All Forum Posts by: Andrew Weiner

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. 

Feel free to reach out, I manage a number of properties in both cities.  

I personally budget $50/month/unit for maintenance, sometimes it high and sometimes its low but I think that for ongoing maintenance its a fair number for budget purposes.  Just to be clear it will almost never be $50/month, it will come in spurts, a small furnace repair, a leaking faucet, a backed up drain, etc and then some months with no maintenance.  Maintenance will continue on an ongoing basis, most rental properties have deferred maintenance so it might be a bit heavy right after take over and then hopefully it will level out.  

I mean having ensuite versus shared laundry.  I don’t think it’s a turn off to not have it, I think it’s a big plus that commands extra $ if you have it.  I personally like doing laundry and not having to worry about being home the minute the wash finished because some else might be waiting for the machine.  Also there are some people that are very sensitive to the idea of sharing laundry machines with strangers and are willing to pay more to avoid that.

I don’t think that dishwashers are necessary or drive demand in these types of units.  I try to actively avoid them.  Garbage disposals could be a catch 22 because then tenants might over use them and cause plumbing problems but it’s not a horrible thing to have either.  In a single family tenants can bring/buy/rent their own machines, in multi family it’s a big deal to have a laundry machine in the unit.  Just keep in mind that if you pay the water and sewer that having the machine in the unit will increase that bill every month.

Maybe use the machines as an incentive, put them in and say there is a fee but that you’ll waive it if they renew for a 2 year term?  People always like to feel like they are getting something extra.  I know some company’s offer carpet cleaning or painting one room as a renewal perk after a few years.

I manage a number of rental in Shaker Heights and my clients do very well with them.  The rents are fairly high in the city and the school district is strong.  There is POS which is another item to deal with but it also helps keep up the value of the neighborhood.  I think that a lot of local investors own in Shaker.  The areas are generally nicer the farther east you get in the city, west of Lee road is less desirable.  The Lee-Harvard area of Cleveland is nearby and while its not Shaker I think that it is another good area to be in.

Please don’t buy a 20k property, or should I say money pit.  Lots of opportunities and there are great areas to invest.  Look more at a suburbs, I’m an east sider so I like all of the heights... Cleveland Heights, Shaker heights, Maple heights , Garfield Heights , or Bedford... Heights.  Check out what rental properties are selling for and also market rental rates.

CF is cash flow, COC is cash on cash.

Cashflow is the net dollars out of the property after fee's and expenses. Cash on Cash is how many dollars you are returning after fees and expenses divided by your total out of pocket cost for the property. COC does not take into account paying down a mortgage, write offs, depreciation, etc. so your total return can be higher than the Cash on Cash.

Sent