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-
@Mark Siegmund I know out in Arizona the Condo market is much better and they resell quickly very easy to rent etc...
The market in the Cleveland area simply isn't like that.
Like @James Wise said the resale value is a huge issue here. They sometimes sit on the market 2-3 times longer. They also don't' necessarily rent for more then a SFR and you have the condo association fees to deal with. There is good and bad with monthly costs, but overall SFR tends to be a stronger investment long term.
Hi guys! I been absent from here for a while since I been so busy. Anyway for those of you who don't know me, i'm a local investor with 25 properties in the west side of Cleveland, I do rehabs, buy, sell and manage some for out of state investors.
Well I sell a lot of questions about the west side, i'm going to be upfront with all of you, if you think your going to buy anything on West Side worth buying right now for under 40K with tenants its going to be real hard! I just sold a 2 unit that rents are $1,200 total on west 52nd for 45k in less than a week on market! And guess what? I regret selling it because I paid 11K for it 3 years ago and only put 3k rehab in it! I sold because I wanted to buy a boat in Key West.
Anyway, the west side is rough if your used to living in great 200k + homes in nice areas, but it's by far like the east side which I would never buy anything in! Also guys, understand that a tenant is a tenant! I have tenants in my westpark area that are worse than my West side tenants! It's all how you pick them and what research you do on them, I have homes on west side that my tenants are going on 2 years with me, ok so when they leave i'll have to spend 1,500 max fixing it up! Big deal! And thats as much as I ever spent.
As far as property management, yes I do this for some selective investors that understand what this is about and that understand that we all have to make money here, i'm one of the few around here that can do it all for you at prices you will be able to make money. I had one investor call me for services recently and rehabed 2 units for him lightly so he can get them rented right away and complained about an 1,800 bill, that I will not deal with! If you want things done properly and this to work for you here in Cleveland you have to understand this here, and I will be glad to fill you all in so you don't get taken advantage of by others around here.
Last thing guys, West Side has good areas and bad, the good areas are well worth it!
Hope this was helpful to you all, hope all is well and happy holidays to all!
Jorge
I'd be happy to chime in here. I'm both an investor and licensed agent in the Cleveland area. As several other people have said, neighborhoods can vary block by block, street by street. I work with many investors, many of whom are out-of-state or overseas. It is important to have a "partner" in the area who can offer valuable opinions on neighborhoods and specific properties.
When it comes to Cleveland, I see some folks have said to avoid the East side. That's not entirely accurate. It really depends what you are looking for and your appetite for risk. There are some absolutely wonderful areas on the east side, and some less-desirable neighborhoods on the west side.
Another idea is to look just outside of Cleveland in some of the inner-ring suburbs such as Garfield Heights and Maple Heights. Price are a bit higher, but in my opinion, risk is considerably lower, depending on the exact location.
Let me know if I there is a specific home or area about which you'd like more info!
Hi Everyone, I'm new to BP and to real estate investing. I'm looking to purchase some rental property in the $40-$60k range and I'm considering Cleveland as an option. Specifically, I'm looking at the Detroit Shoreway area. Has anyone invested in this neighborhood? Are there any other areas in my price range that can get good rental income (above $1,000)? Thanks!
Duplexes for 60ish bringing in 1kish is definatly doable in that area and several others.
I prefer old brooklyn myself.
East Side. Maple heights. Garfield heights. Bedford. Shaker. Euclid. University heights. Cleveland heights
West Side. Parma. Parma heights. Brookpark. Berea. Strongsville. North Royalton. Lakewood. Brooklyn.
Are any of the east side cities you mention free is city inspections? It seems like POS violations end up costing more than the home.
@Andrea Jones I believe all of those East side cities mentioned have POS inspections. I do very little business on the East side so im not 100% positive but im pretty confident that they all do.
About 90% of our business is on the west side.
@Andrea Jones I believe all of those East side cities mentioned have POS inspections. I do very little business on the East side so im not 100% positive but im pretty confident that they all do.
About 90% of our business is on the west side.
I had a feeling, but was hoping otherwise. There is a decent MFH in Shaker for 13k. But the POS violation escrow is probably 13 million.
I see some folks talking about POS inspections and escrow. My feeling is that the POS (point of sale) inspections have helped drive the prices DOWN in these cities! Not only do you need enough cash to purchase the house, but also, enough to cover the escrow for the POS, limiting competition. If you do have enough cash, you can compete with a limited number of other investors who can satisfy this requirement. And remember, you get this cash back after you have completed the repairs!
Garfield Heights is one city that has a POS, but they have temporarily eliminated the escrow requirement to spark activity in their city, which has taken a beating with respect to home prices.
Some other cities that don't have POS: Lyndhurst, Richmond Heights, Parma, Parma Heights. And is it coincidence that the prices have remained a bit more stable in these cities? Cleveland proper does not have a POS, but the prices have dropped dramatically here, nonetheless.
I see some folks talking about POS inspections and escrow. My feeling is that the POS (point of sale) inspections have helped drive the prices DOWN in these cities! Not only do you need enough cash to purchase the house, but also, enough to cover the escrow for the POS, limiting competition. If you do have enough cash, you can compete with a limited number of other investors who can satisfy this requirement. And remember, you get this cash back after you have completed the repairs!
Garfield Heights is one city that has a POS, but they have temporarily eliminated the escrow requirement to spark activity in their city, which has taken a beating with respect to home prices.
Some other cities that don't have POS: Lyndhurst, Richmond Heights, Parma, Parma Heights. And is it coincidence that the prices have remained a bit more stable in these cities? Cleveland proper does not have a POS, but the prices have dropped dramatically here, nonetheless.
For the houses you have sold, with POS, how bad are they? Is it nit picky things like worn carpet and missing outlet covers? And what about homes with knob and tube? Which would be a large percentage of homes in the Cleveland area!
POS violations can cover anything from doors not closing properly to missing smoke detectors to roof replacement and water proofing basement walls! I'm attempting to attach a sample from a house in Euclid we sold this year.
If you do have enough cash, you can compete with a limited number of other investors who can satisfy this requirement. And remember, you get this cash back after you have completed the repairs!
Garfield Heights is one city that has a POS, but they have temporarily eliminated the escrow requirement to spark activity in their city, which has taken a beating with respect to home prices.
Some other cities that don't have POS: Lyndhurst, Richmond Heights, Parma, Parma Heights. And is it coincidence that the prices have remained a bit more stable in these cities? Cleveland proper does not have a POS, but the prices have dropped dramatically here, nonetheless.
And the rich get richer.... the escrow rule makes it nearly impossible for newbies to start investing. I hope they all learn the lesson of Garfield Heights and allow the free market to work as it should. Having the POS is one thing, demanding the money in escrow only inhibits competition IMHO.
@Mark Lenox @Andrea Jones @Mike Ferrante
As a resident of Shaker, you need to appreciate that the vast majority of the housing stock in the city is owner-occupant. Duplexes are largely limited to the Lomond area. Boulevard, Fernway, Mecer and Woodbury areas are all owner-occupant properties - and expensive one, at that. The city was specifically designed by the Van Sweringtons with this in mind.
Shaker has done a tremendous job with executing POS, distributing funds as necessary and all of the local banks understand the process. It's done to protect the architectural integrity of the city. I gripe about my taxes in Shaker, but not the POS. If my neighbor has a decrepit driveway ... I want it fixed. Period.
Some of the surrounding cities have done a poor job of implementing POS - South Euclid and Garfield are examples of that. As large investment firms swooped in, they implemented POS as a reactionary measure. POS has been in Shaker for quite some time!
Even still, POS should not be a discouraging factor. Work with your contractors. Tell them that you will pay them after the work is complete and POS funds are disbursed. A lot of the contractors working on the East Side are used to this.
Is it keeping the "newbies" out or helping the "rich get richer?" Eh, I don't know about that. These repairs are ones that would need to be done, regardless of whether the city requires you to do it or not.
As an investor ... I agree ... it sucks. I pay extra to my HML up-front when buying these homes. But alas, that's life out here.
Anyways..just my two cents.
Great info, thank you! Also, I'm glad you brought up the tip about contractors waiting to be paid, that opens up more area's to look at.
I hate the POS and I'm with @Mark Lenox These cities should allow the free market to work. At one time the POS was pretty discriminatory when cities would give out waivers to investors using connected contractors. I don't have a problem with the inspection and the requirements but to mandate that some arbitrary amount of money should be held in escrow does exactly what @Mike Ferrante said, it ends up lowering the property values. I have had many conversations with investors where if we know the POS is high we all just sit out bidding until it's been on the market 90 Days.
@Zoran M. I can appreciate what you are saying but I'm really against the POS being used against current homeowners. It shouldn't be a crime or violation not to have money to fix your driveway. Some people that live in Shaker are on limited incomes and the taxes are already sky high. But for the most part Shaker has made it work for the overall community. They tore down as many houses as they could.
I reading this thread about Cleveland. I was interested in a property in Euclid. What is your take of the city?
Hi Joe, Euclid is like many of the inner-ring Cleveland suburbs. They have a POS (point of sale inspection) and repair escrow. Euclid, in an attempt to stimulate activity in their city, actually lowered the escrow requirement to 50% of the repair amount (unless it changed again this year, which I have not heard). Homes are extremely affordable, rents have been stable. I have many investors that own properties in Euclid. The housing department has eased up on their rigid inspections--they used to be pretty tough! I have found them to be a bit more reasonable lately. I just rehabbed and rented a home last year here. The rent on the home we did is $900/mo, cost of the home was just under $50k. Let me know if you would like more specific info....!
Whether you like them or hate them, the POS inspections aren't going anywhere! And one thing @Zoran M. says is absolutely true: investors should not let the POS and escrow discourage them! As long as you have the cash to place in escrow, you get it back after the repairs are completed. And many times, the repairs and updates that investors do far exceed the POS requirements any way. The POS is only a list of code violations. Investors, especially flippers, usually do much more than is on the POS. It is true that occasionally the POS has an item or two that seems a bit heavy-handed, and sometimes you can "negotiate" with the inspector. The one item that really frustrates me is when they call for elimination of moisture in a basement--water proofing. This is typically very expensive. And 90% of the basements in our area have SOME kind of moisture. But the moral of the story is: review the POS prior to purchasing, or at least have a contingency for the review of the POS prior to finalizing your contract! I suggest having an experienced, local agent assisting you with purchases in our area.
Hello All,
I am first mortgage holder for a house on E. 111th St., Cleveland and another house on E. 4th St., Dayton. Have not started foreclosure because I did not want to take over the houses and not know what to do with them. The BPOs are very low. If anyone can help me get them renovated and rented, I can consider this option. I am also open to wholesaling them if that is even a viable option for rehabbers. Input as to my options would be greatly appreciated.
Please PM, call, or email me re: the E 111th Street property. I may be able to offer some assistance. My contact info is in my signature block.
Tim
Hi All, I've seen several people asking about specific areas in Cleveland, property managers, etc. Having lived in Cleveland most of my life, owning rentals, working as a real estate agent and flipper, I would be happy to comment via PM.
Mike Ferrante, Century 21 Homestar, 216-571-8499, [email protected]
hi , I am in California and looking to invest in Cleveland
I have looked up 3 properties SFH( Single Family House) that might be interesting
Those SFRs are located on Avon ave zip 44105 , Nelson ave zip 44105, and Blythin rd zip 44125
Those houses going for almost 30k each
Can somebody local in Cleveland advice me about those neighborhoods and investing in them??
Thank you
Salem
Welcome to BP.
Cleveland is good cash flow market.
@Salem Hassib I'm real estate broker, property manager as well as an investor in Illinois. We have $30,000 single family houses in the area that bring about $650 a month.
Hope it helps.
hi , I am in California and looking to invest in Cleveland
I have looked up 3 properties SFH( Single Family House) that might be interesting
Those SFRs are located on Avon ave zip 44105 , Nelson ave zip 44105, and Blythin rd zip 44125
Those houses going for almost 30k each
Can somebody local in Cleveland advice me about those neighborhoods and investing in them??
Thank you
Salem
@James Wise has a post about Cleveland zip codes you might find helpful: