Cleveland Bank Owned duplex

13 Replies

My first deal I'm scared!!! I just bought a duplex on auction for 18 k. Zillow estimate 66 k. I live in California I think I made emotional purchase my Mom was from Cleveland. It was take as is no inspections. I am new to BP but I ran the BRRRR with assumptions rents of 500 x 2. expenses of 630.00 Any advice would be appreciated. I have 24 hours to sign contract but questioning my decision. Thank you John

I have no experience - disclaimer!  First of all, congrats on taking a big move on this!!!  No matter how it turns out you're making progress and moves which is the most important thing in my book.

But...man I would have a difficult time with the decision having no eyes on the property myself.  How could you know how much it might need put into it to get it rentable?  So it sounds like it's in Cleveland. 

That's a great question Dan! I guess I'm thinking I have an out IF i don't proceed forward with signing . I am taking a leap of faith that my Mom is watching over me ...I can only hope! Thanks for the comments and good luck to you too!

Do I have this straight that you bought this duplex without ever having seen it, personally or anyone on your behalf?

If you did, I would call an agent or a property inspector immediately and ask them about the property and to go take a look at . I saw CA people do this around 2008, saying how could they lose on an 8k property. Unfortunately the prop in question was a tear down in east Cleveland that wouldn't have been worth 8k even if it wasn't leaning and condemned. 

Some neighborhoods are worth nothing because you can't get them managed either. And based on the area and quality you might not want to even know about the person that might rent it.

Ryan I did try contacting someone but did not get over to see it and I have until around 6 pm tonight to sign or opt out which I'm leaning towards. Daryl the property is  3572 e 154th st  zip code 44128 

@John Halligan

That may be a decent area of Cleveland but it's hard to say for sure without visiting the street. Be careful buying property sight unseen and remotely. I talk to a lot of out of town investors that do that very thing and end up buying garbage. In areas with lower sale prices it's possible to buy a house that will cost more to rehab than it will be worth, effectively making the house worthless. Matters are compounded if the property is condemned as the city will sue the owner for tear down costs.

Timothy Murphy III, Real Estate Agent in OH (#SAL.2016005240)
440-941-3846

That address is right on the border between Shaker and Cleveland so somewhat of an iffy neighborhood.  I've worked with a few homes just east of there (Pennington, Ludgate, and Chelton).  These were SFRs that rented for $1,000 or so.  I think $500 per unit is a pretty conservative estimate for the address you gave.  You can probably get between $600 or more if you fix the units up nicely.  

I think this would be a fine place to own a rental and the numbers should work but I would be hesitant to go all in without assessing the amount of repairs needed.  Without knowing your repair cost, you really have no measure of your investment required.

Thanks Adam I agree . It was as is property and to do my first deal I would not want to have any unexpected surprises that could come up. I appreciate your feedback and all others preceding. Thx again

@John Halligan

Love the gunslinger mentality but you need some eyes on this thing amigo.

I imagine the Zestimate is so high because the algorithm is pulling comps in a quarter or half mile radius thus those Shaker homes are pulling it up.

I am going to assume this house is beat to hell and even if it wasn't it wouldn't be worth 66k.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

Thanks James appreciate the feedback.

I hope your deal went well! I am from California as well! If you need any help or boots on the ground im in the Cleveland area now and invest there! I can be your boots on the ground if you need that in the future! Thanks!

Thanks Kristopher I ended up not going into that deal but appreciate the feedback. Thank you John

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