in the Cleveland OH area

9 Replies

I'm looking for my next deal in Cleveland and was wondering if anyone that has any experience investing in the Cleveland area or anyone that lives in the area would give me some of their opinions on the Shaker Heights Area 44120. would you classify this area as a C class? I'm looking for a decent area in Cleveland with an all cash budget of 30-60k. I am very open to hearing from all of you, primarily those invested in the area. with an all cash purchase, I'm very content with a 9-10% net ROI. Also looking for a good home Inspector and property management in the area. any and all recommendations would be very much appreciated. Best, Junior

Junior,

I live in Shaker Heights and invest locally. I’m happy to answer any questions. Right off the bat I’d say $30-$60k in Shaker with point of sale is going to be tough. Escrow and repairs will easily set you $60k it above, even if you buy low.

Hi Lincoln, I very much appreciate your reply. would you recommend any zip codes in the area that will work within my budget?

@Junior Picanco

Why are property taxes so high in Cleveland, Ohio? It comes out to 5.5% of sales price? I'm in southern california, and my property taxes are about 1.1% of sales price. 

Terry

Originally posted by @Junior Picanco :
I'm looking for my next deal in Cleveland and was wondering if anyone that has any experience investing in the Cleveland area or anyone that lives in the area would give me some of their opinions on the Shaker Heights Area 44120.

would you classify this area as a C class?

I'm looking for a decent area in Cleveland with an all cash budget of 30-60k. I am very open to hearing from all of you, primarily those invested in the area.

with an all cash purchase, I'm very content with a 9-10% net ROI.

Also looking for a good home Inspector and property management in the area. any and all recommendations would be very much appreciated.

Best, Junior

Junior. Welcome to BP! 

When someone is looking at investing out of state I like to remind them that it's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

As for the Cleveland market specifically, check out The Ultimate Guide to Grading Cleveland Neighborhoods. It will more or less answer the majority of the questions you have presented here.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

Shaker has a Point of Sale and you should check if you need to put money in escrow while you make repairs

Also Shaker has higher property taxes. If your buying close to Shaker Square it's a solid area, then you're on a block by block case.

Originally posted by @Junior Picanco :
I'm looking for my next deal in Cleveland and was wondering if anyone that has any experience investing in the Cleveland area or anyone that lives in the area would give me some of their opinions on the Shaker Heights Area 44120.

would you classify this area as a C class?

I'm looking for a decent area in Cleveland with an all cash budget of 30-60k. I am very open to hearing from all of you, primarily those invested in the area.

with an all cash purchase, I'm very content with a 9-10% net ROI.

Also looking for a good home Inspector and property management in the area. any and all recommendations would be very much appreciated.

Best, Junior

 Shaker Heights is a great area! The only issue is the taxes. Have you looked at surrounding areas? Places like Cleveland Heights or South Euclid? They are similar, but with much lower taxes. 

Tom Ott, Real Estate Agent in OH (#2016003865)
440-749-4043

@Junior Picanco

I am an out of state investor and I own homes in Cleveland. In fact I own one in the 44120 zip code in the Mount Pleasant area. From first hand experience, I would have to say listen carefully to what everyone is saying to you in this thread. I have had some success and some monumental failure investing in this area (paid for my education), basically. I have two houses under contract right now that I am selling. Long stories behind both of them. They started out great and went down hill very quickly. 

You should listen to @James Wise on his youtube channel and listen to what he has to say about the different neighborhoods. A lot of experience being shared on that channel. 

My house in the 44120 has turned out to be a very good investment overall, but it has come with a lot of work to get it there. I also scored the house, for less than the cost of the lumber to build it, from a very tired Australian real estate investor, who was just done with being a landlord. If you consider investing in a neighborhood like the Mount Pleasant area this is the only way, in my opinion, to make money in a rough neighborhood. Buy very very cheap and rent for less than the surrounding rentals. But, I DO NOT advise it when you can get quality homes in quality neighborhoods for reasonable prices. The better neighborhoods come with higher rental rates to make up for the higher cost of the home. 

I am in the process of moving my investment money from Cleveland and going into Euclid. I would say that is the place to start looking. I am going to keep my house in the 44120 only because it is performing very well right now. I would avoid Skaker because of their POS rules. Their escrow account rules are ridiculous in my opinion. Find a nice house or duplex in Euclid that is POS compliant and collect the cash every month. 

My very humble $0.02. 

Thank you all for your very humbled responses. I Very much appreciate the feedback. I have since been doing much more research and will be shifting my focus to the Euclid area and will be in close contact with you all. God bless Junior

@Junior Picanco     I can't emphasize enough that you should look at the link @James Wise   provided to you in his post. That gives you a VERY good idea as to where to find A,B C,D and F neighborhoods. Different Zip Codes have different property tax rates and in some you'll have to deal with POS and some you won't. Yes I own rentals in Cleveland.

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