Can you still BRRRR in Cleveland. If not, where?

Cleveland, Ohio
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Can you still BRRRR in Cleveland. If not, where?

Cameron Biggs
Member since 2022 · 9 posts · 7 votes

Hi BP

My partner and I are new to REI and interested in the BRRR method. We have been working in Cleveland as we had some connections but getting stuck with just cash flowing rentals in D/F neighborhoods, which is not our goal. We would like to BRRR to make most use of our money but feel like Cleveland may not be the location. Is this just an issue of our realtor and us not finding off market deals? Anyone have any intel On Cleveland? Is anyone having any luck with the BRRR in any other cities?

Any help is greatly appreciated!

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Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
3y

@Cameron Biggs

We've found the most success finding great deals in the secondary markets surrounding Cleveland in Akron, Barberton, etc.  Still cash flow well, and reasonable acquisition price.  Some value add opportunities as well.

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    4y

    I am not too familiar with the Cleveland market but I'd be really surprised if the only deals that appear to work are in D/F neighborhoods, it strikes me as a market that should have workable deals in better neighborhoods.  Think you may be on to something in that should consider another realtor.

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  • Steven Goldman
    Lender · PA · Member since 2019 · 533 posts · 461 votes
    4y

    @Cameron Biggs The success of the BRRRR strategy is entirely dependent on the purchase price of the property and control of construction costs. Bigger pockets members are always asking where is the best place to BRRRR? The best place to BRRRR is the place where you have assembled a strong team and are familiar with the market pricing, contractors and costs of materials. It depends more on your fund o knowledge and people than it does the geographic location. Obviously, in areas where pricing has been recently depressed due to economic or other conditions, there is usually more opportunity. but without a strong team and enough knowledge you can end up with mediocre result anyhow. Good luck!

    4Reply
  • Shane Kelly
    Real Estate Agent · Cleveland, OH · Member since 2021 · 383 posts · 361 votes
    4y

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

    4Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    4y

    One of the best ways to get started is turnkey investing because you can get started with a small downpayment and your property will be in good areas with a tenant already on the property so you will be cash flowing from day one. 

    I am based in Northern Virginia but invest primarily in small multi family in Cleveland. I started out in Cleveland working with turnkey companies and then scaled my portfolio to 12 doors. Let's connect and we can discuss further. 

    1Reply
  • Cameron Biggs
    OP
    Member since 2022 · 9 posts · 7 votes
    3y
    Quote from @Steven Goldman:

    @Cameron Biggs The success of the BRRRR strategy is entirely dependent on the purchase price of the property and control of construction costs. Bigger pockets members are always asking where is the best place to BRRRR? The best place to BRRRR is the place where you have assembled a strong team and are familiar with the market pricing, contractors and costs of materials. It depends more on your fund o knowledge and people than it does the geographic location. Obviously, in areas where pricing has been recently depressed due to economic or other conditions, there is usually more opportunity. but without a strong team and enough knowledge you can end up with mediocre result anyhow. Good luck!

    Well said Steve, thank you for your insight!
    0Reply
  • Cameron Biggs
    OP
    Member since 2022 · 9 posts · 7 votes
    3y
    Quote from @Shane Kelly:

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

    Very good to know, thank you Shane!

    0Reply
  • Cameron Biggs
    OP
    Member since 2022 · 9 posts · 7 votes
    3y
    Quote from @Aj Parikh:

    One of the best ways to get started is turnkey investing because you can get started with a small downpayment and your property will be in good areas with a tenant already on the property so you will be cash flowing from day one. 

    I am based in Northern Virginia but invest primarily in small multi family in Cleveland. I started out in Cleveland working with turnkey companies and then scaled my portfolio to 12 doors. Let's connect and we can discuss further. 

    Hey Al.  I’m definitely open to cash flow opportunities, though I admit what excites me is the BRRRR strategy; it’s such a great long term wealth building vehicle.  Ok I’ll reserve a spot on the calendar you sent previously, and I’d be interested to hear your take.  
    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    3y

    @Cameron Biggs

    I am not familiar with the Cleveland market, but I do know it is somewhat similar to Greater Cincinnati! Or maybe Columbus even (not familiar with there either). I am an agent in Cincinnati, feel free to reach out to me if you have any questions about the Greater Cincinnati market!

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  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    3y

    @Cameron Biggs you can BRRRR in Cleveland. you can BRRRR in Cincinnati. you can BRRRR in Columbus. you can BRRRR in Toledo. you can BRRRR in Dayton.

    You can BRRRR anywhere...

    Most important thing is the purchase price. Find motivated sellers and find good deals! 

    2Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    3y

    @Cameron Biggs

    We've found the most success finding great deals in the secondary markets surrounding Cleveland in Akron, Barberton, etc.  Still cash flow well, and reasonable acquisition price.  Some value add opportunities as well.

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Of course you can, you just have to find a property at %70 minus rehab 

    2Reply
  • Johnny LynumPro Member
    Investor · Leesburg, VA · Member since 2018 · 233 posts · 92 votes
    3y

    @Jon Kelly Facts!

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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    3y

    I've been BRRRR-ing for almost 15 years in a similar market (Milwaukee). And BRRRR has become much harder, because first time home buyers usually underestimate rehab cost and obviously don't have a need for profit. That drives up prices and makes deals with enough discount harder to find. I have not done a full 25% deal in years..

    However, appreciation gives you an unexpected tail wind. If you made only 10% after rehab, just wait a year. 

    And while prices may start to flatten in the rest of the country, the Midwest is getting more attention from investors, families and businesses because of lower prices, but also because we have plenty of fresh water, moderate summers, no fires and no hurricanes. I know this because we work with a lot of relocation clients.

    So on a 10 year scale it is very possible that we will see Midwest prices double (median 200k to 400k) and that would still be cheap compared to many parts of the US.

    In terms of price range, maybe you are looking in the wrong category. It is much easier to BRRRR a 150k property than a 50k property, there is more meat on the bone and the ratio between rehab cost and property value is much better! That also gets you out of the D/F areas @Cameron Biggs

    1Reply
  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    3y

    BRRRR is defiantly achievable in Cleveland. I think it may be easier to find them down in Columbus because appreciation is higher, but they can still be found. If you have any questions about areas in either city, feel free to reach out!

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    3y
    Quote from @Cameron Biggs:

    Hi BP

    My partner and I are new to REI and interested in the BRRR method. We have been working in Cleveland as we had some connections but getting stuck with just cash flowing rentals in D/F neighborhoods, which is not our goal. We would like to BRRR to make most use of our money but feel like Cleveland may not be the location. Is this just an issue of our realtor and us not finding off market deals? Anyone have any intel On Cleveland? Is anyone having any luck with the BRRR in any other cities?

    Any help is greatly appreciated!


    I think it is difficult to BRRRR anywhere. You need to have a tremendous contracting team and an excellent appraiser to get a high ARV.

    I have seen many people get great off market deals but still mess up the renovation and the appraisal

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  • Cameron Biggs
    OP
    Member since 2022 · 9 posts · 7 votes
    3y
    Quote from @Remington Lyman:
    Quote from @Cameron Biggs:

    Hi BP

    My partner and I are new to REI and interested in the BRRR method. We have been working in Cleveland as we had some connections but getting stuck with just cash flowing rentals in D/F neighborhoods, which is not our goal. We would like to BRRR to make most use of our money but feel like Cleveland may not be the location. Is this just an issue of our realtor and us not finding off market deals? Anyone have any intel On Cleveland? Is anyone having any luck with the BRRR in any other cities?

    Any help is greatly appreciated!


    I think it is difficult to BRRRR anywhere. You need to have a tremendous contracting team and an excellent appraiser to get a high ARV.

    I have seen many people get great off market deals but still mess up the renovation and the appraisal

    So true man.  Everything hinges on that pesky appraisal.  I feel confident in our team right now, but my wife is getting antsy about finding a deal haha. 
    1Reply
  • Cameron Biggs
    OP
    Member since 2022 · 9 posts · 7 votes
    3y
    Quote from @Marcus Auerbach:

    I've been BRRRR-ing for almost 15 years in a similar market (Milwaukee). And BRRRR has become much harder, because first time home buyers usually underestimate rehab cost and obviously don't have a need for profit. That drives up prices and makes deals with enough discount harder to find. I have not done a full 25% deal in years..

    However, appreciation gives you an unexpected tail wind. If you made only 10% after rehab, just wait a year. 

    And while prices may start to flatten in the rest of the country, the Midwest is getting more attention from investors, families and businesses because of lower prices, but also because we have plenty of fresh water, moderate summers, no fires and no hurricanes. I know this because we work with a lot of relocation clients.

    So on a 10 year scale it is very possible that we will see Midwest prices double (median 200k to 400k) and that would still be cheap compared to many parts of the US.

    In terms of price range, maybe you are looking in the wrong category. It is much easier to BRRRR a 150k property than a 50k property, there is more meat on the bone and the ratio between rehab cost and property value is much better! That also gets you out of the D/F areas @Cameron Biggs

    That’s really great information, thank you Marcus!  I’m very happy to hear your optimism for appreciation and that you’re seeing transplants. I agree with you regarding price of the units. If it’s under 100k, it’s troublesome to get financing and then you’re (or we’re!) not left with much money to deal with reno costs.  At that price point you’re also probably in a bad location that’s not going to appraise. Ultimately, we want to be awesome landlords with awesome tenants, and D/F neighborhoods just ain’t cutting it from our points of view. 
    0Reply
  • Kristopher Cress
    Real Estate Agent · Columbus, OH · Member since 2022 · 7 posts · 3 votes
    3y

    Hey! BRRRR is definitely possible in a lot of cities in the Midwest. I personally operate in the Columbus and Dayton areas, and there are specific pockets in Columbus where I have seen it be achievable. Dayton's market seems to be shifting a lot less and be more steady recently, so I have seen it a lot over in that area as well. I wish you best of luck in your search! Happy Investing!

    0Reply
  • Sam Bhattacharya
    Rental Property Investor · Damascus, MD · Member since 2018 · 50 posts · 31 votes
    3y
    Quote from @Shane Kelly:

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

     Is it really that bad to buy a rental property in a D neighborhood?  If more investors rehabbed properties in a D neighborhood, wouldn't that tend to improve the quality of that neighborhood over time?

    0Reply
  • Shane Kelly
    Real Estate Agent · Cleveland, OH · Member since 2021 · 383 posts · 361 votes
    3y
    Quote from @Sam Bhattacharya:
    Quote from @Shane Kelly:

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

     Is it really that bad to buy a rental property in a D neighborhood?  If more investors rehabbed properties in a D neighborhood, wouldn't that tend to improve the quality of that neighborhood over time?


     It is that bad, yes. The sentiment that you bring up is true to some extent, if the properties were bought and improved, the area would trend up in theory. But with all gentrification efforts, the displaced D-class people have to go somewhere, and that's likely to another area of the same city. This is why areas have cycles. Some go up, some go down. I still would not advise investing in a D-class neighborhood that someone is out-of-state from, and has no knowledge in. That would be poor advice.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Cameron Biggs:

    Hi BP

    My partner and I are new to REI and interested in the BRRR method. We have been working in Cleveland as we had some connections but getting stuck with just cash flowing rentals in D/F neighborhoods, which is not our goal. We would like to BRRR to make most use of our money but feel like Cleveland may not be the location. Is this just an issue of our realtor and us not finding off market deals? Anyone have any intel On Cleveland? Is anyone having any luck with the BRRR in any other cities?

    Any help is greatly appreciated!


     It absolutely is the right location; you just seem to be paying to much. You need to connect with someone that provides properties below the appraised value, not over. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Bob S.:
    Quote from @Cameron Biggs:

    Hi BP

    My partner and I are new to REI and interested in the BRRR method. We have been working in Cleveland as we had some connections but getting stuck with just cash flowing rentals in D/F neighborhoods, which is not our goal. We would like to BRRR to make most use of our money but feel like Cleveland may not be the location. Is this just an issue of our realtor and us not finding off market deals? Anyone have any intel On Cleveland? Is anyone having any luck with the BRRR in any other cities?

    Any help is greatly appreciated!


     It absolutely is the right location; you just seem to be paying to much. Remember you make your money when you buy. You need to connect with someone that provides properties below the appraised value, not over. 

    BTW your 1st mistake was using a realtor, :) 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Sam Bhattacharya:
    Quote from @Shane Kelly:

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

     Is it really that bad to buy a rental property in a D neighborhood?  If more investors rehabbed properties in a D neighborhood, wouldn't that tend to improve the quality of that neighborhood over time?


     I have been working in all of the Cleveland markets, even EAST Cleveland and have seen pricing going up everywhere double triple or more,  Heck MF are selling for 40k per unit in east Cleveland , 5 6 years ago they were 10- 15k, 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Shane Kelly:
    Quote from @Sam Bhattacharya:
    Quote from @Shane Kelly:

    There is still BRRR potential here, but as said above, you have to buy at the right price. I work with a lot of wholesalers here and have found quite a few BRRR deals for my buyers. They're typically in C, C+, or B- areas as going above that is hard to find, and going below that can be risky.

     Is it really that bad to buy a rental property in a D neighborhood?  If more investors rehabbed properties in a D neighborhood, wouldn't that tend to improve the quality of that neighborhood over time?


     It is that bad, yes. The sentiment that you bring up is true to some extent, if the properties were bought and improved, the area would trend up in theory. But with all gentrification efforts, the displaced D-class people have to go somewhere, and that's likely to another area of the same city. This is why areas have cycles. Some go up, some go down. I still would not advise investing in a D-class neighborhood that someone is out-of-state from, and has no knowledge in. That would be poor advice.


     As long as the investor has a team in place all will be ok.  I have flipped 100s and 100s and 100s in Cleveland, many near Shaker Sq, off Union and KINSMAN, all below the appraised value and all were able to be  refied  , ITS ALL about you team. It seems this person overpaid, 

    0Reply
  • Giancarlo Orozco
    Wholesaler · USA · Member since 2019 · 42 posts · 32 votes
    3y

    I work in the Cleveland market as an investor & know wholesalers here. We specialize in creative financing so id say try to lock up deals creatively to give you an edge. Or maybe you need to connect with some wholesalers there to get better deals and terms. BRRR'ing with conventional loans and with on-market deals will make it harder because your negotiating with retail pricing. Avoid East Cleveland and those D areas 100%.

    1Reply
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