All Forum Posts by: Andrew Weiner

I have seen a significant increase in the rents on my duplexes in the suburbs.  I would avoid properties that you are basing your estimates on getting a CMHA renter, I am currently waiting for an application to get approved with CMHA and it takes forever, each vacancy becomes an ordeal.  

I would take into account the net present value of money.  I don't hear many people talking about this but it shouldn't be underrated.  I would rather cashflow out my full principal in 5-8 years and put that money to use elsewhere now as opposed to having the money in 30 years.  I do know that you can refi but that #1 costs money and #2 isn't consistent.  This is obviously a personal preference, there is no one "right answer".  

The costs of the insurance can very significantly due to a few of the following factors.

Are you getting full replacement value or just the cost to cover your investment loss?  Do you have loss of rent coverage?  What is your deducible? Do you have a standard home owners policy or is it listed as a rental property? 

These are important questions to answer and it makes a big difference to the insurance company. 

In your example the $150K duplex you have.  Full replacement value might be close to $400K (its based on square footage and zip code), if you have a total loss the insurance company will rebuild the the house.  If you only insure the property to $150K (to cover just your investment) then in the case of a total loss the insurance company hands your a check for $150K and you have a destroyed house that you have to demo and hopefully donate to the city.  You can also get a policy that includes lost rent, so if your tenant has a fire that makes the unit uninhabitable and it takes the insurance company 6 months to get it fixed then they will pay you the 6 months of lost rent. 

Also there are different policies for rental properties that cover you for liability as a landlord if someone gets hurt at the property for example. 

Lastly once you have over a certain number of rental properties (ususally 4 in my experience but I'm sure each company is different) you can get a bulk policy for all of them together that could save you money.  I have one agent that can combine personal auto, home, and up to 9 more properties and it passes the combined home/auto discount onto the rental properties but I don't know if he can offer that to out of state investors. 

Make sure to ask the insurance agents about these different points so you are comparing apples to apples and have liability coverage as a landlord. 

I think that in any city that you have to have someone with good local knowledge.  There are neighborhoods in Greater Cleveland that have had incredible appreciation and some that may have lost value.  I will start to sound like a broken record but the key is buying the right property at the right price.  There are people buying properties that are bad deals every day even in the best markets. 

Do your homework on the specific areas, check the school districts, check to see crime, call the local police or building department and ask about that specific street (they shouldn't tell you anything but sometimes they do!).  I know with COVID that travel is difficult but I think you should walk around the neighborhoods you are interested in so you can be comfortable with what your buying.  In the end you really will need some a good local contact that can help you identify the right areas and properties to meet your goals and allow you the peace of mind to invest and keep investing.

I don't know anything about the prospects in KC but I can help out with Cleveland specific info if you want.  

You can try Dollar Bank, they have lent on groups of properties in the past. Due to all the changes right now with COVID its hard to say if products available in the past will be available now. I know that the lenders I have dealt with in the past raised their rates, time to close, and max LTV. I know a few others, you can DM for their personal contact info.

@Uzi Galili Did you have an attorney get you the judgement or did you do it yourself?  I have always used the attorney who got the judgment do the collections, in many cases the attorneys do both evictions and collections.

I think you need an advisor more than a realtor. Your question is really too specific to be answered in a forum, I always fee the every property (with some exceptions) is a good deal at the right price.  To try to answer some of your general questions:

In my opinion you want to be in the right place more than maximizing dollars since you will be living in the house.  I would look for a 12-14% cash on cash return based on if you were paying rent.  The market for multi family properties in the better neighborhoods of Cleveland is tight at the moment for some reason.
As to what to do with an occupied property, I think the best option is to pick one of the tenants and don’t renew their lease.  You can so find out if one the them wants out and you can let them out of the lease.  
One last thought is that there will always be a better deal that you missed but you can’t let that stop you from pulling the trigger on a good deal or you’ll never buy a property.

I assume that your a us citizen? If so you can just go onto the Ohio Secretary of State website and create an LLC,l. You just need to confirm that your business isn't already taken which you can look up ok the same website. Hatzlacha!

I am in Cleveland and could also try to help where possible.  A general comment is to beware of the craigslist  contractor.  For every good one, there are too many that will end up costing you to make it worth the risk.

One possible solution may be for your grandmother to transfer the title to you via a quitclaim deed if she doesn't have a mortgage which is cheaper than a standard transfer.  Then you can do a cash out refi and pay your grandmother what you agreed to from the cash out.  The risk is that you could keep the property and not pay your grandmother or if the appraisal comes back low then you might not get all the cash you owe her.

If possible I would make this the lenders problem.  Some of them might be able to write non Fannie/Freddie loans in which case the rule doesn't matter however I would expect the fees/rates to be higher on that also.