New to Real Estate · Akron/Cleveland, OH · Member since 2020 · 15 posts · 19 votes
5y
@November Morris Since you mentioned these are your first properties - how familiar are you with East Cleveland? Have you been there in person? As an almost lifelong Clevelander, I’d recommend a lot of due diligence before purchasing properties in East Cleveland.
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
5y
@November Morris
I remember hearing recently where someone did this but came to the closing table for two properties at once. It is definitely not a common practice, I’m sure it’s much easier to blanket them after the seasoning period but maybe it’s possible. Are you attempting value add with a refi following?
Rental Property Investor · Mason, OH · Member since 2015 · 97 posts · 136 votes
5y
@November Morris The short answer is yes, but they are more difficult to find. Your best option is to reach out to the smaller lenders and credit unions in the area. I’d offer some suggestions but I’m only familiar with lenders in the greater Cincinnati area. I’m doing the same thing and having trouble getting it done due to some lenders pulling back due to COVID 19 and the eviction moratorium. Another thought is private lenders who maybe looking for 7-8% long term returns.
New to Real Estate · Akron/Cleveland, OH · Member since 2020 · 15 posts · 19 votes
5y
@November Morris Since you mentioned these are your first properties - how familiar are you with East Cleveland? Have you been there in person? As an almost lifelong Clevelander, I’d recommend a lot of due diligence before purchasing properties in East Cleveland.
Rental Property Investor · Member since 2020 · 16 posts · 8 votes
5y
Have you reached out to a commercial lender at a local community bank? Terms will be a little different than conventional financing with slightly higher rates likely. I would think that might still be a better option than hard money!
I remember hearing recently where someone did this but came to the closing table for two properties at once. It is definitely not a common practice, I’m sure it’s much easier to blanket them after the seasoning period but maybe it’s possible. Are you attempting value add with a refi following?
Yes, most of the units are currently occupied, but we would make improvements where possible. If we have to purchase all cash, then yes refi would definitely be in the plans after seasoning.
@November Morris The short answer is yes, but they are more difficult to find. Your best option is to reach out to the smaller lenders and credit unions in the area. I’d offer some suggestions but I’m only familiar with lenders in the greater Cincinnati area. I’m doing the same thing and having trouble getting it done due to some lenders pulling back due to COVID 19 and the eviction moratorium. Another thought is private lenders who maybe looking for 7-8% long term returns.
Good advice. Do these smaller local lenders work with out of state investors usually?
@November Morris Since you mentioned these are your first properties - how familiar are you with East Cleveland? Have you been there in person? As an almost lifelong Clevelander, I’d recommend a lot of due diligence before purchasing properties in East Cleveland.
Not familiar at all and never been there. Nothing beats boots on the ground, but we are doing the best we can researching these neighborhoods and connecting with Clevelanders in the area. We're comfortable working in D class neighborhoods though. Properties we're researching are in the Forest Hills and Mt Pleasant areas. Any thoughts you have on these areas would be appreciated.
Have you reached out to a commercial lender at a local community bank? Terms will be a little different than conventional financing with slightly higher rates likely. I would think that might still be a better option than hard money!
Investor · Tampa, FL · Member since 2017 · 123 posts · 109 votes
5y
Due diligence is very nice. My blunt advice - don't invest in that area of Cleveland until after you have flown out there, canvassed areas of interest with your team (the trusted group of local professionals who will be your eyes and ears) and you get back on the plane home confident in closing the deal.
I know a few guys who have lost their shirt in that area.
Rental Property Investor · Orlando, FL · Member since 2016 · 135 posts · 145 votes
5y
@November Morris
Each bank has their own criteria. Just let them know right at the beginning that you are investing from out of state and they should be able to say if they can help you or not.
Another thing to keep in mind is that interest rates are higher and amortization periods are shorter with these loans than with conventional loan. Make sure you factor that in when running your numbers.
We are out of state first-time investors wanting to purchase 2-3 separate MFH properties in East Cleveland, Ohio all under 50k each.
Are there non-hard-money lenders who can finance all three under one loan? Is it even possible?
Any tips would help. Thanks
Hi November, I have some contacts for some hard money lenders here in Columbus, OH. I'm unsure if they will do a package loan but I'd be happy to share the contact.
Investor · Charlotte, NC · Member since 2018 · 33 posts · 25 votes
5y
I agree with Ryan Beam, I lived in the Cleveland area for 30+ years, I live out of state now but East Cleveland is a pretty rough area, where crime is high. I would recommend connecting with a local real estate agent before making any decision, as they can provide you the best advice. I'd be happy to discuss certain areas if you want my take.
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
5y
@November Morris I think it would be worth your time to call 5 or 6 of the smallest banks and credit unions in that market and ask to speak to the commercial lender. Tell them what you'd like to do. You may be surprised on what they're able to accomplish.
I've had success in getting multiple properties on one loan with those types of banks in my market. The smallest banks/credit unions are usually the best fit for this in my experience.