All Forum Posts by: Jad Boudiab

@Nicole Heasley Beitenman Always nice to build that network.

Talk to @David Bardwell, he has an ongoing meetup in Cleveland and may have some tips.

@Robert Matelski 

These are all great observations; first, we must note that no reasonable investor is just buying property off of what they see in a map at a quick glance. Second, we must note that the 6 months of MLS comps run between late Nov 2018, and late May 2019, as the map was created an published in end of May. And lastly, while some of your observations would be accurate if we were to complete this on a street-by-street basis, it's nearly impossible to isolate certain neighborhoods when generalizing an entire neighborhood due to a. the region was either too small to isolate, or b. the region had too few sales to consider.

Going even deeper (closer look, almost street-by-street) into neighborhoods and analytics might show different results, that's where someone like @Art Perkitny might have more insight on or can configure. I had not come across his work until today, they seem to specialize in this, would be cool to whip up an interactive map using their data, and would save a ton of time.

One very good point in your feedback is the map's lack of outline based on zip codes, city boundaries, or census tract boundaries. This is a flaw, but not a major one. The map still is only based on average prices, and all of the neighborhoods you referenced are bordering two or more different grades. This is where that "spillover effect" happens, which is exactly why we recommended in the post for investors to always review comps of nearby sales. Sure there's room for improvement by going even deeper, almost street-level stuff, but that will take far too much time for a broker to dabble in :)


"The area you've drawn here contains portions of Cleveland, East Cleveland, Cleveland Heights, Euclid, and South Euclid (touching on zips 44106, 44112, 44118, 44121, and 44117) and seems far from sufficiently homogeneous to make it one single area as you've drawn it (assuming price is your only driver). A subset of this area (in Cleveland Heights), bounded by Coventry, Mayfield, Euclid Heights, and Lee, shows sales between $157k and $299k over the past 6 months. Although there were some comps in the 30's during our 6-month period, this is a solid neighborhood. If we were to split it as its own we would likely have marked it a B area. In the .3 miles this area covers, it likely was diluted by lower comps in neighboring streets just outside of this geo-area you referenced, and thus lead to a lower grade. This could be avoided by your suggestion of using zip, city, or census data. Another subset of this area (in East Cleveland), bounded by Lakeview Cemetery, Superior, and Euclid Avenue shows literally no sales over the past 6 months (perhaps because it's so blighted). There are too few sales here, the entire area between Euclid Ave, Superior, and Mayfield only contained 3 sales comps, one of which is referenced below under Little Italy. This is a sub-market too small to dissect, considering only 3 comps in a 6 months span (.8 mile radius in total, only 3 comps. This is still inner city we're looking at, with homes feet apart from one another, not suburban where each home occupies several acres of land). Therefore, the neighborhood was looped under a similar grade of the surrounding areas. It's another one of those neighborhoods that's bordering a mix of neighborhood grades, there will be spillover, and the investor must look more deeply at each property. It's an area that would likely change upon future adjustments, when more sales comps are available. While yet another subset of this area (in Cleveland), bounded by Euclid Ave., Belvoir, and Cliffview has sales ranging from $24k to $36.5k. Another case where too few sales to consider, a $102,000 comp (2270 Belvoir) lead to a higher price and affected average pricing, thus affecting the neighborhood grade. This is another case where it's too small of a neighborhood to isolate, and too few sales, lead to producing such a result / grade. It also is another one of those neighborhoods that's bordering a mix of neighborhood grades (D to the north, lots of $100k+ comps to the south) where there will be spillover, and the investor must look more deeply at each property, but would likely change upon future adjustments and additional sales comps. And finally, just for fun, a 4th subset of this area (in Cleveland, "Little Italy"), bounded by Mayfield, the rapid transit tracks, Euclid Avenue, and Lakeview Cemetery has sales ranging from $114k to $473k. During the 6-months time-frame we considered, there was only one sale in the neighborhood you're referencing, for $145,000 (1940 East 124 Pl). Due to only have one sale to look over, we could not isolate it as its own sub-market just yet. This too was diluted by neighboring comps and may be reflected different in future revisions where a $400k sale (more recent sale that came after our 6-months timeframe) in the neighborhood would easily bump the rating.

The east side of town, and Cleveland proper in general, is far too intertwined to truly isolate it into hyper-local (pretty much street-by-street) levels. If we were to shift some of the neighborhood borders slightly, we would suddenly come up with different grades because one or two comps would have dropped or were added, making a big difference in a compact market. It does sound very cool to craft in theory, but I'll leave that for someone with more data and technology to work on. I would still be cautious about providing a super hyper-local map to rely on, which increases temptations for investors to blindly follow a map due to its accuracy at its time of creation, and placing lesser importance on recent comps to their subject property.

Robert, the entire map is based off of pricing, most recent 6-months of MLS sales to be exact. As a broker, that is the purest way to remain objective. If there's anything you disagree with, I'm happy to send over more MLS data on it.

There will always be disagreements on neighborhood grades, in the end a neighborhood grade is subjective, that's why we tried to stay objective to the market and chose to only use average pricing as a factor. I always laugh when I see properties in my D/F areas marketed as "Amazing CASH COW in C+ area!" by many wholesalers.

 No deal, I've already taken @Federico Gutierrez off your hands, that pre-pays for any licensing fees you're contemplating.

@Ravi Singh since this would be your first time in the Cleveland market, go for a solid neighborhood with a consistent tenant base. Shoot for B neighborhoods like Parma or far west side of Cleveland. There are other municipalities like Euclid, S Euclid, Cleveland Heights that are worth looking at once you familiarize yourself with Point of Sale inspections.

I second Neal. Also talk to @Account Closed on this, he's done several projects for ours clients and is a straight up dude.

@Dan Dalby check out the Cleveland Price & Neighborhood Map as a starting point. It will show you a local’s breakdown on the neighborhoods & prices. You can couple this with a quick search on Zillow, to help you assess market rents.

There are many BP users with Cleveland experience, the forum discussion Brian posted is also a good place to start. Happy investing!

 Stash the cash, and wait for the crash. (correction might be more appropriate).

Multi-family prices are stupid right now. I typically would follow the don't wait to buy real estate, buy real estate and wait, but current prices are so inflated that unless you find a hidden gem somewhere I would hold off on buying multi-family.

 Young-ish entrepreneurs fail because they have the wrong perspective. A short-term perspective.

In a world of instant gratification, people forget about the long game and only think about today. How much they can make on this flip, or how much capital they can raise for this one deal, and not thinking about the future.

Real estate is a get rich slow game. No instant gratification.

No one has gotten rich by buying one property. You have to be fully committed to play the game long-term, or odds are you'll fail. This applies to real estate, business, relationships, health, and just about everything.

 Hey man, I remember you coming by our office earlier in the year and talking contracting. You have enough knowledge on construction through yourself and your team that you can do well as a reliable contractor, instead of a project manager. You should clear 18-20% profit margin on your projects as a GC with staff and subs, just make sure to have clean and detailed customer contracts, subcontractor agreements, and insurance / registration in place and renewed every year.