All Forum Posts by: Andrew Weiner

I invest in and manage properties in Cleveland and we have seen fair growth of rents, property values, reasonable entry price points, and a very robust renter market.  The City of Cleveland has some areas to avoid and some that are have great returns but in the suburbs there is a good combination of cash on cash return and stability.  I am more of a fan of cashflow, I'd rather have my money in hand today and use it to go buy more properties or just to have on hand.  Depending on what your personal goals are you should be able to find one or several properties that will help you meet them.  I would make sure to write down what you are hoping to achieve, some examples would be longer term wealth, replacement of income, supplement income, better returns than cash sitting in the bank, retire early, etc.

One thing to add is applications.  I find that keeping applications are VERY important and help if you ever need to collect money or file for evictions.  

You can buy several properties and refi in a non recourse commercial loan so that you can continue to scale.  If you just want to get better returns than the bank then buy and hold with cash and get your returns with very little risk to your principal.  You do need to also keep some reserves or a line of credit so that you can cover any larger repairs that come up.  

On the other hand your COC return should be better when you use low interest financing and if you have more properties then you have better diversification. Unless you have unlimited funds you will be more limited in your growth, if that is your goal.

I would think about maintaining Cleveland while standing up a new team in your new market.  If the distance management is too much then you can let go of Cleveland and focus on your new market that you have already started rebuilding in.  If the remote management turns out to be easy then you now have market diversification which is fantastic.  I do know a few people that have maintained remote businesses successfully, they fly in a few times a year which is not a big deal for them.  The biggest factor is personality, if you are okay with out being on site and watching from a computer screen then you might do very well with this, some people need to be on site and have the in person interaction for their mental health.  Good luck and I hope the move is successful!

I have a lender for cash out after rehab for a portfolio.  I do have a local hard money lender for acquisition and rehab under 100K.  I can DM you the contacts if you want. 

You need to talk to an FHA lender to see what your options are. Its not always so easy to get the appraisal where you think it should be to refi out of your current property. Also the two events don't have to be concurent, I would refi out of your current loan and make sure you can get that done before you start shopping for your next property. As for your income from your current property counting towards your income that is a common problem. Most lenders can only look at w-2 income and have trouble taking property income into account. Depending on how your house is set up and how you pay yourself they may not recognize that income. This is a big reason why people pay more and have private loans, its the only way to scale.

I can't agree with @Benjamin Seibert more, define your goals in writing.  It's hard to hit the target when you don't know what it looks like.  If you can't find something that fits your goals you may need outside help or your goals may not be realistic and you need to update them.  

What are your goals and tolerances, do you want B class, C class.  Maximize cashflow or buy in a gentrifying area to get some appreciation?  I would recommend Shaker Heights, Cleveland Heights, Euclid, Kamms Corners, Parma, Garfield Heights and maybe some select parts of Cleveland depending on what you are looking for.  Good luck on the search!  Avoid East Cleveland, Slavic Village, and Woodland/Buckeye.  If the price is too good to be true then you probably don't want to own there long term.  

@Tyler D. I like the way that you are approaching your investment strategy and building long term wealth and income.  That being said you need to budget in major capital projects like roofs, driveways, HVAC, appliances, etc. and make sure that you keep some cash reserves for that because its its expensive to access the capital in the house to pay for some of those expenses. 

Also you don't have to stay locked into the same houses for 50 years.  That would obviously be ideal but make sure that you are keeping tabs on the neighborhoods and that you don't hang onto a property in an area that might go down hill.  Today's lower end areas were very nice 50 years ago and today's best areas might have been farms then.  You can also jump markets, who know what cities might be hot in 20 years, we could all be investing in Idaho then (sorry to whoever I offended from Idaho, I'm sure that there are great properties and returns there but someplace had to fill that spot in my example).

As I tend to repeat myself on the forums I'll say this again here.  Focus more on simplifying your life, if you have system in place in one market then it might be easier to grow there.  Also keep in mind that the deal is more important than the location, you can buy a terrible deal in a great market and vice versa.

One last thought on appreciation versus cash flow would be to think about net present value.  There are some calculators and I hardly see anyone talking about it but as an active investor you should take that into account.