Insights on Cleveland?

24 Replies

I’m looking for more up-to-date information about the Cleveland market. Is anyone active in that location? 

Originally posted by @Dori Arazi :

I’m looking for more up-to-date information about the Cleveland market. Is anyone active in that location? 

 Very active around here. The Cleveland market has really been taking off. What areas are you looking at? 

That's one of the things I'm trying to sort out. I'm seeing good opportunities across the board, which is not always a great sign. I'm banking on the Biotech growth, so the neighborhoods east of Cleveland seem like a natural target. Mostly the A and B neighborhoods.  I'm not looking to flip. 

@Dori Arazi

I have had some success in Cleveland. I would recommend targeting two areas. The area surrounding the old Euclid Square Mall (new Amazon Fulfillment Center) and the old Randall Park Mall (new Amazon Fulfillment Center). If buy and hold strategy is what you are looking for, these are the areas to look at. 3,000 jobs can change things for investors. Especially a stable employer like Amazon. 

That's exactly the type of information I'm looking for. Job growth is a major determining factor for an area long term. 

Thanks @Kristopher Hanks

@Dori Arazi

100 Euclid Square Mall, Euclid, OH 44132

4641 Warrensville Center Rd, North Randall, OH 44128

@Dori Arazi I'm very active in Cleveland, and I grew up there. I flip and have rental properties all over the east & west side. There are way better areas you can target than just around where amazon is putting their facilities. Cleveland is more driven by school districts, niche neighborhoods with older eclectic homes, and proximity to commercial establishments. If you're interested in discussing I can jump on the phone this week. 

@Dori Arazi

@Jared Lichtin is correct. And since he grew up there I would take him up on his offer to get on the phone with him. I target these areas because my goal is to provide quality housing for the people that can not afford to pay $1,100 per month for rent. A lot of the jobs that Amazon will bring will probably pay around $9 to $11 per hour. Most will not be able to afford much more than $700 to $850 per month. And that is with two incomes. 

Understood. Thanks @Kristopher Hanks@Jared Lichtin  .


To risk stating the obvious. I'm looking for those, C+/B areas that are on the way to becoming B+/A. On Paper Euclid seems to be a perfect candidate. Its right on the crossroads of Biotech, Amazon and lake front. How would you rate Euclid right now?

My opinion, based on what I have learned from James Wise, Some of Euclid is C+ and some of it is B. 

That's not bad. How has your experience been with tenants treatment of the property and vacancy rates?

@Dori Arazi @Kristopher Hanks you literally can't rate an entire neighborhood as C or B in Cleveland. Everyone who invests in Cleveland understands this. Just like Cleveland Heights, Shaker Heights, and westside suburbs like Kamms Corner, Lakewood, etc. Euclid has some nice areas but some streets are terrible. Just because something is in a "B neighborhood" doesn't mean its not a "D" street. Welcome to Cleveland, lol. Just a heads up that you should be very precise about comps, streets, zip codes, school districts, etc.

To summarize and clarify what a lot are saying on this thread... It's hard to classify an entire city a certain grade - to a certain extent. The east side cities (east of I-77) can be extremely spotty. Cities like Shaker Heights have million dollar homes but also butts up to East Cleveland and that part of Shaker is a D/C- area at best. Westside suburbs tend to be more consistent. As you move towards the nicer areas, the area gets better - closer to Cleveland proper, the grade goes down. But it's consistent. Not really street by street like you have in some other areas. 

If you want to get serious about investing there I recommend just getting on a plane for a weekend because you'll never really "get" what it's all about until you're on the ground. You'll learn more in that weekend than a month worth of research! 

Thanks @Matt Motil , @Ryan Evans .

I definitely plan to fly up, though even with a weekend spent, I doubt I'll have the intuitive zone insight a local agent will have. Having lived in downtown SF (which has the same sort of micro zone issue), I cant imagine anyone getting a sublet lay-of-the-land in a matter of days. Even with a guide. 

My hope is to find an agent/agency I trust and can see eye to eye with. 

Just like what @Ryan Evans said....Fly out there. That's what I did twice last year....Caught a redeye Thursday Night...and was on the ground all day Fri/Sat/Sun one weekend in September and one weekend in October. 

Literally had a different agent each time. My on paper research SUPPLEMENTED what i saw on the ground. Bought 3 properties there since then...two duplexes and an SFR. Cleveland will give you GREAT CashFlow compared to the rest of the country. @jameswise has some great info on his website as to a High level View of A.B,C,D and F Zip Codes, but as others have pointed out...there's "D" areas in B Zip Codes AND VICE VERSA. Just like @Jared Lichtin said....He is in Southern California and he grew up there, pick his brain. 

Also...be "a little" cautious about betting on appreciation.....especially in Ohio. I was born in Columbus, Ohio and I remember when a bunch of people were betting that when Limited Holding Company was going to bring "Thousands of Quality Jobs" to the Columbus Area and "Out of State Investors"....particularly from the West Coast were pouring money in left and right on property out there....betting on appreciation....and when it didn't happen nowhere near the rate they were expecting, some of them sold those same properties.....to people that were raised in Ohio who seemed to know better........because they knew they would get steady profitable cash flow.....  

@Dori Arazi best wishes with your real estate ventures in our area!  Just a word of caution on my own behalf, the whole Amazon craze is for a warehouse facility providing low income jobs for packing/shipping, NOT the big secondary headquarters that's been in the news lately.  With regards to Euclid, many locals would not consider it a B neighborhood!  Not to say avoid like the plague, but if you were looking for A/B, Euclid and the Randall Park area may not be desired areas for that.  See the attached article to see how Euclid has changed the last 20 or so years: 

http://www.cleveland.com/architecture/index.ssf/2018/02/can_euclids_new_master_plan_re.html

@Dori Arazi one other good tool to bookmark:  school rankings!  Again, not to harp down on Euclid again, but as you can see, ranking 596th out of the 608 school districts in Ohio. 

http://www.cleveland.com/datacentral/index.ssf/2017/09/every_ohio_school_district_ran.html

Dori I would agree as well with what everyone is saying here - greater CLE is unique by street and neighborhood and your appreciation rates will be ok but you may want to focus on the cash flow.

I'm a real estate agent that specializes in working with investors and I am an investor myself.  I would be happy to have a conversation with you - no strings attached.  I have some ideas that may be beneficial to you.

Thanks @Daniel Rebol . I'm working on the assumption its a "fulfillment/pack and ship" facility. That being said, and being somewhat familiar with how Amazon operates, this facility can also disappear in the next couple of years. Hence I'm trying to assess the biotech growth more than the low wage jobs the amazon facility will likely generate. If biotech takes strong hold, it can have a more significant impact. Thanks for the Euclid advice. The more I look into it the more I see it might not be the kind of location I'm personally aiming for. 

@George Hoover , it would be a pleasure to connect. 

I have purchased 50 rental properties in Cleveland in the last year, some to keep and some to sell to investor friends as turn key properties, and have really enjoyed Cleveland as a whole.  Strong rental markets, good property management in place, quick fill to vacancies, have not had to evict anyone yet(knock on wood), etc etc. I really like working in Cleveland. My plan is to acquire 100 personal properties in CLE in the next 5 years. 

Presently I have 3 soon to be 6 apartment complexes in Lake County, 1 apartment complex and 4 single family in Euclid. Right now I have Zero vacancies and we are pushing rents higher.

The key is your team!! You need a good realtor, property manager, and associated team members you can trust.

Swanny

You hit the nail on the head with the team. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here