All Forum Posts by: Gladimir Lobo

Imagine this: You've got a property in Cleveland, found what seems to be the perfect tenant—a self-proclaimed handyman. You do a background check, and everything checks out, so you collect the first month's rent and security deposit. The tenant moves in without a hitch, but you miss out on a move-in inspection because, well, you're remote, you trusted the pictures you got from your remote photographer.

After a week, your handy tenant rings you up, saying, "Hey, this needs fixing and that needs fixing too. I can handle it all, just deduct the costs from my deposit." You think, "Sure, why not?" After the deduction you now have less than $200 as deposit. Four months later, you're still waiting for a single cent from your dream tenant. Calls go unanswered, no rent and you realize you're stuck managing a property with increasing water and sewer charges and a tenant who has vanished into thin air, leaving you holding the bag. Remotely managing properties is a fool's errand. Built property management cost in your proforma/deal evaluation or stay home.

In the wild world of real life and the Internet (where everything is true, right?), the government doesn't guarantee 100% of Section 8 rent. You reading that? “She is also in arrears $2000 of her portion of rent.”

Congrats. You're from Cleveland, getting to know Cleveland is half the battle.

You want to build your network?

Who’s the most important person an investor needs on their team if they don’t want to make lots of mistakes and waste money?

-Investor- friendly realtor (IFR)

-Contractor

-Lender

-Property Manager

-Seasoned Investor (local)

Asking for an OOS friend.

BRRRR all-day every day in Cleveland. Kevin from Jersey is on his second property faster than you can say "Garden State."

Evaluating a deal is the biggest challenge for most investors, especially OOS. We plucked a value-add property right off the MLS that so called "investor-friendly realtor" (IFR) passed up. Most IFR will have you feeling dizzy, confused, and slightly nauseous. But not us!

You must balance purchase price, ARV, with renovation costs and still come out on the other side without losing your shirt. Most investors struggle with that, but we were able to put them on the right track. We got him a scope of work outlining exactly what he needed to improve, what kind of materials to use, and hooked him up with all the pros to getting the job done. Kevin is wrapping up his first project and already has his second property under contract. And yes, we got him that one off the MLS too. Knowing how to evaluate deals eliminates shortages.

He's so impressed, He has referred his cousin to work with us.

And that, my friends, is how you turn real estate into a family affair!

Congratulations, you made it out alive! Cleveland is notorious for eating newbie/OOS investors alive.

Realtors often say that buyers are liars. It’s hilarious to hear one calling a realtor a liar. I mean, the irony is delicious. But let's not point fingers just yet. Maybe this realtor was one of those "investor-friendly" types with a grand total of zero experience fresh out of Hondros. It’s like trusting a chef who’s never cooked a day in their life – recipe for disaster!

So, did they mislead you because they were shady, or because they didn't have a clue? Hard to say. But hey, it’s worth considering. After all, navigating the real estate jungle requires more than just a friendly smile and a catchy sales pitch. You need someone who knows the ropes, someone who’s been through the wringer and came out with a few scars to prove it.

Since we are discussing Section 8 where the RENT is magically paid in full and not character, I’m going to stay on topic!

Now, if you're an investor looking to buy Section 8 properties, and you don't ask the all-important question: "What's the rent portion that Section 8 covers versus what the tenant pays? /Asking for a copy of HAP contract and the most recent Rent Change Notification?" Well, my friend, that's like ordering a pizza and not asking what toppings are on it. Investors just want to know how much Section 8 is footing the bill. (It's all about the Benjamins, baby)

Josh, this is an understatement. They started by looking for peeling paint on siding, wood trims, porches... With the recent updates (Lead Visual Assessment Form as required by OH. Adm. Code Chapt. 3701-32-07(G)(3), Cleveland has transformed this lead inspection into a pseudo general property inspection. Now they're also checking to see if you have handrails in stairways, water stains on the wall, the state of landscaping around the property and whether all the shingles are attached to the roof, the condition of the gutters. It's beyond lead-based paint. Because, clearly, tuckpointing your chimney is a major lead hazard, right?

All the rent (100%) is paid by the government (our tax $$)?? Is it really?? For over 20 years, we've been dealing with Section 8, it's a rollercoaster. You might get the rare tenant whose rent is 100% covered by Section 8. But they don’t pop the champagne just yet, every year Section 8 conducts a rent reevaluation, and whenever the tenant's income changes, they do another reevaluation. Talk about keeping you on your toes!

Last year one of our Section 8 resident was paying about 20% of the rent. This year, they're paying about 50%. It's like playing rent roulette in these streets!

So, to say Section 8 pays 100% of the rent without adding a few disclaimers is like claiming you always win at the carnival games. You might get lucky, but don't count on it!

They believe the online gurus over the local professionals. Even information on the Section 8 website should be taken with a grain of salt. You see investors overpricing their rental in hope of getting the rent amount listed on the section 8 website. Sad, sad, even the section 8 tenants are not showing up to rent from them. Quality attracts quality. You got crappy rentals you'll get crappy tenants or none at all. Section 8 or private pay, D class or A class, optimize your rental for function, ease of management and resale or suffer.

The most common reason for default by tenants is financial hardship. Unexpected events such as job loss, medical emergencies, or increased living costs can make it difficult for tenants to pay rent. This issue has been highlighted by the recent rise in rental prices. In this context, one may question who is more likely to default: a tenant with a high credit score and minimum income to rent, or a tenant with a low credit score but an income four times or more of the rent amount.