All Forum Posts by: Andrew Weiner

You need to go to a title company and quit claim the deed to your LLC, this might not need to involve the bank since the lien stays with the property. The clear thing is that the bank is not involved in changing the name on the title, the title company just might require their permission to change the name. My standard disclaimer is that I am not a lawyer and this is not legal advice.

There are still plenty of opportunities in the Cleveland market, you just might have to look a little bit harder to find that diamond in the rough.  Nationwide inventory is down so its nothing specific to the Cleveland market.  I have clients that have purchased properties in the last 30 days and are currently under contract on others (I am not their realtor) which I think are good value deals.  I would stay away from East Cleveland just as an opening piece of advice, if you have specific goals or types of properties you like and are willing to share that then the forums might be able to give you some more specific advice.  Lastly I would recommend coming out and seeing the market, Cleveland has done a terrible job with its branding but there really is a lot going on in the overall market that a local tour could show you.  

@Brandon Sturgill I don't do any work in Opportunity Zones so I don't have an answer for you.  

The title companies will not transfer title without the go ahead from the city for POS.  Wholesale deals still go through title so it doesn’t get around the issue.  

I’ll send a few in a direct message.

Here are some pieces of advise:

Call real references for your contractor.  Some who has done multiple jobs with them.

Come to Cleveland and check on the project.  Pictures can hide ALOT! (Assuming your are OOS)

Ask for as much detail as possible.  Include actual materials. Are you getting bottom of the barrel junk or items with good warranties and quality.  The price sounds reasonable for a big rehab but that’s assuming you are getting just about everything done, both interior and exterior.  

Make sure your insurance covers the property while the project is going.  

Get a copy of the contractors insurance and make sure they are registered with the city you are buying in.  If something goes wrong the city is going to be no help if they aren’t registered.  

I would negotiate more and smaller draws so that if something doesn’t go right you aren’t out as much money.

Get an independent inspector to check on the work.  Some appraisers will do this for a few, maybe you can try to find a property inspector who would do this for a reasonable rate.  

Good luck!

Hi Leah,

I looked at the calculator and here are my initial thoughts:

Most lenders are 25% down right now not 20, but if you have a lender at 20% for an investment property then that is great.  I would ask about the closing costs, when you include everything I would expect something close to 5k - appraisal, title, insurance, initial escrow, loan fees, etc.  again this is lender/deal specific.

If I read the calculator correctly then you have $20/month for insurance.  I would guess it’s a minimum of $600/year and that’s for minimal coverage.

Property taxes also might be a bit low, you can validate that on the county site.  

Since this is a duplex you might be on the hook for water and sewer, I would put that at $150/month for budget purposes.

You might be a bit high at 10% for maintenance.  I tell my clients $50/month/unit as an average.  This extra room in the budget might help cover some capital projects long term though.

As long as the property is in good shape then I think that the price/rent ratio is good. I don't think your actual COC will be quite what the calculator says.

Good Luck!

This is going to be up mostly your preference.  You can put the tenants on a month to month lease for now which should work for them and give you the structure to the relationship that is a best practice.  After a few months of you like the tenants you can ask them to sign a one year lease or give them notice to leave.  That will also get you into the summer which is a better leasing season.   I would recommend asking for proof that the tenant is current on their rent, it’s never fun to inherit a tenant that needs to be evicted, especially if it’s in the Cleveland side of 44120.

Are you investing in a specific city?  If you are going to start a relationship with a lawyer you might want to find someone that is working in that area in case you need them for property specific matters later on.  

Welcome back to Cleveland.  Your observation is very interesting and I'm sure that some academics will write papers about this one day.  What I have seen in other metro areas is a demand for much higher end units and in neighborhoods that were significantly run down.  I think what is different in Cleveland is that there is not enough demand for the brand new construction and fully rehabbed units.  There is still strong demand for partially updated units which keeps the prices high enough that demoing existing housing stock is not profitable.  Also the school situation is one of the drivers for some of my millennial peers, as they start to have children they are moving to suburbs with better school districts.  I don't know about Chicago or what is happening there but I would assume that there are some magnet schools in Chicago public that offer a better education so people don't have to move out to the suburbs.