All Forum Posts by: Andrew Weiner

@Len Miller Although I think this deserves its own page (and maybe it exists somewhere on BP) I would point out a few things that you should look at when evaluating management companies.

Do the principals invest in rentals as well as manage?  The reason why is because rental owners have a different way of looking at properties than other real estate professionals like residential brokers or home flippers.  Taking care of a property for long term physical stability while trying to maximize cash flow is a bit of an art, people that have been doing it for a while for themselves are more motivated to get it right.

Are they able to advise you on your personal investment goals?  Before I bought my first investment property I talked to a bunch of local investors, some of them gave me some generic albeit helpful info and then there were others who really helped educate me and gave me the confidence to do the deal.  Some of the management companies can serve as a real estate advisor for the acquisition (even if they aren't selling it) in addition to managing the property after you buy it.

Ask for references!  I am a huge fan of references, people always ask them but so often they don't call them and check up.  They might need to make sure you are serious first (they don't want to burden their clients with every potential customer) but they should be willing to give you a reference for an investor in a similar position to yours and have been able to provide top tier service.

(Disclaimer this doesn't apply right now with all the public health concerns) Have a sit down meeting with the operations people, not a sales person.  It's worth coming in and talking to the people that run the day to day operation, I hate dealing with sales people because they might be great, organized, punctual, etc. but then they leave you with an operations team that is lacking.  I know this isn't possible right now but if it does become realistic I would strongly encourage you to come into town and meet with a few managers and have them take you on an area tour of potential investment neighborhoods.

Don't get too caught up in the fees.  You need to ask about fees, maintenance, approvals, etc. but my experience has taught me that you get what you pay for.  All of the people in the management business have similar costs and profit goals, if they give you a lower percentage then they are probably making it up somewhere else.  Having a property manager that keeps a tenant longer with great service is worth well more than 1-2% monthly.  

I am a native Clevelander so feel free to DM me if you want any more info on the Cleveland market. 

Andrew

@Frank Agyeman-Duah I tend to agree with @Ron Szmik on upgrading for a first property.  There are a lot of potential perils when investing and D neighborhoods tend to throw you curve balls.  I would advise that you talk to someone who has investing and management experience in the immediate area who can help you hone in on your specific goals and create a profile of what your ideal investments should be.  I'm in Cleveland and there are a lot of people in the area that would be happy to help you with this and can advise on neighborhoods to look at and even help you evaluate specific deals.

Good luck on your hunt!

Andrew

@James G.

I buy and hold in the eastern suburbs of Cleveland and have been very happy so far with duplexes.  I have had some appreciation however I am in it for the cash flow.  My experience has been that screening is the biggest factor in minimizing my expenses (turn, vacancy, damage, maintenance).  You can set some additional criteria for your applicants that will help identify tenants who are most likely to be successful long term renters.  I will caution you that if you aren't very well versed with tenant/landlord law that you should review your criteria with someone who is or an attorney to make sure that you do not inadvertently violate fair housing laws.  If you want to reach out I'd be happy to discuss some of my thoughts on screening.

Lately I have been looking and I haven't found any SFHs that generate enough cash flow for me to put in offers, I think that SFH sellers are looking for retail buyers and Duplex owners are more realistic in pricing units knowing that the next buyer has to make money. Your best chance for SFHs will probably be after the freeze on foreclosures in Cuyahoga county is lifted.

One last thought is that the additional cashflow on the Duplexes will be good for recapitalizing once you have a few properties.  There are lenders around that will lend based on rents and cashflow on a group of properties together as opposed to a pure residential appraisal for individual properties.  The rates and fees are higher on those loans but they don't have caps on number of mortgages or cap you based on w2 income to debt ratio, its just the cost of growing beyond your first 2-3 houses. 

I wish you the best of luck and as a local Clevelander would be happy to help you in any way I can.

Andrew

I would try USA property management in beachwood 

Are you looking for a specific area of Cleveland?  Especially since you plan on moving into the property the location is even more important.  I would look for an agent who is also an investor, I have found that many agents don't fully appreciate how to evaluate an investment property unless they are investors themselves.  I have a lot of contacts in the east side suburbs of Cleveland, if you want to reach out I could put you in touch with them.  

There are private lenders that will take rental income into account.  They sometimes charge higher fees or interest rates but it’s the cost of being able to scale.  Also as you grow your portfolio there are lenders that will lend on a portfolio, so for example you can buy ten properties and take out one loan on that group.  Again these have disadvantages but it helps investors recapitalize and continue growing.

Hey @Prakash Saraf, locally here in Cleveland most of the flips that I see are from foreclosure sales that happens in person only. You can check for online auctions or at the fanny, Freddie, and HUD websites. The best ones do tend to go fast though so be ready to make offers.

My searching has shown that Cleveland is a tough spot to get a flip property at this exact moment, although I expect that to change once the foreclosure auction opens back up.  The rental market is very strong right now and you might want to consider a rehab, rent, and refinance in Cleveland.  You won't necessarily have the big pay day but you can build some cash flow while identifying key vendors that you can use in the future.  If you are not local I would recommend going through the area with someone who has personally flipped a few houses, neighborhoods can vary vastly from block to block and its worth having a an experienced local investor walk you through some of your top areas.  I personally run most of my properties by a couple friends in the business to make sure that I am not missing something specific to the area or property type. 

I agree with @Jacob Repreza.  I generally like to bring in my own tenants because I run a tight ship and many landlords are more flexible on things like payment terms, pets, annual rent raises, etc.  I have found myself honoring rent payment agreements that end up taking up more of my time than starting with a new renter (possibly at a higher rent) and with all of the rules stated and upheld from the start.  If you cannot raise the rent much then it’s almost always worth it to keep a tenant.  When looking at the units try to do a simple calculation on what it will cost to do the turn and how much you can raise the rent, if you can make the money back in a few years then it’s worth it.

Good luck!

Hi Keyla,  I would recommend reaching out to USA Property Management in Beachwood.  They have a separate division that flips or sells value add properties.  They can possibly help you out with identifying specific areas and would be able to do some or all of the rehab, rental, and management.  I own a few duplexes in South Euclid and like that area, if you want any information on a specific area feel free to reach out.  It's worth getting a local opinion as neighborhoods and values can vary greatly even within the same zip code.

Andrew