Cleveland Rehabbing in Winter? Planning on Jan purchase.

12 Replies

I finished my first property in Euclid, OH a nice duplex with finished third floor.  The top unit is a 3/2 and the bottom, mi casa pro tempora while on break from school, is a 2/2.  

Before:

After:

I will be in a position to purchase another property in January and want to know what people have had to deal with in winter rehabs?  Roof issues unseen etc?  

Excellent point, James.  Do you do any sales pre-rehab or only turnkey?  

@Joseph Gibbons   I really like purchasing properties in winter in northeast Ohio because IMO there is less competition and banks have an asset that is getting further damaged by the weather for the reason @James Wise stated which is poor preservation. Here is how I handle winter properties different from warm weather months: First Bring a flashlight. I spend about an 1 in two major spots: Basement and Attic/Crawl space. In basement I am looking on the ground for any water. Instead of trying to look at the pipes I look for the water or sign of it on the basement floor. If I see it then I try to find why. If its is a pipe GREAT I use it in my offer. I check all ceilings where bathrooms are located for any sign of water if I see it I take a picture and use it in my offer. I also look on all walls where I think plumbing can be just to try and see if any water problems exist. For the attic I am looking a at the sheathing underneath if there is insulation I am looking and feeling for damp or water stains. When is doubt assume the worst. Overall, winter buying is a tad more involved but no more risky then warmer months. The key is to present cold weather issues if they exist. Remember not to look at a busted pipe as a major issue but instead as an opportunity to get a property at a lower price. 

I would be happy to walk through a property with you  to show you how I look at a property during the winter months and identify opportunities to lower the price. Remember it is a depreciating asset more so in the winter months so use that to your advantage. 

To @James Wise  point, get the plumbing inspected.  Can't stress that enough! 

Solid point, you would hope they were properly flushed before any deep freeze but we all know that isn't a guarantee.  How often has snow cover on the roof prevented effective evaluation of roof condition?  Are you able to ascertain enough from the underside aka within the structure?  

@John Ellis  , your offer to do a walk through is very gracious and I would be a fool not to accept.  My buddy is recovering at Walter Reed in MD and will be in Cleveland with me in late December/early January.  If you have anytime available in that time frame, we could do it together as he is going to partner with me moving forward on these rehabs etc.  Very much appreciated.

I would be happy to. Just PM me when you are ready and I'll make time. 

Of the 8 REO properties I've purchased in the past year or so, we had blown pipes in either 6 or 7. Ohio has a crazy long foreclosure timeframe, which leads to many blown pipes due to lack of winterization. One house we bought was vacant 3 years. In my rehab estimates I assume every time to replace all plumbing with pex. My crew has it down pretty good and can replumb the whole thing quickly and cost effectively.

Did you end up finding something suitable in Cleveland?  Curious to learn more about the market there.

(206) 407-5452

Yes, I ended up purchasing two properties in February and have finished one renovation and wrapping up the second in the next few weeks.  I am very pumped and will post some numbers and pictures if people are interested.  

I purchased the triplex for $16,500.  (plus a number of expenses)  

Renovation should be about $30,000.

Misc. $3,500 (the number of expenses above, title fee, inspections, legal)

Total Budget: $50,000.00

Rents are $500-$600-$600  Total: $1,700(pot month rent)x12=$20,400(pot annual income)

Expenses:

Taxes: $1,500 Management, $2,040.  Repairs/upkeep/utilities/ $3,000 Insurance, $1,500

Total Expenses: $8040.  

Net income: $12,360 (before taxes)

Yielding a pretax return of 24.72% (roughly)  

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