Virtual Assistant · Scottsdale, AZ · Member since 2016 · 13 posts · 2 votes
I am making a potential move to Cleveland Ohio. I am looking to purchase an investment property and there are so many areas to choose. I have really been looking at 3 areas and all will work for my location to work since I personally am able to work from home. I like the area and rental rates in Lakewood, I love the homes in Shaker Heights but property taxes are dreadful and I have found Cleveland Heights to be a nice area as well. Someone please give me some ideas on these locations, what areas are great for rental return. I am also worried about purchasing older homes for investments because of all of the warnings you hear to not purchase a home older than 10 years as an investment. Thanks!
@Brandon Weisser Generally speaking, you would like to see newer houses, but we all own older houses and are just fine. Early 1900's can be a pain, but people invest in them all day long. 1950's bungalows are built like tanks, 1970's split levels can have wood siding or other features that aren't as desirable as an older house in a different setting (not wooded, for example) or they could be great. You could also buy a newer house that was thrown up by one of the production builders that is only twenty years old, but was built very cheaply, and is going to have expensive issues long term. You can buy a 1915 A frame in Lakewood that was a low end build with no insulation in the walls, a dungeon basement and 3 degree lean or a 1915 house where the people had money when they built it, ornate and standing strong. Age is only one factor among many.
Brandon. I'm not sure where you got the information about not purchasing a home older than 10 years but here in Cleveland you will have to go to the far edges to find new construction. There are multiple areas which are great for rental return which all have older homes. Cleveland is a fantastic area for investment opportunities no matter where you go, as long as your purchase price sustains that. What do you consider a good rate of return?
I live in Miami but bought a duplex up in Parma, using Nicholas Varner and the Holton Wise group.
While Parma may or may not be your cup of tea for a live-in rental (I'd call it a B-, C+ at the worst), they do also have many listings in some of the "better" B+ A neighborhoods.
I found them to be quite responsive and will be picking up more multi-families using them as my PM as well as transaction facilitators. They are extremely investor friendly; I'd definitely give them a call.
@Matt Kimple I wasnt saying I agree with the 10 year old plan but I have seen it in many investment books as well as podcasts so I just wanted an opinion. I think if I can cashflow 100 or more per month after ALL expenses I would find the deal worth my time. It will be my first deal and I can improve the process as I continue to work in the field. I plan to live on the second side of the unit and have a good down payment and great credit and a pre approval so I am not worried about that. I would like a greater cashflow and thats why I worry with areas like Shaker Heights(the area I would Love to buy in) because the tax rate has to have a huge impact on the cash flow. I see you are from shaker, do you have advice or is it possible to cash flow on a single family in the area and is it worth it?
@Ken Badziak Thank you for your response and love Florida, went to college at UF. Parma is a place I am looking into but prefer Lakewood. I like what it has to offer and has a lot of duplex opportunity. I will have to look into your suggestions as well. Thanks
The Lakewood market is on fire right now, although there are some pockets you want to stay out of. Old Brooklyn, Parma, and Cleveland Heights also are C/C+ areas. Best of luck on your search!
@Archie Antwi House hacking is an awesome idea and a great way to get into investing! What better way to have someone else pay your mortgage and build up your equity?
It'll ultimately depend on your budget. Are you looking to purchase in Cleveland proper or out in the burbs?
I really don't have a preference @Dan Mitchen. As long as it's safe and lower taxes. I'm currently live in Houston and the taxes are very high. My budget is 200k but will love lower than that. I'm mainly looking for a 4-plex but will settle for a good deal.
@Archie Antwi Lakewood does have higher taxes than Parma. The properties are larger, older, and there is a POS for investors in Lakewood. You avoid a lot of these pain points by sticking in Parma. Lakewood is targeted by investors that are trying to flip right now. There is very good shopping, quality of life in Lakewood so there is desirability there from both tenants and owner occupants. I would like to invest in Lakewood, unfortunately thus far I have not seen any opportunities where the aforementioned cons outweigh the pros. Rents need to rise in Lakewood to offset some of the challenges the market presents, which has not happened as much as we'd like thus far. Im going to keep looking there though! @Ken Badziak cheers! When are you back in Cleveland?
@Nicholas Varner thank you for your feedback on Lakewood. If you don't see a lot of opportunity to cashflow in that particular area, where are you seeing good returns? I have great flexibility with my job as well as lending. I have both a very competitive approval with conventional lending as well as a great hard money lender for deals that must start out as cash deals.
@Andrew A. thank you for your input into my question. Where have you invested at this point and was there something that you felt drew you to those/that area?
@Ryan Arth I always appreciate the worst case situation on neighborhood grading and from what I hear Cleveland is up and down from block to block but where would you say is a solid B to B- area?
I have 5 properties available in Old Brooklyn that can cash flow 12-15 %.
As long as your purchase price is good and you factor in ALL expenses prior to the deal, Anything above 10% is good. Keep ALL expenses in mind first though.
@Brandon Weisser I've lived and am now investing in Lakewood, Ohio. Let me know if you want to chat. I think Lakewood offers everything from B- to A depending on which side of the city you're on... Very interesting city (and Ohio's most densely populated as well).
Typically newbie investors forget to add taxes and the cost of their money in determining cash flow of a property. I see a lot of properties being foreclosed on for back taxes.
This is far beyond me. This does create an opportunity for people such as myself to purchase these properties for pennies on the dollar at the sheriffs auction.
Brandon Weisser the advice is in the numbers...a s you begin analyzing deals the right area will reveal itself to you. If you need help running numbers on any deal just look me up and I'll assist.