Really want to get into the Cleveland market who’s doing deals out there?
Hey Marc welcome to the site man. Tons of folks are hitting Cleveland as it's fairly cheap. However it's pretty similar to most of the other flyover markets. You also can hit up Kansas City, Dayton, Toledo, Cincinnati, Birmingham, Memphis, Indianapolis, Detroit and more or less anything in the fly over states.
One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. 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.
Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
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.
P.S.
That guide @Ben Halabi shared with you above is pretty solid. Many investors were very excited when I wrote it. I would appreciate it if Ben wouldn't continue to steal my Intellectual Property and try to pass it off as his own though...That's pretty lame dawg! Here is the original The Ultimate Guide to Grading Cleveland Neighborhoods. In addition you may be interested in the same type of guide that I've created in Birmingham, Alabama and Kansas City, Missouri.
Multifamily Investor · Newport Beach, CA · Member since 2015 · 176 posts · 182 votes
6y
Hey @Marc Prompt great to see you on here. Why are you interested in Cleveland? Grew up there? Have friends there? You love being there? I've heard mixed reviews, and when I was there I didn't see the appeal unless you were looking for 3-4 unit deals in C class areas, which is not a bad play by any means, just limited feeling...
If you're set on it, Kenny Wolfe with Wolfe Investments is syndicating multifamily deals out there...
Really want to get into the Cleveland market who’s doing deals out there?
Cleveland is one of the best turnkey market and the most popular for investors because of high rental demand and low cost of entry With that said, don’t go for the cheapest house in the market. The first thing you will want to do is check out this Cleveland Price & Neighborhood Map which will help you have a better understanding of the general market in Cleveland. Good luck!
Really want to get into the Cleveland market who’s doing deals out there?
Hey Marc welcome to the site man. Tons of folks are hitting Cleveland as it's fairly cheap. However it's pretty similar to most of the other flyover markets. You also can hit up Kansas City, Dayton, Toledo, Cincinnati, Birmingham, Memphis, Indianapolis, Detroit and more or less anything in the fly over states.
One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. 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.
Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
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.
P.S.
That guide @Ben Halabi shared with you above is pretty solid. Many investors were very excited when I wrote it. I would appreciate it if Ben wouldn't continue to steal my Intellectual Property and try to pass it off as his own though...That's pretty lame dawg! Here is the original The Ultimate Guide to Grading Cleveland Neighborhoods. In addition you may be interested in the same type of guide that I've created in Birmingham, Alabama and Kansas City, Missouri.
New to Real Estate · Cincinnati, OH · Member since 2019 · 51 posts · 15 votes
6y
@James Wise why make sure your PM company is a brokerage? I'm just starting to get involved in REI and I read several threads last night about whether to get a real estate license as an investor or not. Seems like it's about a 50/50 split on that question. Some people even said they gave up their real estate license but still manage their brokerage license (as an investor). I thought a real estate broker was basically a supervisory real estate agent with extra experience and training (and state licensing) but I guess that's not the case?
@James Wise why make sure your PM company is a brokerage? I'm just starting to get involved in REI and I read several threads last night about whether to get a real estate license as an investor or not. Seems like it's about a 50/50 split on that question. Some people even said they gave up their real estate license but still manage their brokerage license (as an investor). I thought a real estate broker was basically a supervisory real estate agent with extra experience and training (and state licensing) but I guess that's not the case?
This is super important. For starters it's illegal in almost all 50 states to manage property 3rd party without being licensed. So obviously someone running an illegal operation is reason in itself not to work with them. Beyond that the reasons for that law are important. The general public needs a governing body to oversee this stuff to protect the public's interests. Ya see, when you are property management company millions and millions of dollars flow in & out of your hands all the time.
Each state has a Division of Real Estate who oversees broker operations & requires broker's to adhere to incredibly strict accounting procedures, audits and care of all of this money that flows in & out of their hands that is that of the client's (you) or the tenant's. Think earnest money, rents before they are disbursed to the client (you) & tenant's security deposits. It adds up quickly. Hell at any given point & time I believe there is between $1 million & $1.5 million in my trust account. That money isn't mine. It's client's (you) & tenant's money. Can't just have any Joe off the street make a website & then put um in charge of that kind of money, it would be disastrous. For example to become a licensed broker where I operate (Ohio) you need to go through government background checks, have worked in real estate as a sales agent under another broker for at least 2 years, have a college degree, have a physical store front with office hours, have done at least 40 transactions and much more that I can't think of off the top of my head right now. All of this provides the public with more protection against major theft or loss of funds.
I shared maps for Kansas City & Birmingham above. Hopefully my guy Ben doesn't try to put his name on those as well.
So are you creating these maps from scratching using a tool you built/own? Or can anyone make them? I'd be interesting in doing this/buying this for my local markets if such a service exits.
@James Wise why make sure your PM company is a brokerage? I'm just starting to get involved in REI and I read several threads last night about whether to get a real estate license as an investor or not. Seems like it's about a 50/50 split on that question. Some people even said they gave up their real estate license but still manage their brokerage license (as an investor). I thought a real estate broker was basically a supervisory real estate agent with extra experience and training (and state licensing) but I guess that's not the case?
This is super important. For starters it's illegal in almost all 50 states to manage property 3rd party without being licensed. So obviously someone running an illegal operation is reason in itself not to work with them. Beyond that the reasons for that law are important. The general public needs a governing body to oversee this stuff to protect the public's interests. Ya see, when you are property management company millions and millions of dollars flow in & out of your hands all the time.
Each state has a Division of Real Estate who oversees broker operations & requires broker's to adhere to incredibly strict accounting procedures, audits and care of all of this money that flows in & out of their hands that is that of the client's (you) or the tenant's. Think earnest money, rents before they are disbursed to the client (you) & tenant's security deposits. It adds up quickly. Hell at any given point & time I believe there is between $1 million & $1.5 million in my trust account. That money isn't mine. It's client's (you) & tenant's money. Can't just have any Joe off the street make a website & then put um in charge of that kind of money, it would be disastrous. For example to become a licensed broker where I operate (Ohio) you need to go through government background checks, have worked in real estate as a sales agent under another broker for at least 2 years, have a college degree, have a physical store front with office hours, have done at least 40 transactions and much more that I can't think of off the top of my head right now. All of this provides the public with more protection against major theft or loss of funds.
That all makes sense to me. I'm new to the industry (I'm a recovering IT Architect) but in my head I figured there are plenty of reasons to have broker requirements for purchase/sale of property, but I guess I was expecting property management to have its own set of rules/licenses/requirements.
I'm in Ohio as well but I'm down at the other end of the state where we don't get the "Lake Effect" weather this time a year :)