Rental Property - Cleveland

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Rental Property - Cleveland

Alon A.
Investor · Member since 2023 · 135 posts · 47 votes

Hi guys

My profession is a contractor and project manager but i live in California.

Im new to the BRRRR and i would like to start investing my first property in Cleveland, Ohio.

I kind of still wonder if its good to start investing over there, i did a lot of research and all the cities i want are for the next level but I need to start small. (i really like to invest in Raleigh , Austin, Durham, Charleston, Tampa.. but i feel that i need more money for that and i'm not ready to get into this market, a lot of competition. 

 I have 120K on side for investments, and I'm planning to take loan , no cash, that i can focus on fews things and not only 1 property.

The reason I want to invest there is because the properties there are cheap then all other places. i thought also on San Antonio, Corpus christi in Texas but prices there going 150-200K already...

What do you think on Cleveland for start? any other recommendation or its good market to focus? Ill be happy to hear what do you think for about what i said.

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Zeke Liston
Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
3y
Quote from @Alon A.:

Hi guys

My profession is a contractor and project manager but i live in California.

Im new to the BRRRR and i would like to start investing my first property in Cleveland, Ohio.

I kind of still wonder if its good to start investing over there, i did a lot of research and all the cities i want are for the next level but I need to start small. (i really like to invest in Raleigh , Austin, Durham, Charleston, Tampa.. but i feel that i need more money for that and i'm not ready to get into this market, a lot of competition. 

 I have 120K on side for investments, and I'm planning to take loan , no cash, that i can focus on fews things and not only 1 property.

The reason I want to invest there is because the properties there are cheap then all other places. i thought also on San Antonio, Corpus christi in Texas but prices there going 150-200K already...

What do you think on Cleveland for start? any other recommendation or its good market to focus? Ill be happy to hear what do you think for about what i said.


 Hi Alon, it sounds like Cleveland is a good market for what you're looking for. The city has good cash flow and a lower entry point. If you'd like, I can get you in touch with some contacts in the area (contractors, lenders, PMs, etc). 

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  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    3y
    Quote from @Alon A.:

    Hi guys

    My profession is a contractor and project manager but i live in California.

    Im new to the BRRRR and i would like to start investing my first property in Cleveland, Ohio.

    I kind of still wonder if its good to start investing over there, i did a lot of research and all the cities i want are for the next level but I need to start small. (i really like to invest in Raleigh , Austin, Durham, Charleston, Tampa.. but i feel that i need more money for that and i'm not ready to get into this market, a lot of competition. 

     I have 120K on side for investments, and I'm planning to take loan , no cash, that i can focus on fews things and not only 1 property.

    The reason I want to invest there is because the properties there are cheap then all other places. i thought also on San Antonio, Corpus christi in Texas but prices there going 150-200K already...

    What do you think on Cleveland for start? any other recommendation or its good market to focus? Ill be happy to hear what do you think for about what i said.


     This will be dependent on what you're after. If cashflow is something that would be a deal maker for you, go to Cleveland. Cashflow is King over there.

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

    I think I'll be going into escrow on a sf in Cleveland later today. I will be paying cash for this. I am interested in finding a partner or two to go in on a second or third property in Ohio. I have a few properties in mind and would like to share notes


     How are you buying a property out there without a team, HUGE mistake, 

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

    @Alon A. I think Cleveland is a great place to get started building a long term rental portfolio. The returns aren't as high as they were a few years ago, but you can still get good cashflow. As @Bob S. mentioned there is currently very limited inventory for Multi Family properties. I'm personally a West Side guy, I prefer suburbs there. A couple advantages to the West side of Cleveland are lower property taxes and only a few cities require Point of Sale inspections. 

    Let me know if you need any help getting started.

    Happy Investing!


     We buy everywhere including parts of East Cleveland as we know what is coming. I just got a 3 over 3 1 block from Shaker, all in under 100k Rent will be about 24k a year with net about 16 17k, ,

    0Reply
  • Forrest T Schue
    Investor · Member since 2022 · 106 posts · 67 votes
    3y
    Quote from @Alon A.:
    Quote from @Jay Thomas:

    It's essential to consider the POS inspection process when evaluating any potential Real Estate investments. Knowing the costs associated with such an inspection ahead of time can help you make a more informed decision and set realistic expectations for your investment. It's important to factor in all related costs into your calculations, as they could potentially impact profitability down the line. Don't forget to look into local regulations that may apply as well - it's always better to be safe than sorry! By doing your research and understanding the process, you can ensure that your Real Estate investments are successful.


     I can’t agree more with you ! 

    how do I check about what inspections I need for the property ? And POS is only in Ohio ? I’ll appreciate explaining on that a bit , I looked online but I’m confused how this things calculated 

    I know that before you buy property and after you offer accepted you have inspection period that you can bring inspector that will check plumbing , electrical and condition of all house and give you report , on top of it also engineer that will check foundation. 

    That’s the POS or is different? 

    Thank you 


     Hey Alon, I'm also a California investor who's new to the Cleveland area. The POS, or Point Of Sale, is an inspection done by the city to check off their list of repairs they want done to the property when it gets sold. This is separate from the estimate your contractor will give you. Keep in mind that not all cities require this, so you'll learn which do and don't in your area.  

    This can be things like exterior trim and paint, sidewalk repair, tree removal, and sewer repairs. I recently learned on a deal that I had an offer accepted on, that the POS required a paved driveway, instead of the gravel one that was currently there. 

    This can be a good thing, because many times you can have the seller pay for these inspections, and it's another set of eyes on your deal. 

    I recently retracted from contract with a property that was found to have major drainage issues that the POS inspector found, which was causing backyard flooding and basement leakage.

    This will be my first property there, I'm eager to get a home closed! If you want, I have a really great agent I've been working with, and can send you his info. 

    1Reply
  • Alon A.
    OP
    Investor · Member since 2023 · 135 posts · 47 votes
    3y
    Quote from @Tim Debronsky:

    @Alon A. I think Cleveland is a great place to get started building a long term rental portfolio. The returns aren't as high as they were a few years ago, but you can still get good cashflow. As @Bob S. mentioned there is currently very limited inventory for Multi Family properties. I'm personally a West Side guy, I prefer suburbs there. A couple advantages to the West side of Cleveland are lower property taxes and only a few cities require Point of Sale inspections. 

    Let me know if you need any help getting started.

    Happy Investing!

    thank you 

     You think that only multi family worth it ? 

    What if I get single family with good cash flow also , right it’s not going to be a lot but for start and 1st property it should be good no? 

    0Reply
  • Tim Debronsky
    Full-Time Investor & Agent · Amherst, OH · Member since 2014 · 149 posts · 50 votes
    3y

    I own all SFR. Both SFR and MF will cashflow. Cashflow will be a little better with MF, but I feel like tenants stay longer with SFR. Just my opinion.

    0Reply
  • Alon A.
    OP
    Investor · Member since 2023 · 135 posts · 47 votes
    3y
    Quote from @Forrest T Schue:
    Quote from @Alon A.:
    Quote from @Jay Thomas:

    It's essential to consider the POS inspection process when evaluating any potential Real Estate investments. Knowing the costs associated with such an inspection ahead of time can help you make a more informed decision and set realistic expectations for your investment. It's important to factor in all related costs into your calculations, as they could potentially impact profitability down the line. Don't forget to look into local regulations that may apply as well - it's always better to be safe than sorry! By doing your research and understanding the process, you can ensure that your Real Estate investments are successful.


     I can’t agree more with you ! 

    how do I check about what inspections I need for the property ? And POS is only in Ohio ? I’ll appreciate explaining on that a bit , I looked online but I’m confused how this things calculated 

    I know that before you buy property and after you offer accepted you have inspection period that you can bring inspector that will check plumbing , electrical and condition of all house and give you report , on top of it also engineer that will check foundation. 

    That’s the POS or is different? 

    Thank you 


     Hey Alon, I'm also a California investor who's new to the Cleveland area. The POS, or Point Of Sale, is an inspection done by the city to check off their list of repairs they want done to the property when it gets sold. This is separate from the estimate your contractor will give you. Keep in mind that not all cities require this, so you'll learn which do and don't in your area.  

    This can be things like exterior trim and paint, sidewalk repair, tree removal, and sewer repairs. I recently learned on a deal that I had an offer accepted on, that the POS required a paved driveway, instead of the gravel one that was currently there. 

    This can be a good thing, because many times you can have the seller pay for these inspections, and it's another set of eyes on your deal. 

    I recently retracted from contract with a property that was found to have major drainage issues that the POS inspector found, which was causing backyard flooding and basement leakage.

    This will be my first property there, I'm eager to get a home closed! If you want, I have a really great agent I've been working with, and can send you his info. 

    Thank you 

    Usually when you do inspection for job you hire private inspector and private engineer to check all issues . (Contractor is the stage after)

    In this case your hire the city right ? Correct me if I’m wrong , They check foundation and structural also ? 

    Let’s say we are not in OH , and we are in texas , so how it is different 

    0Reply
  • Bill Forrest
    Inspector · Cleveland, OH · Member since 2015 · 13 posts · 8 votes
    3y

    The City of Cleveland proper does not perform Point of Sale Inspections.  However, the City of Cleveland requires Lead based paint clearance inspections on rental properties.  Some of the suburbs do require a POS inspection.

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

    Cleveland would be a good place to start, inventory has slowed a bit, but I do a lot of cold calling and have been able to keep a steady flow of deals. It's really good for cashflow, so if that's your goal it'd be a good place to start! The city of Cleveland doesn't require a pos but some surrounding municipalities do. Happy to chat more on the subject if you shoot me a message!

    2Reply
  • Robert Brunson
    Rental Property Investor · Richmond, VA · Member since 2018 · 15 posts · 9 votes
    3y

    @Zeke Liston would you be able to connect with me any viable Agents and PMs in the area. I'm looking for smaller commercial units 5-20

    2Reply
  • Amir B.
    Rental Property Investor · Elk Grove, CA · Member since 2016 · 306 posts · 76 votes
    3y

    @Drew Sygit The first link didn't work. 

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Alon A.

    don't do this:

    https://www.biggerpockets.com/...

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Amir B. try this link
    https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

    The problem is, BP archives our older blogs, so you may have to go to our website to find the rest.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    0Reply
  • Muhammad Abdullah
    Investor · Cleveland, OH · Member since 2012 · 145 posts · 39 votes
    3y

    Cleveland is an excellent place to invest but its safer to do it with someone local, create a JV arrangement and don't purchase with an out of state corp you had better be local. The city and courts are not favorable to foreign entities when there's a problem but this is real estate theirs always going to be a problem. I've been in the Cleveland market for almost 30 yrs and I can't find a better market with these returns.

    2Reply
  • Harrison Chow
    Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes
    3y
    Quote from @Alon A.:

    Hi guys

    My profession is a contractor and project manager but i live in California.

    Im new to the BRRRR and i would like to start investing my first property in Cleveland, Ohio.

    I kind of still wonder if its good to start investing over there, i did a lot of research and all the cities i want are for the next level but I need to start small. (i really like to invest in Raleigh , Austin, Durham, Charleston, Tampa.. but i feel that i need more money for that and i'm not ready to get into this market, a lot of competition. 

     I have 120K on side for investments, and I'm planning to take loan , no cash, that i can focus on fews things and not only 1 property.

    The reason I want to invest there is because the properties there are cheap then all other places. i thought also on San Antonio, Corpus christi in Texas but prices there going 150-200K already...

    What do you think on Cleveland for start? any other recommendation or its good market to focus? Ill be happy to hear what do you think for about what i said.


    Hi Alon! Cleveland is renowned for its robust cash flow prospects. All you need to do is pick the correct community, I can furnish you with a rough guide. However, if you're also considering appreciation, Columbus is the ideal location. The city is growing rapidly, with numerous big corporations moving to the region in the upcoming months - bringing in an a surge of new residents and an abundance of job opportunities. Hope this helps and would be happy to chat more with you regarding the subject!







    2Reply
  • Forrest T Schue
    Investor · Member since 2022 · 106 posts · 67 votes
    3y

    In the cities that require a POS be done, either you or the seller will have to pay for it. They should be looking at foundation and things too, but it depends on what their specific list of requirements are(how strict they are). 

    0Reply
  • David Leggett
    Real Estate Broker · Cleveland, OH · Member since 2018 · 227 posts · 133 votes
    3y
    A lot of great comments on here!  I'm late to the party, but there are a lot of good cash flow areas in and around Cleveland that don't have Point of Sales.  But they can be brutal in some cities like Cleveland Hts and University Hts, but they're pretty manageable in cities like Maple Hts and Garfield Hts, you just need to know some good contractors that can do cement work.  They always kill you on the cement stuff!  But it can be a good bargaining chip for buyers who can take on a little work and can ultimately get a good deal on a property since a lot of time the seller might not be able to fulfill the requirements to fix the violations themselves and that they're ultimately responsible if the property doesn't sell.  
    1Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    3y
    Quote from @Robert Brunson:

    @Zeke Liston would you be able to connect with me any viable Agents and PMs in the area. I'm looking for smaller commercial units 5-20


     Absolutely. 

    0Reply
  • Pradeep Shrestha
    Investor · Cincinnati, OH · Member since 2022 · 34 posts · 13 votes
    3y

    I am not sure about Cleaveland but Cincinnati is good too. If you have six-figure savings, it would be best to invest in a multifamily. It's a lot less risky. 

    1Reply
  • Alon A.
    OP
    Investor · Member since 2023 · 135 posts · 47 votes
    3y

    Hey All

    I read that Cleveland job growth and population is decreasing.

    Why is that and how the rental property stay same?

    0Reply
  • Jeffrey Reynolds
    Member since 2022 · 13 posts · 0 votes
    3y
    Quote from @Bob S.:
    Quote from @Alon A.:

    Hi guys

    My profession is a contractor and project manager but i live in California.

    Im new to the BRRRR and i would like to start investing my first property in Cleveland, Ohio.

    I kind of still wonder if its good to start investing over there, i did a lot of research and all the cities i want are for the next level but I need to start small. (i really like to invest in Raleigh , Austin, Durham, Charleston, Tampa.. but i feel that i need more money for that and i'm not ready to get into this market, a lot of competition. 

     I have 120K on side for investments, and I'm planning to take loan , no cash, that i can focus on fews things and not only 1 property.

    The reason I want to invest there is because the properties there are cheap then all other places. i thought also on San Antonio, Corpus christi in Texas but prices there going 150-200K already...

    What do you think on Cleveland for start? any other recommendation or its good market to focus? Ill be happy to hear what do you think for about what i said.

     Cleveland has been the number 1 overall rental market for about 10 years, still in the top 5 . Forbes had it number 1 2017- 18 but hey too were not paying attention. Prior to 2017 you were be able to get 25- 30% net caps (based on cash purchase) with all in pricing of about 40k. Now 8-14% net at about all in 100k- 120k ish,. prices have doubles tripled or more and seem to be still going strong.  MF were 5k per unit, now 45- 65k and there is simply no inventory. Biggest mistake I made was not keeping about 50 of the 500 or so I flipped, HUGE mistake. However you need to be cash if you want a great deal, then you can refi cash out. DO NOT try and go it alone there, it will not end wll. You must have a team in place to handle it all

    Good luck 

    This is great info. For folks in CA like myself, even those higher prices are much more palatable than anything here. Thanks for the input. 
    0Reply
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