Cleveland Single Family Rental Property
Realtor · Kansas City · Member since 2020 · 28 posts · 17 votes
Investment Info:
Single-family residence buy & hold investment in Cleveland.
Hi everyone, I am new here to BP and have just made my first investment purchase in the North Collinwood area, close to Waterloo. I live in Kansas City and also have one other STR property in Branson, MO.
How did you finance this deal?
Cash
@Nathan Roberts I have a condo at Western Auto Lofts that I bought as an investment 10 years ago before they were completed and back then I paid $200 a square foot. I'd lose money if I sold it today and I've been hanging onto it for over a decade. A few years ago I purchased a SFR in Waldo that I completely remodeled and flipped and it was a nightmare trying to sell. I really don't have any interest in going east of Holmes and I think the market here is overpriced for what it is. Prairie Village, West Side, Columbus Park, etc. The problem is that the pay scale isn't any higher than it is in Cleveland but the cost of living is 2-3 times higher and the rental market has not caught up with the cost of buying a home here in KC. For resale (buy and hold) families want to be on the Kansas side because of the school districts but there are bidding wars on anything under 200k from Fairway on south. If I go into the midtown area I am still putting in $150-200k for a SFR but could not get more than 12-1300 in rent. The numbers don't make sense for me.
I have a tour company in downtown KC and as a result I sit in on many of the city’s planning meetings to stay current on how and where the city is developing and maybe that’s why I don’t really want to invest here anymore. (Did I say that out loud?)
I'd for sure be interested to hear how you're doing! Maybe SFR isn't where I should be looking here. I'm a huge advocate of supporting local and doing better for the community and the city in which you live but until KC also feels the same about making it better...
If you're investing in B class and up neighborhoods in Jackson County, you will likely need to take on value-add opportunities to get great cash flow. I have investors clients that invest in C class areas such as Raytown, South KC, grandview, etc. that get $150+ in cash flow without any value-add. These are areas with higher rental occupancy than compared with owner occupancy. With that said, a fix and flip strategy can still work in these areas but they are likely to sit on the market longer. MIdtown is a great area for flipping and multi-family buy and hold. I see houses all the time with rents well over $1300 but you're going to spend over $200k+ because you're likely buying off the MLS. The MLS for the most part are meant for retail buyers; you can find some great deals on there though. Long story short, if you want buy and hold in B class up neighborhoods, try buying undervalued properties then force appreciation and drive up the rental value by doing a rehab. Currently, there is more than $500 million dollars that has been pledged by public and private entities to assist in revitalizing the Troost corridor. If you sit on many boards I'm sure you know that 4 new MAC Properties multi-family buildings will be going up on the corner of Troost and Armour Blvd. Look for appreciation and taxes to go up in that area soon after these buildings have been fully developed. There are pockets between Troost and Paseo from Armour Blvd to Emanuel Cleaver II Blvd and Volker Blvd to 63rd street that are seen as up and coming. I see investors working on properties in these areas often but when you start to see too many, it may be too late to jump in. Other areas to keep in eye on that investors have already started rehabbing houses in are Pendleton Heights, Scarritt Renaissance, and the West Bottoms (mostly multi-family).
Investment Info:
Single-family residence buy & hold investment in Cleveland.
Hi everyone, I am new here to BP and have just made my first investment purchase in the North Collinwood area, close to Waterloo. I live in Kansas City and also have one other STR property in Branson, MO.
How did you finance this deal?
Cash
1st one is always the hardest....Nice job on getting it done.
Thank you @James Wise! It has and continues to still be challenging but will hopefully be worth it!
Thank you @James Wise! It has and continues to still be challenging but will hopefully be worth it!
What have the challenges been? Tenants From Hell?
I wish! (I digress, maybe not) I purchased the home with tenants in place. They had been there 9 years and gave no indication of moving (or so I was told). I reached out to them this week to introduce myself and they informed me they were moving at the end of this month.
The house needs some updating with electrical, plumbing, taking care of wear and tear, etc and so I am flying in mid February to see if I can use this vacancy opportunity to freshen it up. It was a blow I wasn’t expecting and trying to get everything organized so that it can be completed while I am there was not a task I was anticipating. I guess the best thing for me to do is put on my big girl panties and understand this is the world I have now chosen to get into.
Kansas City is a great market for buy and hold and other real estate investing strategies. You live in KC so I'm surprised you didn't start investing here first. Why did you choose to invest OOS prior to investing in the city you reside in, which is a sought after market for investors? Maybe the numbers work best for your particular situation in North Collinwood than here.
So ahead of your visit find a local realtor that can manage property and get one with a bonded list of contractors that they use regularly. Get a good contractor to go by ahead of you with the realtor to take pictures and give you estimates. Post rent availability on cozy and get ahead of the move.
Investment Info:
Single-family residence buy & hold investment in Cleveland.
Hi everyone, I am new here to BP and have just made my first investment purchase in the North Collinwood area, close to Waterloo. I live in Kansas City and also have one other STR property in Branson, MO.
How did you finance this deal?
Cash
Welcome to the team, Rebekah. Congrats on your 1st deal. Good luck to you!!
@Nathan Roberts I have a condo at Western Auto Lofts that I bought as an investment 10 years ago before they were completed and back then I paid $200 a square foot. I'd lose money if I sold it today and I've been hanging onto it for over a decade. A few years ago I purchased a SFR in Waldo that I completely remodeled and flipped and it was a nightmare trying to sell. I really don't have any interest in going east of Holmes and I think the market here is overpriced for what it is. Prairie Village, West Side, Columbus Park, etc. The problem is that the pay scale isn't any higher than it is in Cleveland but the cost of living is 2-3 times higher and the rental market has not caught up with the cost of buying a home here in KC. For resale (buy and hold) families want to be on the Kansas side because of the school districts but there are bidding wars on anything under 200k from Fairway on south. If I go into the midtown area I am still putting in $150-200k for a SFR but could not get more than 12-1300 in rent. The numbers don't make sense for me.
I have a tour company in downtown KC and as a result I sit in on many of the city’s planning meetings to stay current on how and where the city is developing and maybe that’s why I don’t really want to invest here anymore. (Did I say that out loud?)
I'd for sure be interested to hear how you're doing! Maybe SFR isn't where I should be looking here. I'm a huge advocate of supporting local and doing better for the community and the city in which you live but until KC also feels the same about making it better...
@Nathan Roberts I have a condo at Western Auto Lofts that I bought as an investment 10 years ago before they were completed and back then I paid $200 a square foot. I'd lose money if I sold it today and I've been hanging onto it for over a decade. A few years ago I purchased a SFR in Waldo that I completely remodeled and flipped and it was a nightmare trying to sell. I really don't have any interest in going east of Holmes and I think the market here is overpriced for what it is. Prairie Village, West Side, Columbus Park, etc. The problem is that the pay scale isn't any higher than it is in Cleveland but the cost of living is 2-3 times higher and the rental market has not caught up with the cost of buying a home here in KC. For resale (buy and hold) families want to be on the Kansas side because of the school districts but there are bidding wars on anything under 200k from Fairway on south. If I go into the midtown area I am still putting in $150-200k for a SFR but could not get more than 12-1300 in rent. The numbers don't make sense for me.
I have a tour company in downtown KC and as a result I sit in on many of the city’s planning meetings to stay current on how and where the city is developing and maybe that’s why I don’t really want to invest here anymore. (Did I say that out loud?)
I'd for sure be interested to hear how you're doing! Maybe SFR isn't where I should be looking here. I'm a huge advocate of supporting local and doing better for the community and the city in which you live but until KC also feels the same about making it better...
If you're investing in B class and up neighborhoods in Jackson County, you will likely need to take on value-add opportunities to get great cash flow. I have investors clients that invest in C class areas such as Raytown, South KC, grandview, etc. that get $150+ in cash flow without any value-add. These are areas with higher rental occupancy than compared with owner occupancy. With that said, a fix and flip strategy can still work in these areas but they are likely to sit on the market longer. MIdtown is a great area for flipping and multi-family buy and hold. I see houses all the time with rents well over $1300 but you're going to spend over $200k+ because you're likely buying off the MLS. The MLS for the most part are meant for retail buyers; you can find some great deals on there though. Long story short, if you want buy and hold in B class up neighborhoods, try buying undervalued properties then force appreciation and drive up the rental value by doing a rehab. Currently, there is more than $500 million dollars that has been pledged by public and private entities to assist in revitalizing the Troost corridor. If you sit on many boards I'm sure you know that 4 new MAC Properties multi-family buildings will be going up on the corner of Troost and Armour Blvd. Look for appreciation and taxes to go up in that area soon after these buildings have been fully developed. There are pockets between Troost and Paseo from Armour Blvd to Emanuel Cleaver II Blvd and Volker Blvd to 63rd street that are seen as up and coming. I see investors working on properties in these areas often but when you start to see too many, it may be too late to jump in. Other areas to keep in eye on that investors have already started rehabbing houses in are Pendleton Heights, Scarritt Renaissance, and the West Bottoms (mostly multi-family).
Investment Info:
Single-family residence buy & hold investment in Cleveland.
Hi everyone, I am new here to BP and have just made my first investment purchase in the North Collinwood area, close to Waterloo. I live in Kansas City and also have one other STR property in Branson, MO.
How did you finance this deal?
Cash
Congratulations! Let us know how it goes. Collinwood is an interesting area these days.
@Tom Ott thank you! Hmmm..I genuinely hope “interesting” is being used in a positive way. I have used that word when trying to be polite on some of guys I have dated.
@Tom Ott thank you! Hmmm..I genuinely hope “interesting” is being used in a positive way. I have used that word when trying to be polite on some of guys I have dated.
No, it's all good! I have been hearing many good things about North Collinwood. Right near Waterloo and the Beachland Ballroom seems very interesting (in a good way) right now.
@Nathan Roberts I am constantly learning and I like your perspective! Yes, our new Mayor is doing great things by not offering tax abatements to large companies looking to build in our already developed areas and by forcing developers to begin the gentrification east of Troost is fantastic! Walt Disney opened his first studio right over there!
@Nathan Roberts I am constantly learning and I like your perspective! Yes, our new Mayor is doing great things by not offering tax abatements to large companies looking to build in our already developed areas and by forcing developers to begin the gentrification east of Troost is fantastic! Walt Disney opened his first studio right over there!
I personally don't like the word gentrification because there are many negative connotations associated with the word. Our new mayor wouldn't call it gentrification either because the world is generally meant to describe a neighborhood where their past residents were forced out due to increased taxes and/or rental values, while bringing in a more affluent class of people ie; middle class or higher. With that said, it is very difficult to bring in community assets and monetary resources without gentrifying a neighborhood. There needs to be a balance between keeping the current residents and revitalizing an area but most developers don't know how to solve this issue.
In this industry, anyone who is or wants to be successful has to continue learning. If someone doesn't continuing learning then they will eventually reach a point where they are stagnant and not reaching their goals. I didn't know that Walt Disney had a studio in that area; you learn something new everyday. I know at one time Troost was considered Millionaires Row, but that was as a time when the avenue was bustling with shops and retailers. What organizations are you involved with?
I wish! (I digress, maybe not) I purchased the home with tenants in place. They had been there 9 years and gave no indication of moving (or so I was told). I reached out to them this week to introduce myself and they informed me they were moving at the end of this month.
The house needs some updating with electrical, plumbing, taking care of wear and tear, etc and so I am flying in mid February to see if I can use this vacancy opportunity to freshen it up. It was a blow I wasn’t expecting and trying to get everything organized so that it can be completed while I am there was not a task I was anticipating. I guess the best thing for me to do is put on my big girl panties and understand this is the world I have now chosen to get into.
Tenants move in and out all the time all part of the business. Let me save you a flight though. Your tenants were there 9 years. You need to do a complete overhaul inside the unit. No question about it.