Cleveland neighborhoods, investing

16 Replies

I am looking at a property in the North Collinwood area of Cleveland, Ohio. Im told it is a C-/D+ area.

I’m wondering what everyone’s thoughts are on this area.

The numbers for the property make sense. My agent has brought me the property before putting it on the market.

Ok, we’ll that’s good. You’ll need specialized help in the area.  Make sure they are reputable and not some jo schmo from round the way. My Managment team is a keller Williams office and they straight out told me up front they they and many others steer clear from that area. 

Originally posted by @Chelsea Jeffers :

@Jacob Graves

Duplex, Asking 70 but can probably get it for 65

Needs about 4,000 in work

Pure cash flow is about 500 using conservative calculations.

What is the expected rent?

 

@Chelsea Jeffers

Isn’t that between Euclid and East Cleveland? I was under the impression that those are two declining areas that are bad for crime from what I’ve heard locally. I’d be suspicious of that amount of cash flow from a property that price and in those areas. There are “deals” like that on Facebook here all the time but I think you end up becoming a D class landlord with lots of evictions and headache. That’s just my opinion from what I’ve heard, I’m sure others can give a more solid recommendation.

Ricardo,

I'm also with Keller Williams....out here in the East Bay.

Chelsea, 

If that is the area I'm thinking then it is actually an F neighborhood. 44110. To be blunt I'm surprised a duplex over there would go as high as 65-70K. If your Realtor is telling you $500/mo in pure profit then the what are they basing this on.

Cleveland Water and NEORD will probably be about $125-150 per side

No lawn maintenance this time of year, but in the summer you will have that

In F neighborhoods turnover will destroy your profits as well as tenants just being hard on the property in general. 

You may have a PM now that says they can do the job but you always wan to have AT LEAST two other very solid PMs that can step in. As another poster said, "Joe Schmoe the (1 man operation) PM Guy may say they can handle it but....."

And when they say it needs about $4,000 of work.......that's another red flag. You can buy a duplex for $65-70k that is rent ready and/or has long term tenants in it in legitimate B and C neighborhoods out there. 

On "Paper Returns" are just that, on paper.

Originally posted by @Chelsea Jeffers :

@Ricardo Navarro my property management company manages quite a few in that area.

I am definitely still skeptical.

Hey Chelsea... from seeing who you worked with to buy your other property recently, it looks like you're working with Haven/Azzam... North Collinwood varies quite a bit, and yes, Haven manages quite a few properties there (including mine). They don't tend to steer their clients majorly wrong so I honestly don't think you need to be too concerned. My North Collinwood properties are solid performers. North Collinwood tends to get better as you progress north/east. Some of the blocks closest to the lake are actually commonly occupied by 6-figure-earning professionals. The difference between a property on Hale Ave. off of E. 140th for example and a property on East Park Dr. off of Lakeshore Blvd. could not be more stark (yet they are both technically North Collinwood). The other commenters probably don't understand how nuanced and variable this neighborhood is. Let google maps (street view) and census data (income, vacancy rate, etc.) be your friend and show you just how bad (or decent) any neighborhood actually is. I have created a map of the Cleveland area that is derived solely from data (rather than anecdotes/opinions) to show risk level for each census tract and would be happy to show you... just inbox me if you're interested.

There is a big difference between North and South Collinwood in my opinion.  I happen to be a fan of North  Collinwood for single family rentals but less so for doubles.  That being said I wouldn’t turn down a great deal on a double in that area.  

North Collinwood has little pockets that are trying to revitalize. Search for Beachland Ballroom on Waterloo on Google Maps and you'll see a couple block area where there has been some investment. My main concern for that area would be what impact COVID has had on the entertainment venues since they're really anchoring the revitalization attempt.

Originally posted by @Chelsea Jeffers :

I am looking at a property in the North Collinwood area of Cleveland, Ohio. Im told it is a C-/D+ area.

I’m wondering what everyone’s thoughts are on this area.

The numbers for the property make sense. My agent has brought me the property before putting it on the market.

 There has been a lot of hype on that area for awhile. Nothing special about it one way or the other so I never got all the hype. Pretty typical D grade area. Section 8 is your friend when it comes to investing in neighborhoods like this.

I live and work east of Downtown Cleveland by about 20 mins. I would be vary careful looking into these cheaper east side properties that appear to cash flow on paper (the ones 5-15 mins East of Downtown, yes that small difference in proximity can make or break you). Real world is a different thing. I have helped some californians but only those interested in paying 80-100k for a nice single family in B- and up neighborhoods out of war zones. I work in Euclid for my full time job and have rentals in Eastlake and Willoughby (Lake County, east of Cleveland by 20 mins). I recommend East of Euclid starting around Wickliffe/Willowick and moving out East from there. I would recommend finding a good agent that will take the time to show you homes where they themselves would be willing to live. I wont help someone buy somewhere that I wouldnt live personally. Look for nice, updated homes that arent going to have any capital expenditures in the near future. I bought a nice SFR in Eastlake this spring for 113k, 20% down, $665 PITI, $1250 monthly rent. It was built in 2006 and wont require a roof, HVAC, etc in a long time. Not the greatest cash on cash return, but beats the 1% rule, I have solid tenants who pay on time every month with a 2 year lease, and I havent had to go fix one thing over there. Look for these, you will thank yourself in the long run. Buy something nice if you want to be more hands off. If anyone wants pointers on Lake County cities I will offer you my opinion. You can definitely find similar deals to the one I described above on the west side and south, I just do not have specialized experience in those areas. 

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