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-
Hi Salem, it would probably be easier to discuss our market and the various neighborhoods by phone or email. However, in general, the lower the price, the higher the potential return (but also the higher the risk). Cleveland, probably like most cities, can vary city by city, block by block, even street by street. When investing out of town, you should connect with someone who knows the market well.
That being said, Nelson and Avon are Cleveland proper, areas I would characterize as higher risk, but higher potential return. Blythin is actually Garfield Heights, one of the inner-ring suburbs that, in my opinion, have somewhat lower risk than many of the Cleveland neighborhoods. Prices in the suburbs are of course a little higher, but may be worth the potential reduced risk.
It sounds like our market is a lot like Illinois. I own a 3-bedroom single that rents for $600/mo, probably worth in that 30k range. I also own a 2-family that grosses just over $1k/mo, which is probably worth around 40-45k. Both of these are in Cleveland. I own 2 houses in Bedford, a suburb of Cleveland. The duplex rents for almost 1400/mo, and is worth around 60k. The single in Bedford, I still need to rehab, but it will rent around $900/mo and should be worth around 55k when I'm done with it.
Feel free to contact me directly for more info. [email protected] or 216-571-8499.
Welcome to the site. As Lee said I think you will find This Blog beneficial when looking at neighborhoods in Cleveland.
Of the three the Garfield one would be the one I would target.
Hi Salem, it would probably be easier to discuss our market and the various neighborhoods by phone or email. However, in general, the lower the price, the higher the potential return (but also the higher the risk). Cleveland, probably like most cities, can vary city by city, block by block, even street by street. When investing out of town, you should connect with someone who knows the market well.
That being said, Nelson and Avon are Cleveland proper, areas I would characterize as higher risk, but higher potential return. Blythin is actually Garfield Heights, one of the inner-ring suburbs that, in my opinion, have somewhat lower risk than many of the Cleveland neighborhoods. Prices in the suburbs are of course a little higher, but may be worth the potential reduced risk.
It sounds like our market is a lot like Illinois. I own a 3-bedroom single that rents for $600/mo, probably worth in that 30k range. I also own a 2-family that grosses just over $1k/mo, which is probably worth around 40-45k. Both of these are in Cleveland. I own 2 houses in Bedford, a suburb of Cleveland. The duplex rents for almost 1400/mo, and is worth around 60k. The single in Bedford, I still need to rehab, but it will rent around $900/mo and should be worth around 55k when I'm done with it.
Feel free to contact me directly for more info. [email protected] or 216-571-8499.
Hi Mike, I would like to thank you for the info.
When you say there is a high risk in the Nelson/Avon areas, what kind of risks are we talking about?? (i.e. lots of maintainance, burglaries, vacancies, etc...??) and are the same risks involved in the Garfield Heights house??
Thanks,
Salem.
With Nelson specifically we are talking violent crime in addition to the risks that you listed. 93rd and Harvard is not an area I would recommend investing money that I wanted a return on in.
As far as grading goes you are looking at D, graded on a curve.
Garfield hts is a world away from there on every metric. From the municipality to the housing stock to the tenant.
With Nelson specifically we are talking violent crime in addition to the risks that you listed. 93rd and Harvard is not an area I would recommend investing money that I wanted a return on in.
As far as grading goes you are looking at D, graded on a curve.
Garfield hts is a world away from there on every metric. From the municipality to the housing stock to the tenant.
Thanks Ryan.
Thanks,
Salem.
Worst case scenario homes can turn into a total loss.
Tenant rents the property, then does not pay rent and is evicted.
While vacant thieves break in and strip the entire home down to the bones. Copper pipes, H20 tank, furnace, downspouts, electrical wiring etc..
Hi Salem, I'm in agreement with all that has been said so far. However, where you invest depends on your appetite for risk. I know investors who do quite well in Cleveland. Lots of those investors prefer Section 8 (government subsidized tenants). I also think that buying multi-family homes in Cleveland helps mitigate the risk because you typically won't ever have a completely empty home. Single family homes pose a larger challenge when you have vacancies. My personal preference is the inner ring suburbs, though. But taxes and prices are higher, and not proportionately higher than Cleveland. The suburbs also have those pesky point of sale inspections (as we have discussed earlier in this thread). I also have a few explanatory videos on YouTube, just over 1 minute each, on POS inspections. Cleveland has become a hugely popular place for worldwide investors because our prices are still relatively low compared to rents....
Thanks,
Salem.
Worst case scenario homes can turn into a total loss.
Tenant rents the property, then does not pay rent and is evicted.
While vacant thieves break in and strip the entire home down to the bones. Copper pipes, H20 tank, furnace, downspouts, electrical wiring etc..
That's very helpful info James
Thanks
With Nelson specifically we are talking violent crime in addition to the risks that you listed. 93rd and Harvard is not an area I would recommend investing money that I wanted a return on in.
As far as grading goes you are looking at D, graded on a curve.
Garfield hts is a world away from there on every metric. From the municipality to the housing stock to the tenant.
Hello everyone,
I read all 7 pages of this discussion ti investigate areas and safety / war zone ext. Also of would like invest in Cleveland. What do you think and grade South Coollinwood area? on map it is not far from Harvard... Thanks
Hi Tatyana, Collinwood is pretty far from Harvard. But I would say the neighborhoods are pretty comparable. Collinwood used to be an old Italian neighborhood! We still go there to buy grapes and juice to make wine! But overall, it has become fairly rough. There are some nicer areas of Cleveland, but also some worse ones. When you talk about Harvard, if you go further, such as east of Lee Rd, that's a pretty interesting area. Again, it is all about your appetite for risk vs the return you seek! Regardless of what you do, I highly recommend you connect with a skilled real estate agent to help with your purchase!
@Mike Ferrante I've talked with realtors, and seems to me they reluctant to say any thing bad about area I asked, and I have impression that they want to sell house... Be exact ,I am looking in St.Claire Ave and E 145th St to E 149th St. Few real estate agent graded as B. Is this sound decent ?
@Mike Ferrante I've talked with realtors, and seems to me they reluctant to say any thing bad about area I asked, and I have impression that they want to sell house... Be exact ,I am looking in St.Claire Ave and E 145th St to E 149th St. Few real estate agent graded as B. Is this sound decent ?
Hi Tatyana, if those areas are B's, I wonder what C's and D's are!?! Most agents don't want to be accused of "steering" clients, so they are reluctant to give opinions. Jim Wise, who posts here regularly, has a great blog that grades areas. Or get opinions from other BP users. I can tell you that I enjoy my rentals in Bedford much more than I enjoy my 10 Cleveland units, though!
I would say the key is to assemble your team BEFORE you invest. A great manager is key; and you'll want a Realtor; and probably a contractor, unless your manager does that. Let me know if you want any referrals....
I know the east side of Cleveland fairly well so I'll chime in here.
South Collinwood and Harvard really aren't all that close to each other. North and South Collinwood are east side neighborhoods that are up north along the like and border Euclid, an inner ring suburb. Harvard sometimes refers to a neighborhood (AKA Lee - Harvard or Lee - Miles) that's on the south east part of Cleveland. It'd probably take you 25 - 30 minutes to drive from one neighborhood to the other. Harvard is also a major street that runs deep into the city and out into the suburbs.
South Collinwood can be okay, but parts of it are a little bit rougher too. North Collinwood is the Collinwood neighborhood that has more buzz about revitalization because of the Waterloo Arts District area. For either Collinwood neighborhood, you want to stay away from the suburb of East Cleveland as much as possible and you also want to make sure that you're not in an area that's more like the Forest Hills or Glenville neighborhoods that have more crime and blight and can be more challenging. Staying north of the highway and east of E 156 is preferable and its even better to be as close as possible to either Waterloo or E 185th.
My general impression of the neighborhoods around Harvard is areas in the E 150s blocks and higher are mostly stable, around the E 140s blocks is a little bit rougher but still workable, and the areas in much lowered numbers then that can be a lot more challenging.
Earlier this week I was looking at a package of properties on behalf of an out of town investor that I work with. One was on a street slightly north of Harvard near E 147th. I asked a friend and longtime resident of the south east neighborhoods of Cleveland and he described that area as "an okay area. not the best but definitely not the worst". My personal observations of the area matched his description and my general impression that I held.
Another of the properties was on E 149th in Collinwood north of St Clair. There was some mild blight, meaning a couple of vacant and boarded up properties but most properties in the area appeared to be reasonable stable and well maintained. I wouldn't disqualify either of these properties based on location and neighborhood.
A - F grades are meaningless without some sort of scale, but I can't imagine any reasonable calibrated scale would have those areas grading out as a "B" neighborhood. However, the right streets in those areas could be "C" neighborhoods. Just be careful, especially if you're not local, because there are "D" and "F" caliber streets in the immediate areas as well and there's no real good way to tell this remotely. Also, check the post by @James Wise where he grades Cleveland area neighborhoods. Just keep in mind he's looking at zip code level data with his west side eyes, and he doesn't know the east side neighborhoods down to a street by street level. Many of these areas, at a zip code level, are "D" or "F" areas but have individual pockets within them that are "C" grade areas with good potential return on investment.
Nice post @Timothy Murphy III !!!
Hi Tatyana, Collinwood is pretty far from Harvard. But I would say the neighborhoods are pretty comparable. Collinwood used to be an old Italian neighborhood! We still go there to buy grapes and juice to make wine!
Have you ever talked to the Collinwood Grape Company guy about real estate? My orthodontist says he owns something like 1000 units in Collinwood...
Hi Tatyana, Collinwood is pretty far from Harvard. But I would say the neighborhoods are pretty comparable. Collinwood used to be an old Italian neighborhood! We still go there to buy grapes and juice to make wine!
Have you ever talked to the Collinwood Grape Company guy about real estate? My orthodontist says he owns something like 1000 units in Collinwood...
Interesting, no I have not talk to them.....
Thank you @Mike Ferrante ,
that was great explanation about area. Probably that right between Harvard and South Collinwood 20-30 min drive is far. Property I am looking is in East Collinwood ,44104, close to St. Claire Great Scotts shopping centre. I don't know area at all.... but according google map and view, I have concern. Mike, if you could send me referrals that will help.
that was great explanation about area. Probably that right between Harvard and South Collinwood 20-30 min drive is far. Property I am looking is in East Collinwood ,44104, close to St. Claire Great Scotts shopping centre. I don't know area at all.... but according google map and view, I have concern. Mike, if you could send me referrals that will help.
Tatyana,
Did you ever end up buying that property?
If so how did it turn out?
everything has gone up but still - wasnt 10 years ago Cleveland was like Detroit and the city was giving away buildings - or selling them for $500. maybe a bit longer when the river caught fire.
easy money has been made but Jorge seems pretty real on the city - love the city myself except in winter. How is the tech industry doing and what else is driving the economy these days?
I've never been to Seattle, but there's something about most west coast properties that makes them the subject of a lot of land speculation. The numbers won't compare to here because all the speculators went bankrupt years ago!
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.
Four plex in the Buckey/Shaker Area... do you have any addresses or MLS numbers?
@Mike Ferrante I've talked with realtors, and seems to me they reluctant to say any thing bad about area I asked, and I have impression that they want to sell house... Be exact ,I am looking in St.Claire Ave and E 145th St to E 149th St. Few real estate agent graded as B. Is this sound decent ?
Hi Tatyana, if those areas are B's, I wonder what C's and D's are!?! Most agents don't want to be accused of "steering" clients, so they are reluctant to give opinions. Jim Wise, who posts here regularly, has a great blog that grades areas. Or get opinions from other BP users. I can tell you that I enjoy my rentals in Bedford much more than I enjoy my 10 Cleveland units, though!
I would say the key is to assemble your team BEFORE you invest. A great manager is key; and you'll want a Realtor; and probably a contractor, unless your manager does that. Let me know if you want any referrals....
Mike well said! Very good advice!
I am an agent in Cleveland and work directly with investors in very specific areas (eastern suburbs). Message me and I can definitely discuss options with you.
Are you thinking of Cleveland proper or suburbs? Have you identified a property yet or just beginning the search? Let me know how I can help - I'm a licensed agent and work with investors, primarily in turnkey.
Steven,
St.Claire Ave and E 145th St, You will throw your money away! Stay away from that area! I been in this business here in Cleveland a long time and I won't touch anything on the east side of Cleveland. I do only west side, west park & old brooklyn areas and things are great here! Couldn't ask for better.
I'm on the ground here daily and manage my own and others props also since i'm a full service contractor also.
I suggest if you invest in Cleveland, do your homework and come here first and jump in a car with an experienced person that does this here so you can see yourself.
Good luck!