Cleveland, OH Advice on Areas And Deal Analysis

Wholesaler · Los Angeles, CA · Member since 2018 · 41 posts · 16 votes

Hello BP,

Just briefly I'm looking for a real estate agent or investor familiar with the Cleveland, Ohio area. I've obviously already used James Wise guide (https://www.biggerpockets.com/...) but there were some discrepancies in the comments regarding one area, in particular, I was looking into.

Also with the information, I'm trying to get an accurate deal analysis going on this property here: https://www.biggerpockets.com/calculators/shared/1052029/585303ea-ad0e-44bd-8f8c-4ae2c4855875

If anyone could let me know how that analysis looks and if they know more about the Cleveland market, it would be greatly appreciated.

**PS if anyone has any insight to investing in Dayton or Cleveland and which they prefer and why that would also be very helpful

Thanks!

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John KosterPro Member

Investor · Valley Village, CA · Member since 2012 · 147 posts · 142 votes

@Jonathan K.

I have had a few duplexes in the surrounding area over the last few years. From my experience repairs and Cap Ex have generally been15-20% of rent. Water & Sewer which include waste collection have been $180-230. Insurance $70. Electricity will be on the tenants except during vacancies and will run no more than $20. Also I would factor in 10% for property management. 8% usually is only attainable with larger multi-family buildings. If you have that arrangement, great. Also, PMs will charge a month's rent for filling vacancies, which raises that 10% figure upwards.

Also 5% for vacancies was fine last year, or even last month, but I would figure a higher percentage. I have heard some people recommending 25% or even 30-40%. I was not a landlord at the beginning the last downturn, so I am not talking from experience on this, but vacancies will definitely be higher in the next two years.

Good luck!

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Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
On the outside looking in a place that gets you the 2% rule in that zip code is excellent. One of my rentals is also in the West Boulevard area. Your P&I of $266.01 seems off...you don't want to get confused and think your mortgage, taxes and insurance total is that figure.....it will probably be more like $580.00/mo which is still pretty good. I'm not saying to definitely buy it because you need to look at the appraisal and home inspection but it is certainly worth looking in to.
1 Reply
Ryan Evans
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
6y
On paper it works and looks like a nice place. I was over that way yesterday looking at another double and was about to check that one out as well, but I looked on street view and it's awkwardly on the edge of a bunch of commercial properties which turned me off of it.
0 Reply
Jonathan K.
OP
Wholesaler · Los Angeles, CA · Member since 2018 · 41 posts · 16 votes
6y
Thank you, @Brian Garlington I appreciate the information. Do you like any other areas in Cleveland?
0 Reply
Jonathan K.
OP
Wholesaler · Los Angeles, CA · Member since 2018 · 41 posts · 16 votes
6y
@Ryan Evans why was that a deferring factor in your decision? What did you like about the property?
0 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
6y
Originally posted by @Jonathan K.:
Hello BP,

Just briefly I'm looking for a real estate agent or investor familiar with the Cleveland, Ohio area. I've obviously already used James Wise guide (https://www.biggerpockets.com/...) but there were some discrepancies in the comments regarding one area, in particular, I was looking into.

Also with the information, I'm trying to get an accurate deal analysis going on this property here: https://www.biggerpockets.com/calculators/shared/1052029/585303ea-ad0e-44bd-8f8c-4ae2c4855875

If anyone could let me know how that analysis looks and if they know more about the Cleveland market, it would be greatly appreciated.

**PS if anyone has any insight to investing in Dayton or Cleveland and which they prefer and why that would also be very helpful

Thanks!

Have you looked into any other Ohio markets?
[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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Jonathan K.
OP
Wholesaler · Los Angeles, CA · Member since 2018 · 41 posts · 16 votes
6y
@Remington Lyman I have slightly looked into dayton, but otherwise am pretty unfamilar with Ohio as whole.
0 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
6y
Originally posted by @Jonathan K.:
@Remington Lyman I have slightly looked into dayton, but otherwise am pretty unfamilar with Ohio as whole.

Let me tell you about Columbus, Ohio...
[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
Reafco512 Reviews
Website View Page
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Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Jonathan K. There's several areas I like in Cleveland. However, your determining factor should be what is alignment with your goals.
I love Section 8 tenants and have them in "C" areas of Cleveland. The CMHA can be a bit of a hassle regarding the red tape but it is guaranteed income which is what i like and the tenants tend to stay longer, which is also what i like.
Some people want "A" or "B" areas with white collar tenants only because of a variety of reasons.
Others want stuff in "D" or "F" areas because on paper it looks like it cashflows real nice (News flash, in reality it doesn't so DO NOT buy in those areas).
Everything is academic until you get pre-approved with a lender.........otherwise this is just speculation.
2 Reply
Lesley Ray
Architect · San Francisco, CA · Member since 2017 · 89 posts · 41 votes
6y
@Jonathan K. Looks good overall! However I would factor in something ($5,000-$10,000) for repairs to give yourself a cushion. Unlikely that it will need absolutely nothing done.
1 Reply
Lesley Ray
Architect · San Francisco, CA · Member since 2017 · 89 posts · 41 votes
6y
@Jonathan K. Also happy to provide additional insight on Cleveland, as I invest long distance there as well.
1 Reply
Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y
@Jonathan K. That prop on Bosworth seems ok, Most important thing you will need is PM. Simply connect with those that are doing deals daily, and allow them to handle all for you. 10- 14% net caps ( cash buys, with a loan much higher COC ) are to be had 100% hands off .

Good Luck
0 Reply
John KosterPro Member
Investor · Valley Village, CA · Member since 2012 · 147 posts · 142 votes
6y
@Jonathan K.

I have had a few duplexes in the surrounding area over the last few years. From my experience repairs and Cap Ex have generally been15-20% of rent. Water & Sewer which include waste collection have been $180-230. Insurance $70. Electricity will be on the tenants except during vacancies and will run no more than $20. Also I would factor in 10% for property management. 8% usually is only attainable with larger multi-family buildings. If you have that arrangement, great. Also, PMs will charge a month's rent for filling vacancies, which raises that 10% figure upwards.

Also 5% for vacancies was fine last year, or even last month, but I would figure a higher percentage. I have heard some people recommending 25% or even 30-40%. I was not a landlord at the beginning the last downturn, so I am not talking from experience on this, but vacancies will definitely be higher in the next two years.
Good luck!
2 Reply
Account Closed
Investor · Cleveland, OH · Member since 2016 · 118 posts · 147 votes
6y
@Jonathan K. - One thing I through the years is that your success with out of state investing is a function of your people management skills, not your underwriting skills. As long as you don't make a careless mistake during the purchase your yield is only as good as the people on the ground and your ability to optimize a team.
Having said that in order to get the right people you need to think about scale. If your goal is to have one duplex and expect that it is perfectly managed by the best people that is unrealistic. You simply do not provide PMs enough opportunity to make money. If your goal is to scale than you are positioned to get better talent.
Regarding Cleveland I am a big fan. My partner and I invest in several different cities through the US and Cleveland is our best performing. As of today we are at 33 apartments mostly concentrated on the west side. DM me and I'm happy to get on a call to help as much as I can.
0 Reply
Alan McClainPro Member
Rental Property Investor · Columbus, OH · Member since 2019 · 32 posts · 12 votes
6y
@Jonathan K.
Hello Jonathan,
Can you share what your criteria is? I lived in Cleveland for 20 years (mostly on the west side and downtown) so am very familiar with the area. Personally, I like the properties closer to Kamm’s Corner. There is a plaza, bars restaurants, and access to the metro parks. Some areas near Bellaire, Almira, W100th are sketchy.
1 Reply
Michael Ohara
Investor · HI · Member since 2017 · 328 posts · 124 votes
6y
I owned a property just up the road from there on Bosworth. I would consider section 8 like @Brian Garlington said. I have 4 homes in 44110 and 44105. Some don't like these zips but they can work.
1 Reply
Daniel D.
New York, NY · Member since 2015 · 20 posts · 4 votes
5y
@Michael Ohara whose your pm ? if you don’t mind sharing.
0 Reply

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