Real Estate Newbie in Cleveland, OH
New to Real Estate · Cleveland, OH · Member since 2019 · 6 posts · 2 votes
Hello all! I'm extremely excited to join the Bigger Pockets community! I'm a Newbie to real estate looking to get started in fix and flips or rental properties (preferably single family units to start). Can anyone offer any advice on obtaining some funding and first steps to take? I'm young and still building credit, so that is my biggest concern. I'm located in Cleveland, OH and for the time being, this is my area of choice to get started. Any input is appreciated!
Thank you in advance,
Arihaun Gibson
Hello all! I'm extremely excited to join the Bigger Pockets community! I'm a Newbie to real estate looking to get started in fix and flips or rental properties (preferably single family units to start). Can anyone offer any advice on obtaining some funding and first steps to take? I'm young and still building credit, so that is my biggest concern. I'm located in Cleveland, OH and for the time being, this is my area of choice to get started. Any input is appreciated!
Thank you in advance,
Arihaun Gibson
Welcome to the team Arihaun. You’ve come to the right place for real estate investing, there are many investors and brokers here with a wealth of knowledge and experience to offer about the business. You can avoid massive headaches and costly mistakes through some of the advice and experience on here, there’s plenty of pitfalls we made that you can avoid by reading and asking questions.
Cleveland is one of the best turnkey market and the most popular for investors because of high rental demand and low cost of entry, property prices are pretty inexpensive here. With that said, you have a great advantage that you live in Cleveland and it's easier for you to find the right real estate agent as well as going and checking the property yourself before buying it. I would still take a look at the Cleveland Price & Neighborhood Map . That map can still give you a good idea of where you should invest and what properties you should stay away from. Good luck!!
Welcome Arihaun! From what I've observed you shouldn't be worried primarily about the funding. The most important part will be the deal. Hard money lenders(since that's more than likely what you'll be using) are more concerned about the asset itself since that is what they will be lending on and taking away from you if you are unable to pay so they want to make sure it's a good deal first and foremost so they can still make money. Don't get me wrong they might charge you extra points and higher interest for having no prior experience but at least you're getting the money necessary for the deal and rehab. If you want to avoid some of that headache maybe partner up with someone that has an investing track record that the HML will feel more comfortable lending out to.
But good luck and welcome!
Welcome Arihaun! From what I've observed you shouldn't be worried primarily about the funding. The most important part will be the deal. Hard money lenders(since that's more than likely what you'll be using) are more concerned about the asset itself since that is what they will be lending on and taking away from you if you are unable to pay so they want to make sure it's a good deal first and foremost so they can still make money. Don't get me wrong they might charge you extra points and higher interest for having no prior experience but at least you're getting the money necessary for the deal and rehab. If you want to avoid some of that headache maybe partner up with someone that has an investing track record that the HML will feel more comfortable lending out to.
But good luck and welcome!
Hi, Jacob! Thank you so much for your input, I appreciate it and it was helpful! Do you have an HML that you would recommend going with? Or any that you know of that work with beginners?
Hello all! I'm extremely excited to join the Bigger Pockets community! I'm a Newbie to real estate looking to get started in fix and flips or rental properties (preferably single family units to start). Can anyone offer any advice on obtaining some funding and first steps to take? I'm young and still building credit, so that is my biggest concern. I'm located in Cleveland, OH and for the time being, this is my area of choice to get started. Any input is appreciated!
Thank you in advance,
Arihaun Gibson
Welcome to the team Arihaun. You’ve come to the right place for real estate investing, there are many investors and brokers here with a wealth of knowledge and experience to offer about the business. You can avoid massive headaches and costly mistakes through some of the advice and experience on here, there’s plenty of pitfalls we made that you can avoid by reading and asking questions.
Cleveland is one of the best turnkey market and the most popular for investors because of high rental demand and low cost of entry, property prices are pretty inexpensive here. With that said, you have a great advantage that you live in Cleveland and it's easier for you to find the right real estate agent as well as going and checking the property yourself before buying it. I would still take a look at the Cleveland Price & Neighborhood Map . That map can still give you a good idea of where you should invest and what properties you should stay away from. Good luck!!
Hi, Ben! Thank you for your input! Can I ask how you source out your properties? As in when searching for a property to purchase what resources do you recommend using? (Auction, Website, etc.)
I am also a new and local investor in Cleveland. I am set to close on my first property (duplex) in Woodland Hills very soon and am very excited! I looked at local banks, online lenders, and hard money lenders to get started. I didn't have enough saved up for a down payment because many lenders want 20% or more. I ended up taking a personal loan to purchase the duplex for cash with some extra taken out for rehab - this ends up being a similar high interest rate like a hard money lender. I'm not sure how this will turn out, but I expect to BRRRR it and refinance to a better rate. Your credit will help you get better rates regardless of what option you take and you may not get the best loan rates until your credit is >740.
I am also a new and local investor in Cleveland. I am set to close on my first property (duplex) in Woodland Hills very soon and am very excited! I looked at local banks, online lenders, and hard money lenders to get started. I didn't have enough saved up for a down payment because many lenders want 20% or more. I ended up taking a personal loan to purchase the duplex for cash with some extra taken out for rehab - this ends up being a similar high interest rate like a hard money lender. I'm not sure how this will turn out, but I expect to BRRRR it and refinance to a better rate. Your credit will help you get better rates regardless of what option you take and you may not get the best loan rates until your credit is >740.
Hi Daniel! Congrats on purchasing your first property, and thanks for the helpful input! If you don't mind me asking, how did you find the right property that fit for your budget and plan?
@Arihaun Gibson There's a few ways to do it if you don't want to pay for the BiggerPockets Pro membership. The BP analysis tool has 5 free trial uses and it gives you a good idea of what to look for. Brandon Turner has multiple thresholds for being a good deal: MINIMUM $100/unit cash flow and 12% return on investment. These are not the only things to look for but give a good starting point After testing it out a few times you could try to make your own spreadsheet if you're good with that sort of thing. There are also a number of free online websites that help you calculate NOI, ROI, and other metrics but they aren't as user friendly in my opinion.
For me, I am not investing any of my own money so even if I am barely meeting the minimum, it still could work in my favor.
Hello all! I'm extremely excited to join the Bigger Pockets community! I'm a Newbie to real estate looking to get started in fix and flips or rental properties (preferably single family units to start). Can anyone offer any advice on obtaining some funding and first steps to take? I'm young and still building credit, so that is my biggest concern. I'm located in Cleveland, OH and for the time being, this is my area of choice to get started. Any input is appreciated!
Thank you in advance,
Arihaun Gibson
Welcome aboard Arihaun. The 1st step to getting financing would be to speak with a traditional lender perhaps one at your existing bank as there is nothing better than a 30 year fixed rate mortgage.
Hello! I started in Cleveland. I house hacked a SFH in UH. It was the best way to get started. I lived for "free" for 3 years, and it cost me less than $5k to get into the property. I highly recommend looking for a unit you can live in while renting out the spare units or bedrooms.
@Arihaun Gibson connect with an investor , find them deals, LEARN, earn a finders fee, do enough then start doing them on your own, exactly how I started about 10 years ago
Good Luck
Keep digging through the forums and you'll find plenty of stories of people who have done what you're up against right now. Finding a partner and bringing them a deal is a much lower risk way of getting things going.
But the best thing you can probably do right now is going to talk to lenders. That's the part people are afraid of for some reason, but that's when it all becomes real. If you don't have good credit they will walk you through exactly what you need to do to get a mortgage with them. Then just start checking things off the list. Don't think about what lenders will say even if you know you're not qualified. Just start!
Welcome @Arihaun Gibson!
Welcome Arihaun!
Welcome Arihaun! From what I've observed you shouldn't be worried primarily about the funding. The most important part will be the deal. Hard money lenders(since that's more than likely what you'll be using) are more concerned about the asset itself since that is what they will be lending on and taking away from you if you are unable to pay so they want to make sure it's a good deal first and foremost so they can still make money. Don't get me wrong they might charge you extra points and higher interest for having no prior experience but at least you're getting the money necessary for the deal and rehab. If you want to avoid some of that headache maybe partner up with someone that has an investing track record that the HML will feel more comfortable lending out to.
But good luck and welcome!
Hi, Jacob! Thank you so much for your input, I appreciate it and it was helpful! Do you have an HML that you would recommend going with? Or any that you know of that work with beginners?
Most of our stuff runs through Trimark Lending first and freeland lending but there's so many more. You can absolutely find way more on this site and asking around though.