I've been receiving emails from Holton-Wise for the past few weeks, and it seems like there are some pretty good deals that may cash flow around 2-300 bucks per month with decent cap rates (10-12%). Couple questions though. 1) I am seeing properties that cost around $60K that will produce gross rental income of $1-1.4K per month. Is this realistic or are these inflated rents? Would this indicate a property needing a lot of rehab or cap ex? Generally, are these prices/rents in decent neighborhoods? 2) Is Holton-Wise actually a decent property management company or not? I looked at their BBB rating and it is not great. Are they just a turn-key scam company? If not, I see they will do some rehab. Does anyone know how this works? Would they be a good option for an out of town investor? Do you know what percentage they charge? Any other property management companies you would recommend? Same questions as above for other companies. I am looking to build a team in Cleveland (I'm out of town). 3) What is the biggest pitfall in Cleveland? 4) What areas should I avoid? 5) Are there any specific locations I should look in? Great streets / neighborhoods? I appreciate the help? Hopefully I'll be able to network with some of you moving forward.

@Chase Webster I've wrestled with investing in Cleveland for the last 3 years as I was born and raised there and I still consider it home. There's a ton of excitement in the city and positive energy that simply wasn't there before. You can definitely get strong returns (stronger than most markets in the country), but the one downside is still a lack of growth. Certain parts of the city have certainly seen a resurgence (Downtown, Tremont, University Circle, etc), but the population is still declining, albeit at a slower rate. In all of Northeast Ohio, the three cities seeing the largest decline in population are Cleveland, Parma and Lakewood according to estimates from the Census Bureau. The city is definitely divided into east side and west side. I'm from the east side and I was 20 years old the first time I went to the west side. The Holton-Wise team focuses on the west side and has a pretty good operation going. I've only met with them and did not actually invest, but had positive convos with James Wise. We were exploring an apartment building, so can't really speak to the turnkey rental side. Ultimately, I decided to purchase an apartment building in Chicago, but continue to monitor Cleveland and Cincy for future opportunities.

I haven't used HW, but I can give you my thoughts on your other questions. I moved to the Cleveland area this past summer from a pretty expensive part of the country (Triangle area of North Carolina, and before that Virginia), and was shocked at investment property prices here. I, too, wondered if the numbers were for real... So I spent a couple of months looking at properties, driving around, reading and talking to people. What I found was that yes, the numbers are for real- properties are ridiculously cheap, you can get rents of $1,000 for a $50K house or $1,300 for a $60K duplex. There are definitely areas to avoid (lots of info on BP about this) but also great areas. The consensus is that Western suburbs of Cleveland are pretty consistent and safe to invest in (Parma, Lakewood, Brooklyn). I have bought in the east, which is a little more unpredictable, because it is closer to where I live- I have properties in Cleveland Heights and Garfield Heights. I would say the property prices and rents in the safer pockets and suburbs are comparable on both sides of the city.

Chase, I went through a realization like you did with Cleveland. I'm an investor from California and did my research and decided to invest in Cleveland. Like many have mentioned the population growth is an issue, and usually go hand-in-hand with appreciation. However, Cleveland has been more lively lately. 1) I am seeing properties that cost around $60K that will produce gross rental income of $1-1.4K per month. Is this realistic or are these inflated rents? Would this indicate a property needing a lot of rehab or cap ex? Generally, are these prices/rents in decent neighborhoods? Depends what areas you are looking. I'd say average rent is closer to 1k, rather than 1.4k for a 60k property. Many of these are old homes that need renovation. 2) Is Holton-Wise actually a decent property management company or not? I looked at their BBB rating and it is not great. Are they just a turn-key scam company? If not, I see they will do some rehab. Does anyone know how this works? Would they be a good option for an out of town investor? Do you know what percentage they charge? Any other property management companies you would recommend? Same questions as above for other companies. I am looking to build a team in Cleveland (I'm out of town). I asked one of the Holton-wise agents for his list of B-class singles in Cleveland, and he sent me a list of currently available B-class properties. They are not a turn-key scam company, they are not even a turn-key company. If you want to buy a property through one of their real estate agents and not use them as property managers you can, you can choose to use them how you want to. If you want to use your own contractor or home inspector you can, but they have guys readily available if you need as well. As an out-of-town investor myself, I haven't had property management experience with them, but if they're not satisfying your needs, then switch to a different one. 3) What is the biggest pitfall in Cleveland? Older houses, lower growth, cold, high property taxes in some areas. 5) Are there any specific locations I should look in? Great streets / neighborhoods? The area I've decided to invest in through my due diligence is Parma. I like Parma because: -Largest suburb in the state of Ohio. -Affordable homes -Ranked 32nd safest in U.S. per neighborhoodscout 2014 (ranking has gone down since then, but still a really safe area) -Area is surrounded by schools: elementary, middle, high school with several amenities. -Low vacancy rates, Parma is densely populated. These are some of the reasons I decided on Parma, but I encourage you to do your own due diligence, let me know if you have any questions.

Newbie investor here but a Cleveland native for all 25 years of life!! I would agree with everything you'really saying, especially Tremont! Personally I think it's a gold mine if you can get in at the right price. The only correction I would propose is that Parma is a solid C+ to B+ area but not A class. Some may consider certain pockets, but I would personally say you have to go as far out as Broadview heights/Brecksville (south), north Olmsted (west), and rocky river/bay village (northwest) to get into solid A neighborhoods on the west side. With that said I wouldn't take anything away from Parma. The west side dosnt change street to street as much as the east side so focusing on a city as a whoke would be more appropriate than on the east where you should definitely have intimate knowledge of a potential property and the surrounding area. Personally if I planned on investing on the west side I would be in south Parma and west Lakewood. *** My Disclaimer: I grew up in a solid A neighborhood on the east side. And have also lived in F Cleveland proper neighborhoods.

You know how Bellevue compares to Seattle? Parma is like that for Cleveland, just smaller and closer. High incomes, nicer area etc... i would say it is an A/B type area. But i personally don't like focusing solely on A/B properties mainly because I'm mostly focused on income. I find that C type areas often yield tenants who stay for long periods of time. The property has just purchased has 1 tenant who has been in the building for 20 years and many who have been there for 10. I do feel Parma is a great area to purchase a single family home if you get it at the right price and you are focused on equity growth. Brooklyn/Old Brooklyn is not far and some areas are not quite as nice but it is also an area that has potential. Also if you can find a deal in Tremont that is reasonable you should consider it. It is the trendy new spot for all the hipster types. .. once again comparing to Seattle think Capital Hill. But as I said before i would strongly encourage anyone who invests to visit first. Get to know the area and the people. When you tell them you're an out of town investor make sure they know you plan on taking care of whatever properties you buy etc... i'm up for coffee in a week or so. crazy busy this week. just send me a message. p.s. Cleveland folk.. please don't take offense to my descriptions.. and feel free to correct me :) i was only there for a week.

@Chase Webster I am investing in Cleveland and yes the ROIs can be pretty good. As stated above you need to take a trip out there and check it out for yourself. I have been out there and looked at properties and I made a couple of purchases. Nothing substitutes for putting your own eyes on the neighborhoods and the houses.

@Jason Barr I have bought in Cleveland Heights and Garfield Heights. Not horrible neighborhoods (B). One was $35K and in need of about $10K cosmetic repairs, another was $20K and needs a new roof and exterior paint, for $12-15K total repairs. The $60K with $1,300 rents are for a duplex in GH, $650 per side for a 2 bed, 2 bath. Pretty standard, actually, in any suburb of Cleveland. If you look hard enough, there are deals like this everywhere. It kills me that I need to wain until I have stabilized these properties before I can buy more.

@Chase Webster I agree with some of the others on here. Some great cities to look into might be Garfield Heights, Cleveland Heights, Shaker Heights, Euclid, Lakewood, or even Bedford. They have some amazing ROIs.

Is Cleveland as good as it seems?

Michael Azzam

Real Estate Agent · Cleveland, OH · Member since 2016 · 21 posts · 9 votes

9y

We manage close to 30 properties in the Parma area, and all have been relatively solid investments in my opinion. I personally own 3, and they actually require less attention than properties I own in other areas. The schools are in a bit of a transitional period, but overall I believe it's still a healthy market.

Is Cleveland as good as it seems?

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