Cleveland OH investing?
Seattle, WA · Member since 2013 · 70 posts · 33 votes
I'd like to hear from anyone investing or invested in the Cleveland rental market. I'm looking into purchasing a duplex or two in the Cleveland area for long term rentals.
I came to Cleveland from Key West, Fl. I met my wife here and didn't even know where to begin in terms of work until I saw a month later after being here that I can buy a duplex for 8k to 30k in a high rental area, in Fl you won't buy anything decent for under 200k, so here I am now and I actually put together a really nice portfolio in less than 2 years being here!
For you guys out there wanting advice for Cleveland props, I learned this market from a very successful woman that got very wealthy here doing this!
Rule number 1. Don't make the mistake of buying ANYTHING on the east side! I almost made the mistake but listened and saw it all go down, they will destroy everything, steal your water tanks, furnaces, fixtures or anything that they can get a dollar for!
I decided to invest in the areas in the west side which is just a tad more money (8k to 35k) and this area includes west park, west side, old brooklyn. I was a contractor in Fl for a long time so I rehab my own with a couple 12.00 hour guys as helpers so my rehab costs are lower than most since I do alot myself. I buy mostly duplexes and im renting 2 bedroom units from 585.00 month to 600.00 per month. 3 bedrooms from 600.00 to 675.00, expect to pay 125.00 average per month in water & sewer since owner pays that in multi-unit props. Now here is what nobody like to hear, Cleveland tenants are somewhat unstable and like to move alot, they also mostly all like to have pit bulls as pets, they will come to look an apt and give you a deposit and then a week later after you took apt off the market, they call you and want deposit back, so you just lost time & money! Also the local help is garbage so repairs can be expensive by qualified people. Also they love to pay late ( they live paycheck to paycheck ) and some are dirty and bring bedbugs in to your house and it costs us money to correct issue.
Well there is good and bad in every business but i'm happy with this here, I actually ended up with 25 of these duplexes and making good money overall! I'm selling a couple of my properties now to buy something in Avon Lake as new personal home, so if any of you guys out there interested in some nice turnkey props, let me know and I can even manage for you if you buy it. For those of you looking for a property manager, I offer this service for only west side investors and my rate is 15% of gross rents, i'm a bit higher than others but my experience speaks for itself, my company does it all from rehabing to placing tenants, we do it all in house so we don't call roto-rooter to snake your drains, we do it at a rate where you making money and so are we.
Good luck guys! Any info needed? I'll be happy to entertain
J-
Will,
Our investment group holds rentals on the east side. This is a very strong rental market, but it definitely requires a ton of market research. There are strong neighborhoods and ghettos, and in some more questionable areas it can go street-by-street. For example, one of our duplexes is on a very nice street, but the street to the south has at least 5 board-ups and is in terrible condition. (We bought it to speculate on neighborhood gentrification.)
It's a great time to buy in Cleveland right now--the business climate has turned around 100% and there's about $4bn in construction activity going on downtown right now. Some inner-city neighborhoods have seen 400%+ price appreciation in the last ten years. Again, though, some neighborhoods are much better than others, and I would definitely plan to check out prospective properties in person.
I have a unique situation. A local investor (Seattle) and I got together talking about rentals. He wants to free up some capital and offered up a duplex for $45k; its currently occupied in each side for $500 each. I cant touch anything in my area that's multi-family for under $300k
Its managed by a local Cleveland company and sounds like a great deal, as I'm looking for a long term 15-20 yr. investment. I'm not concerned with a quick money maker. The property is located in the Coit neighborhood and from Google maps satellite view, I'd call it a decent neighborhood (no board-ups, derelict cars or businesses).
This would be a cash buy for me, so the loan side wouldn't be a problem. I'm just looking for others who are in the same area and similar experiences.
To be honest, those numbers are way too low for me to buy in that neighborhood. I suppose Google street view could make one less sensitive to neighborhood conditions, but I think any local would probably consider anything around Coit Road to be deep ghetto.
How is a duplex for $45k and $1k monthly rent too low. In my area (Seattle) to get $1k rent, you're in for $100k plus. This is a good deal all day long.
What I wont disagree with is this being the "ghetto". I don't know this area at all and thanks for the neighborhood analysis.
Now, what experience has everyone had with rentals in "ghetto" neighborhoods that have good income potential? Is it worth the risk? What is the risk of rentals in "Ghetto" areas? With a good property management company and screening, I would assume getting rent shouldn't be a problem.
I'm very new at this, so let me hear some opinions.
I have 3 rental properties in the 2nd teir suburbs of Cleveland west side, namely North Olmsted, Fairview Park and Berea. These areas are easy to rent, but right now finding deasl is harder. This area has turned hot lately. Most SF homes are running from $80 to $150K and rents are $1000 to $1400 a month.
Good luck.
The problem with operating in the ghetto is that your house can get vandalized and stripped with less than a week's worth of vacancy. If your property manager is not vigilant (and I almost guarantee he won't be unless you have found someone that I haven't!) then a lot of damage can happen after a tenant moves out without notice. Sometimes tenants like to take appliances and fixtures with them, and I've even seen them take aluminum windows. This is a little bit too much risk for me.
As for the numbers, they are good so long as you don't have to deal with the above. I've been buying with numbers better than those in far better neighborhoods. (Most recent purchase was $38k with $1200 gross) If you are less sensitive about these risks, there are fourplexes in Buckeye-Shaker that will deliver a 25% cap rate.
Good luck.
I see you're from NEO, so you probably know that North Olmsted is a different world away from East Cleve/Glenville!
Will Spruill You're about to step into a deadly trap. Looking at a far away area with your local eyes. What's a good deal in Seattle is irrelevant for what's a good deal in Cleveland. You're exactly the sort of investor that some seller's target. You don't look at the deal based on what's a good deal where you're buying. Instead, you compare it to deals where you're from and think "wow, great deal". In reality, it may be an awful deal for the area. A local person, Christian Carson is telling you this is not a good deal. He's in the area and knowns the area. Yet, you persist in comparing it to Seattle. I suspect this investor may be hoping you'll do exactly that so he can "free up some cash". That is, "dump his problem property on a 'greater fool'". From what you've said, this investor may be in the business of dumping bad properties on investors in your area who don't know better and don't bother looking deeply enough.
Have you been to this area? You mention Google maps and that's all well and good. But before you hand over the money, you must get on a plane and have a look at the property, the neighborhood and the entire area. Ideally, meet some people on the ground.
Christian, when you talk about the east side, are you talking about the "heights" areas or further east? Thanks
Hi Will Spruill, I live in Cleveland, and I can tell you about the area you are speaking of. Cleveland, is a great area to invest in. Kelly McE and Christian Carson are giving you great advice, and know the market well.
Sorry it took so long to get back to you Frank Francone. I generally stick to the Heights eastward toward I-271, but I also really like the growing artist colony in North Collinwood, although it's adjacent to some war zones.
I have couple of properties in the Old Brooklyn neighborhood.
Any of the Cleveland experts on this forum have any views about this neighborhood? Rents have been iffy but that may be due to poor property management. Any suggestions for a good property management company?
Old Brooklyn can be nice in some areas. I know some locals from there. It's Drew Carey's hood too.
As for property management, I wish I had an answer to that question myself. You might try http://www.clevelandpropertymanagement.com but I have no experience with them myself.
It's a huge problem finding qualified tenants in the fringe areas, and it could be a benefit to use a large PM company that has a list of prequalified tenants to push into your units.
Hi Christian
I am looking into investing in Cleveland, and I would like to avoid the high crime areas. Could you tell me what high-crime areas to avoid in Cleveland?
Thanks in advance!
As for property management, I wish I had an answer to that question myself. You might try http://www.clevelandpropertymanagement.com but I have no experience with them myself.
It's a huge problem finding qualified tenants in the fringe areas, and it could be a benefit to use a large PM company that has a list of prequalified tenants to push into your units.
Hi Christian
I can relate. One of my first out of state rentals was in a rough neighborhood that was vandalized and stripped within days of being vacant. Any chance of making good with the long term cash flow of the property went right out the window with all of the costly repairs including the replacement of an AC unit twice! Like you, I am careful about buying properties where the crime element is high.
The problem with operating in the ghetto is that your house can get vandalized and stripped with less than a week's worth of vacancy. If your property manager is not vigilant (and I almost guarantee he won't be unless you have found someone that I haven't!) then a lot of damage can happen after a tenant moves out without notice. Sometimes tenants like to take appliances and fixtures with them, and I've even seen them take aluminum windows. This is a little bit too much risk for me.
As for the numbers, they are good so long as you don't have to deal with the above. I've been buying with numbers better than those in far better neighborhoods. (Most recent purchase was $38k with $1200 gross) If you are less sensitive about these risks, there are fourplexes in Buckeye-Shaker that will deliver a 25% cap rate.
I am looking into investing in Cleveland, and I would like to avoid the high crime areas. Could you tell me what high-crime areas to avoid in Cleveland?
Thanks in advance!
The inner-ring suburbs are some of the safest cities in the country, with a few exceptions. East Cleveland is one of those--avoid with a ten foot pole. That's our little Detroit, (no offense Detroiters, just trying to draw a distinction between your place and ours!) they're too poor to keep the streetlights on or report any crime statistics to the FBI. Someday soon, Cleveland will annex them and clean the place up.
If you're looking for some quick advice about crime and safety, it's best to avoid investing within Cleveland city proper unless you know what you're doing. There are large neighborhoods on the west side that are perfectly stable and safe, and one area on the east side is the fastest growing job center in Ohio. The trouble is that neighborhoods can turn pretty shady if you head a few streets in the wrong direction.
Cleveland is a city which is merely a small part of the region, which is why people get confused about the state of crime and safety in Northeast Ohio. Only 31% of the county population lives within city limits (generally, the poorest on public assistance with a small population of wealthy urban professionals). The rest of us live a few miles across the border in the suburbs. It can still be a 5-15 minute commute to downtown from these places. The city proper contains all the crime in the neighborhoods nobody with a job has any business going to. The suburbs, by contrast, are typically counted among the best places to live in America, and for all intents and purposes they're a de facto part of the city.
Take a look at South Euclid, Euclid, Cleveland Heights and Shaker Heights. It's harder to do business with these cities when you buy a distressed property that needs repairs, but once you get moving you'll own property in neighborhoods that are in demand. Lakewood is also a great rental area (and also one of the best places to live in America) but the price-to-rent ratio is significantly lower than the east side properties.
I came to Cleveland from Key West, Fl. I met my wife here and didn't even know where to begin in terms of work until I saw a month later after being here that I can buy a duplex for 8k to 30k in a high rental area, in Fl you won't buy anything decent for under 200k, so here I am now and I actually put together a really nice portfolio in less than 2 years being here!
For you guys out there wanting advice for Cleveland props, I learned this market from a very successful woman that got very wealthy here doing this!
Rule number 1. Don't make the mistake of buying ANYTHING on the east side! I almost made the mistake but listened and saw it all go down, they will destroy everything, steal your water tanks, furnaces, fixtures or anything that they can get a dollar for!
I decided to invest in the areas in the west side which is just a tad more money (8k to 35k) and this area includes west park, west side, old brooklyn. I was a contractor in Fl for a long time so I rehab my own with a couple 12.00 hour guys as helpers so my rehab costs are lower than most since I do alot myself. I buy mostly duplexes and im renting 2 bedroom units from 585.00 month to 600.00 per month. 3 bedrooms from 600.00 to 675.00, expect to pay 125.00 average per month in water & sewer since owner pays that in multi-unit props. Now here is what nobody like to hear, Cleveland tenants are somewhat unstable and like to move alot, they also mostly all like to have pit bulls as pets, they will come to look an apt and give you a deposit and then a week later after you took apt off the market, they call you and want deposit back, so you just lost time & money! Also the local help is garbage so repairs can be expensive by qualified people. Also they love to pay late ( they live paycheck to paycheck ) and some are dirty and bring bedbugs in to your house and it costs us money to correct issue.
Well there is good and bad in every business but i'm happy with this here, I actually ended up with 25 of these duplexes and making good money overall! I'm selling a couple of my properties now to buy something in Avon Lake as new personal home, so if any of you guys out there interested in some nice turnkey props, let me know and I can even manage for you if you buy it. For those of you looking for a property manager, I offer this service for only west side investors and my rate is 15% of gross rents, i'm a bit higher than others but my experience speaks for itself, my company does it all from rehabing to placing tenants, we do it all in house so we don't call roto-rooter to snake your drains, we do it at a rate where you making money and so are we.
Good luck guys! Any info needed? I'll be happy to entertain
J-
@Jorge Garcia Welcome to Bigger Pockets. I'm out in Colorado, but I'm starting to do a bit of research on Cleveland. Everyone says to avoid the Eastside. Does this mean East Cleveland? Are there more areas that people are referring to?
I have a short list of Euclid, Bedford, Shaker Heights and Lakewood that I've picked up in my research as possibilites. Do you have any insight into these areas?
What are you considering selling? What area? What price?
Mike
Folks - This thread is great for discussing different areas of Cleveland, but please refrain from posting ads or solicitations here. The place to do that is in our Marketplace. Thanks.
@Micheal W.
Thanks for the welcome mike! To answer your questions, the Euclid area isn't too bad but out there it goes street to street, Shaker is a pretty nice area but taxes out there are high by Cleveland area standards but overall is a good area, Lakewood I actually own a home myself which was our personal home but it became to small for us, Lakewood is a very good area but as for rentals I don't know if your numbers will add up due to Lakewood taxes are some of the highest around Ohio, also tenants for Lakewood area are skeptical due to if you live in Lakewood there is a RITA tax on what a persons income is, for instance my wife works for MOEN Corp. and every 90 days we paid an extra $340.00 on the RITA tax! It goes by income, so your tenants are shooing away from this because if you don't pay them they will actually garnish your paychecks, but as a place to live its beautiful!
To me the area of west park in Cleveland, and the West side, Ohio City, Tremont, Old Brooklyn, are where you want to put your money, your getting about the same rents with a far lower investment, And the areas are very decent! I want to point out that I have seen prices rise a tad in the past few months.
The Ohio City and Tremont area you want to really go after, they are trendy areas where the rental market is excellent! I have a couple homes in area that I'm selling to free up some capitol, there is all kinds of great things going on! Lots of nice shops, restaurants, cafe's, and new construction!
The ones im selling are 2 props in Ohio City, they are both duplexes and one I have listed and other I don't. 6010 Wakefield is rented at 600.00 down, 625.00 up, taxes are $101.00 per month, water & sewer is around $80.00 per month, Tenants are excellent! This home just underwent a full rehab last year with all new siding, roof, electrical, plumbing, you name it! This house is listed at 49K
The other one is at 1949 west 52nd, All new rehab a year ago! Around the corner from Wakefield prop. this one is generating 625.00 up, 650.00 down, taxes are 88.00 per month, 125.00 per month on water & sewer. Tenants are also great! 44K on this one.
I have a cash-cow also at 3141 Fulton rd, this house is a 3 unit, $1,875 in rents monthly! This is a luxury property that I live in myself right now, this one is also a full rehab and attracts high end renters from downtown, has an 8 ft wrought iron gate around it, new everything! Has granite bath, kitchen, it's a beauty! Heated 2 car garage! This on i'll sell for 75k firm!
I also have one on west side, 7211 Dearborn Ave, 585.00 up, 585, down, all new rehab also last year, will sell for 37K
If you want to see some pics, shoot me an email at [email protected]
I hope my info works for you, have a great day Mike!
Jorge, it's good to hear from another hands-on investor in the area. I'm a lifelong east-sider, and as anyone who has spent any appreciable amount of time in this city can figure out, you never cross the Cuyahoga River! My west-side knowledge is fairly handicapped. I agree with what you said about the east side of the city proper being a dicey place to invest (if you want to know the historical reasons why people have this attitude, do a little reading about the Hough riots in 1966). It's hit or miss, but I do love North Collinwood as a stable and safe neighborhood. I focus on the eastern suburbs mostly and I steer newbies toward them because of their plentiful supply of good tenants and job centers.
A word about the income tax--almost everywhere in Cuyahoga County has a 1%-2% tax. You're first taxed by the city where you work, and then the city where you live, and there are credits that partially prevent double taxation. This means that if you move to an area with no income tax, but you work anywhere in Cuyahoga, you'll still pay the income tax. There are some places where you really get screwed (like where I live in Cleveland Heights, as they only give a 0.50% credit) but most places credit you back the tax you pay if you work elsewhere (like the City of Cleveland).
@ Joshua Dorkin, I'm sorry I'm new to this here guys, will do! :)
Hi Christian, Yes I do know of a couple investors who work that area and there is some pockets out there that are good, i'm just not very familiar with it since I live out this way, but yes guys if Christian would have some good info for out there since there is a good job force out there and in rentals we need the good working ones ;)
Any info you need out here in West side I can help! Out here guys, I would strongly suggest you look into tremont and Ohio City area, they have been very good to me and there are still some deals!
What are houses going for on 110th Street? I like to talk investors that are hands on in areas that I don't live in. I am going to call the person that has it listed and get more information on it. Seems like a good fixer upper. Small two bedroom one bath house.