just sold my first sub 30k house in cleveland

[Guy Haramaty]

so, after a lot of reading on bp about the dificelties of a profit from a sub 30k house- i had to test it myself. the numbers on paper were just too good.

button line- we've lost money on our first house. but, we have learned so much- that the next one will be very profitable.

the highlits:

my brothers and i bought a 18k house in a neighborhood of 50% ownership, no Abandoned houses- but still a rough neighborhood. the house was broken into 3 times! (they cut copper and wires)

we put in to it 1 month of self work (learned from youtube) plus hired a professional (for the shower and kitchen) at total of 20k.

we sold it just now for 35k (lost 7k)

the good thing is that i can notice the mistakes:

1. we've upgreaded the elctrical sistem at a bout 4k. most buyers dont care for that and it cause a lot of holes in the old plaster wall (much worse the dry wall)

2. we didnt paint the outside- thinking it less important (its very important)

3. we used stick on tiles instead of vinyl floor (1 days extra work), replaced windows that were old but not in a bad shape and a few more extras there and to littles here...

4. to stress to buy (we were not local and had a flight back home) and to sell (we thought the snow slow the market down- its not so true)

to summaries it:

dont buy a house with electrical issues, bad windows, and rough exterior.

dont be afraid from holes in the walls, old paint or pluming issues- those are reliability easy to fix and drop the purchase price dramatically.

now we will buy 2 more houses with a purchase price of 12-20k, remodeling budget of 8-10k.

we predicts a 15k profit on a flip and 20% roi on a rental (1 house for each niche)

i leave you with some pictures

[Andrew A.]

@Guy Haramaty

I did my first live and flip in Cleveland in 2017 as well. Bought at 16.5k and sold for 90k. Some luck some hard work. I moved here from California. Hired many contractors throughout this project fired most of them and I ended up doing a lot of the work myself but in that I found my passion in woodworking (I'm an artist and truly enjoy creating cool interiors). The market has changed drastically since I first was perusing the MLS in 2016. Less deals to be found in emerging neighborhoods (i.e. Gordon Arts District) today.

I think the biggest hurdle oftentimes in Cleveland is not necessarily the repairs needed if priced right (I understand exterior, foundation, roof and mechanicals are big expenditures), it's the margins and perceived value.  There needs to be enough margin for it to be worth a damn and most homes in the class C neighborhoods would yield slim to no margins.  There's always exceptions but to pick out those exceptions is where intimate knowledge of the area and experience living here actually helps.  You see the riff raff that congregate regularly on your sidewalk, you see the winnebego perma-parked accross the street.  You get awakened by the loud Harley exiting the driveway every morning at 4am.  The topless guy that chain smokes with a bottle of bud all day on his porch.  All these things create value and desirability. 

In class C neighborhoods, this may be a good reason why Winter may be a better season to put on the market.   Less competition, streets are covered in ice and snow, people stay inside.  

My 2 cents.