New to Real Estate · CA · Member since 2020 · 19 posts · 13 votes
Hi BP
New Investor out of CA, making the move into REI in the Northern Ohio (Cleveland) area. Seeking quality contractors, handyman and investor friendly real estate agent referrals...and friendly warnings. My friend and I will be flying out next month to get familiar with different areas. All advice on the market appreciated.
If you're going to be an absentee investor, the main focus of your trip should be to find a trusted advisor, more than trying to learn the market. As another poster mentioned, there is a vast array of investment possibilities here, which can be separated into levels of risk and levels of return. Generally speaking, the worse the condition of the property, the higher the cost of rehab, but the higher the potential of return. These properties carry a higher risk in terms of cost, but a much higher return potential. The advantage is that you control the entire rehab process, including providing for future mainteance. The choices made during rehab can come back to haunt. The other end of the spectrum are turnkey properties, where the property is rehabbed, often with a tenant in place. The risk is lower in terms of cost - you're paying a fixed price and you have an idea of return, but you dont know the quality of the work, and you don't know the quality of the tenant.
The investors that I work with generally provide guidance as to what they want to achieve for returns but stay pretty much out of the overall process. It's a better relationship if you are not going to be hands-on with management. If you structure your acquisitions properly, you can either be a sole investor or you can be part of a small group of investors getting into multiple properties together, with shared returns. It lowers the indivdual risk somewhat, and usuall yields higher returns because you increase your purchasing power.
Also be aware that Ohio law requires that property managers must be licensed, and must be affiliated with a real estate broker. There are firms that will offer to manage your property, but you need to make sure that there is a licensed Ohio broker involved. This is a protection for you.
Hi Remee. As an investor who moved from Socal to cleveland in 2019, you should definitely check out ohio city and tremont. It is cool to see the gentrification in person. Also prepare for a bit of a culture shock driving through some neighborhoods if you have never been to an older gentrified city. I stayed in East Bank Flats and it convinced me to consider moving here so that's another cool place to check out.
Message me if you want an investor focused agent recommendation.
If you're going to be an absentee investor, the main focus of your trip should be to find a trusted advisor, more than trying to learn the market. As another poster mentioned, there is a vast array of investment possibilities here, which can be separated into levels of risk and levels of return. Generally speaking, the worse the condition of the property, the higher the cost of rehab, but the higher the potential of return. These properties carry a higher risk in terms of cost, but a much higher return potential. The advantage is that you control the entire rehab process, including providing for future mainteance. The choices made during rehab can come back to haunt. The other end of the spectrum are turnkey properties, where the property is rehabbed, often with a tenant in place. The risk is lower in terms of cost - you're paying a fixed price and you have an idea of return, but you dont know the quality of the work, and you don't know the quality of the tenant.
The investors that I work with generally provide guidance as to what they want to achieve for returns but stay pretty much out of the overall process. It's a better relationship if you are not going to be hands-on with management. If you structure your acquisitions properly, you can either be a sole investor or you can be part of a small group of investors getting into multiple properties together, with shared returns. It lowers the indivdual risk somewhat, and usuall yields higher returns because you increase your purchasing power.
Also be aware that Ohio law requires that property managers must be licensed, and must be affiliated with a real estate broker. There are firms that will offer to manage your property, but you need to make sure that there is a licensed Ohio broker involved. This is a protection for you.
New Investor out of CA, making the move into REI in the Northern Ohio (Cleveland) area. Seeking quality contractors, handyman and investor friendly real estate agent referrals...and friendly warnings. My friend and I will be flying out next month to get familiar with different areas. All advice on the market appreciated.
New Investor out of CA, making the move into REI in the Northern Ohio (Cleveland) area. Seeking quality contractors, handyman and investor friendly real estate agent referrals...and friendly warnings. My friend and I will be flying out next month to get familiar with different areas. All advice on the market appreciated.
@Remee Martin, I'd be interested in hearing how this goes for you. I'm new to REI here in SoCal and keep going back and forth on sticking locally and going long distance.
@Remee Martin, I'd be interested in hearing how this goes for you. I'm new to REI here in SoCal and keep going back and forth on sticking locally and going long distance.
I know its horrifying LOL Im actually flying out to Chicago tonight... going to start there. Simplying because I have boots on the ground there that will keep a eye out for me. But for CLEVELAND, especially since I dont have boots there, I have to say check out @JamesWise and his group. Disclaimer, I haven't worked with them myself, yet. But will, once I dive into that market. Check them out on YouTube (like really do it lol). Ive learned SO much about the market in Cleveland, and honestly investing in income properties as a whole. His channel is REALLY good. They do everything from MLS searching for properties, to Title and Insurance. I thrive working with no BS type people. And he's got that personality which I absorb information from easily. If you don't know WHERE to begin, start there. Even if its just for the knowledge base. Again, havent worked with them personally. But I figure after all the valuable info Ive learned, I can give him a shout out...think he left a comment on this thread with a link to evaluating neighborhoods in Cleveland, also.
I started out in California and looked elsewhere as well once the pricing got too crazy here. Especially in LA and the Bay area, it's very hard to make any cash flow here.
Just a few words of wisdom from someone who has made a lot of money AND lost a lot of money in Cleveland - Be very careful who you work with. Biggerpockets is an amazing place to network and find people with similar trajectories as you, but it's terrible at vetting people. Do TONS of research before you sign up with anyone, especially for property management. I've gone through 3 companies and self-managed for a stretch before finding a good one. Even with a small portfolio (less than 10 units) a bad PM can cost you tens of thousands of dollars per year. My advice is get referrals from different places and don't rely on a referral that the company you are vetting gives you. They will give you a cheerleader, which is worse than getting no-referral. I like to ask the referral for other people that use the company so that I get someone who isn't prepared to give a good report. Or, you can just hop on here and start a post about a specific company and you will get all sorts of responses.
It sounds like you are well on your way to doing great things in Cleveland and I wish you the best of luck! Keep in touch, I'll be happy to chat about deals we are both working on.
Hey Remee, I lived in Cleveland for 4 years and know most of the different areas pretty well. If you want to reach out about any questions on areas I’d be more than willing to share what I know. Plus I don’t have anything to sell you haha. I just enjoy talking about the Cleveland market and would love to learn from your ideas too.
Hi Remee- there are a lot of compelling reasons to look in to turnkey properties since you are out of state. If you already have an idea of your ideal neighborhood or the right market, and your overall goals- start there and find the ideal operator for you. Asset class, type of tenants, property management -these are all niches that go into finding a great provider and someone you can trust.
@Remee Martin Building a team is going to be crucial if you're planning on doing rehabs remotely. And careful which neighborhoods you get into. Cleveland has a lot of cheap/high cashflow, but rough neighborhoods.
@Remee Martin congratulations on getting started here in Cleveland! I agree with the other posters who mentioned that property management is KEY. Those people are going to be your first line of defense, your eyes, your ears and generally the keepers of your kingdom. You have to find a good one who you feel comfortable working with. Talk with a lot of people, get references and I like what @P.J. Bremner suggested about posting the company on BP to see what people say. Keep in mind that people generally only review things for which they have very strong opinions, good or bad. Some of the most consistent companies may fly under the radar for that reason. Just be prepared to keep close tabs on what's going on no matter who you pick.
As for other referrals, my husband and I live here and own property here and we have worked with a lot of people over the years. Happy to share some referrals for whatever you may need. Please feel free to shoot me an inbox if you want to discuss further. I'm happy to help in any way I can.