Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
I am really trying to stay positive but I feel like I have been spinning my wheels for the last 3-4 mos. I have evaluated 100s of properties , toured and budgeted well over 50 properties, put offers on on 7 or 8. Each offer was either beat out or ignored. I thought I had a house in Shaker this week and got beat out last minute by an all cash offer, even though mine was more. On the rental side finding houses that cash flow with high property taxes is next to impossible.
I am marketing to Probate cases as well. I developed a program that will pull names and addresses in my target area. I got 3 responses from my first mailing: 1 angry person, 1 nice person but wanted off my list, and 1 apartment that slipped through my screening. :( I know it takes longer, but I was hoping for at least 1 lead on a 130 letters.
I am on several buyer lists, but most of the wholesaling offers I have received are WAY high on ARV and way low on renovation.
I just feel frustrated. I have a lot of passion, I feel like I have a lot of knowledge. I have a contractor a realtor and 5 or six lenders ready to go, I just feel like I am missing something! Any thoughts or ideas?
Investor · Brooklyn, NY · Member since 2017 · 47 posts · 25 votes
9y
The missing ingredient that's never talked about in any entrepreneurial venture is "armor" and what I mean is reading Bio's, success stories which BiggerPockets has a whole forum on that.
I currently use the MLS to get my deals. Granted is a tough? yes. but who said life was easy?
I'm up at 4:30am looking at what came up on the MLS/Zillow/Trulia etc. it that extreme? maybe yes?
But how fast you want to be financial free? you must do what folks won't do.
Rental Property Investor · Cleveland, OH · Member since 2016 · 227 posts · 287 votes
9y
@Christopher Blanco I'm analyzing a ton of MLS deals in similar areas and seeing a lot that would cash flow. I put in a conservative rent (usually 50-100 under what Rentometer says is median for the area) and use 10% PM and 7% each for vacancy, repairs, and capex. Taxes are definitely killer in Shaker Heights, but even there I'm seeing some that would work.
Are they turning out to have major problems when you tour them?
Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
9y
@Gwen Fyfe some of them, yes. Others just don't provide a good BRRR opportunity. Some will cash flow at the price offered, but if I look to BRRRR them then at the new ARV and 70% loan to value the cash disappears.
Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
9y
@Christopher Blanco I had all the same issues you are having as far as the paralysis goes. I let the fear of losing money delay me from taking that first step. Finally I just went for it. My money was not doing me any good just sitting there in the bank account. At some point you just have to go for it. I own three rentals in Cleveland now. Two of them are cash flowing nicely and the rehab on the third one is almost complete and it will cash flow close to $600 per month based on the market rents in the area. Buddy, you just have to go for it. By the way, the third house is one that I sent your way to analyze. I saw that it was still on the market a month later so I bought it for $12,500.
@Christopher Blanco I had all the same issues you are having as far as the paralysis goes. I let the fear of losing money delay me from taking that first step. Finally I just went for it. My money was not doing me any good just sitting there in the bank account. At some point you just have to go for it. I own three rentals in Cleveland now. Two of them are cash flowing nicely and the rehab on the third one is almost complete and it will cash flow close to $600 per month based on the market rents in the area. Buddy, you just have to go for it. By the way, the third house is one that I sent your way to analyze. I saw that it was still on the market a month later so I bought it for $12,500.
Chris,
I would have to agree with some others on here. Cleveland and its surround suburbs can cash flow, you just need to find the right home in the right city. On both the East and the West sides there are great places with decent taxes that flow nicely. As others have mentioned, homes prices in the NE Ohio market are climbing and they are expected to continue. Make sure you keep an eye on the market. If you see something you like come up, jump in! Set yourself up so you are ready when the time comes.
Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
9y
@Christopher Blanco, I'd have to agree with many others on this thread. I have out of state investors call me up and buy 5-10 at a time, most of them right off the MLS. I get it, it's scary to drop a ton of money on something when it's your first time doing it. You don't want to get burned. Sounds like your in a little analysis paralysis mode though.
@Christopher Blanco I hate hearing you are struggling to find cashflowing properties. Are you using the calculators on BP? Can you share a report from one of the "failed" properties along with the addresss. I have to agree with the others, there must be something broken in your formula. This city is covered in C & B properties that have excellent cash flow. Are you getting to the table first or are you putting in offers on properties that have multiples? I certainly am finding more properties than I have the cash to close on. 15%-20% ROI on buy and holds are everywhere. Look closely and you will see 20% +.
Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
9y
@Brad Fausett I am getting beat out on every offer I put in. People are overpaying for properties by quite a bit. The last few I got beat on were flips, the last rental I got beat on, someone paid almost 11K over what I would have offered. I am ONLY interested in C and up and will not go into the D neighborhoods in Cleveland. If you have some properties that you need to pass up on, send them my way! :) I am happy to pay finders fee for anything I close on.
For calculators I am using the spread sheet software called HouseFlippingSpreadsheet.com. Its the software J Scott recommends. It does flip, rental, and wholesaling calculations.
Lets break this down a bit more. What is your primary goal right now, are you looking for a flip or a rental. In a scenario as you decribe sometimes it is best to take a step back and focus on a single task. Given you are missing on both lets pick one to focus on. As for your rating scale, are you working off a neighborhood sheet that tells you what they are, do you drive the neighboorhoods and determine what the area is like. I will not invest anywhere that I would not live. I drive the neighboorhoods and often times turn down properties that look really good.
I will send you a message on one property that has great potential for rental.
Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
9y
I started out looking to flip houses. Then I started reading and researching more and decided that I would let the property decide my exit strategy. I want to do both. I want to flip to build cash, I want to do BRRRR to build a portfolio. I want to make this a business, so the avenue that takes me there is the one I am going to take. I am not interested in 1 or 2 investments and then I am done. When I come across a deal, I analyze it as a flip first, then a rental. When I get beat out, its normally in a multiple offer situation.
Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
7y
@Alyssa Dyer Wow so much has happened since this post! I did complete 4 flips, but it wasn't until I discovered how to market to potential sellers off-market that I had any success. Since this time I have hired a coach and plan on expanding my business to mainly focus on rentals. Nice to connect with you, shoot me a message if you want to talk more.
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
7y
@Christopher Blanco will do! Yeah I do everythinggg off market. It's crazy the headache on market puts people through! Try telling me to put in 30 offers a week haha!
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
7y
Gotcha well I'm happy to provide info on finding deals in OKC if you want to compare it where you've been looking or just apply strategies that I use here, there! I'll connect with you!
I started marketing to probate. I used a software program I wrote to pull cases and addresses down from the probate website. I then worked on crafting a message (it took a few tries to get it right, need to be really sensitive).
For the rentals, I am taking a different approach. I am picking the market with a high demand for rentals, creating an avatar for that renter, then going after properties that match that description. Makes marketing a whole lot easier when you have a target.
@Christopher Blanco Wow! that is amazing you can write your own software program. And your mailers you have sent out from this has worked good for you? How do you suggest someone like me, who does not know how to write software programs to pull lists? The only website I have really seen is listsource.
@Christopher Blanco Wow! that is amazing you can write your own software program. And your mailers you have sent out from this has worked good for you? How do you suggest someone like me, who does not know how to write software programs to pull lists? The only website I have really seen is listsource.
Yeah definitely a huge bonus if you are a wholesaler who can data mine. Essentially you can create your dream lists and the only cost will be a little sweat. Best part about this is you will be assured all of your data is up to date and accurate since you produced it yourself. great work with that Chris.