$ 10,000 in Cleveland, Ohio

4 Replies

Hello my name is Bobbie Dancy I inherit $10, 000. I'm new to investing and live in the Cleveland area a want to BRRRR multi units. I want to get to quads. I don't want to do it by myself, however I want at least understand deals, the art of the deals. Where should I start? Who should I know? How to search for deals? What am I looking for when comparing the 2% 50% 70% rule.

Hey @Bobbie Dancy

Congrats on the 10k and glad you're interested in investing in my home town!

My suggestion for you is to try and save a little bit more. The reason is 10k won't be enough to by into an area that isn't F/D grade in today's market. 

If you don't know what I mean by grade, read this: 

https://www.biggerpockets.com/blog/2015/12/09/class-a-b-c-d-real-estate/

Since you are novice, I would suggest finding a small multi in a C/B area and getting you feet wet there. 

Also I wouldn't base my investment choice solely on the 2% rule. On average, properties in Cleveland will do 1%, and the places that do produce 2% rents will be F areas, which I do not recommend a new investor try as their first purchase. 

Here are a few graphics that should help you start your search while you save a bit more for a down payment. 

The first map shows the grades of sub-markets in the Cleveland area. The next one shows the rent to price ratios (2% rule) for each area. The darker the color, the higher the yield. 

Originally posted by @Bobbie Dancy :

Hello my name is Bobbie Dancy I inherit $10, 000. I'm new to investing and live in the Cleveland area a want to BRRRR multi units. I want to get to quads. I don't want to do it by myself, however I want at least understand deals, the art of the deals. Where should I start? Who should I know? How to search for deals? What am I looking for when comparing the 2% 50% 70% rule.

You'd need at least $50,000 or $60,000 in cash to pull off a BRRRR. $10,000 just isn't enough cash to get a deal that's so beat up that you can BRRRR it out. You need to buy highly distressed real estate to do a successful BRRRR. If I were you I'd look to use my $10,000 as an FHA down payment on a duplex. That'd be the move as you can get some nice duplexes in the $80,000-$120,000 range. All of which would only require 3.5% down.

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