All Forum Posts by: James Maradits

By and large I'm going to disagree with others and say that there is a good chance you could stand to invest in some updates to the properties to attract better (and longer lasting) tenants.  I probably "over improve" many of my "C" class type units compared to others in the neighborhoods I'm in and as a result my rents are a little higher, but my tenants are happier to have nice amenities and tend to stay longer while taking better care of the places.

With that being said the asset type/location of the 44111 duplex is probably part of the problem for you.  If my research is correct we're looking at a 1895 build-- which is problematic and maintenance intensive due to its age and many nuances like the fact that these houses were built before people had modern amenities like kitchen appliances so often times the floor plans are not functional and cost prohibitive to do so.  An outdated floorplan along with things like the blue carpeting are going to really limit your tenant pool here.  I would have likely advised against the purchase of this property.  It looks like you purchased with a non local agent who doesn't specialize in the Cleveland market so that was probably not the wisest choice.

The 44144 home looks like a good one and I'm surprised to hear that you're having problems with this.  Perhaps this one boils down to more of a management issue?

Feel free to PM me to discuss further if you'd like, I'd be happy to provide any input I can to help steer you in the right direction!

Sent you a PM

I'm sorry that you're going through this experience!

This is a classic example of the $40k house that looks good on paper but won't perform in reality.  These are famous for being money pits with bottomless appetites.  Also, just look at the pictures... would you be happy coming home to a disintegrating driveway and house with mismatched siding?

This is a high crime, low income, economically distressed zip code (source: google).  This is going to obviously drastically reduce your potential pool of renters since fewer people are going to want to move into this location and the ones that will move in will likely be part that economically distressed group which will make it hard for them to meet your screening criteria.

I'm sorry to say it, but I think you bought wrong or have the wrong expectations.  I'm familiar with the management company that you're using and they are one of the, if not the biggest player in the market and seem to run a solid operation -- so I don't think that this is a management issue but rather an issue of the location and property.

I wouldn't keep throwing money into this property.  I would highly consider selling, learning from your experience and moving on.

Send me a PM if you'd like, happy to help out in any way I can so you can get back on track.

You're probably going to have to compromise somewhere on your criteria/expectations. 

It's going to be near impossible to find a property that hits the $500+/mo net cashflow number in that price range.

It would be pretty easy to work some scenarios with the end goal in mind to see what kind of numbers the deal would need to have in order to hit your goal.

Let's assume there were a $100,000 property in a C area that needs little repair before renting ($5k).  Let me express that this alone is going to be tricky to find in our current low inventory market, but we'll put that aside for now.  In most of Cuyahoga county the property taxes are (or will be assessed to) roughly 3% of the property value, so in this case we'll use $3,000/annually to keep it simple.  C class properties worth $100k will generally rent somewhere in the $1200/mo range.

$100,000k purchase price financed with 20% down at 7.5% interest (typical range for investment currently)... your PITI would be roughly $865/mo

Rent: $1200/mo

PITI: -$865/mo

Property Management: -$120/mo

Cashflow before ANY expenses, vacancy/capex reserves, etc.: $215/mo

Setting aside even 8-10%/mo for any type of reserves and you're under $100/mo cashflow.  In order for this deal to hit $500/mo the purchase price would have to be almost exactly half, or $50k OR the rent would have to be $1600+/mo which is going to be highly unlikely or unattainable in a $100k property without doing any major renovation.

Quote from @Vannel Dzigba:

Thanks for the input, @James Maradits.

I'll explore the option of having a go at it myself.

On another note, do you have any great deals in Cleveland that I could take a look at?

Take your time and do your research before jumping into the Cleveland market.  There is a lot of opportunity here but there are also a lot of bad actor agents and property managers who will just tell you what you want to hear just to make a sale.  I can't tell you how often I see out of state investors tricked into buying bad properties by clever (or ignorant) agents.  I would encourage you to visit Cleveland and take some time touring different suburbs and parts of the city before investing here if you are able to. 

Congrats on the new purchase!  

Although I don't know your personal situation, I do think it sounds a bit silly to hire a manager to find your roommates for you.  I would treat this as an opportunity to cut your teeth and learn the process, while also maintaining the ability to select roommates that you will be happy getting along and living with.  I can all but guarantee that having this experience will be invaluable and allow you to better understand basic property management operations as you begin to build and grow a real estate portfolio.  I suspect you can do this much more easily than you think with all of the great resources available online to locate and screen renters.

Best of luck to you!

Quote from @Shane Kelly:

Really if a property looks good on the numbers and in the pictures, then you just need a good inspector to tell you if it's truly a good deal or not. Because if the inspection goes well, there's nothing more to consider.

This is absolutely inaccurate and terrible advice to give.

Thanks for the kind words, Lauren!  So glad we were able to put this deal together for you!

Chances are that if you bought in 2019 your properties have appreciated enough to the point where you may be able to sell for a return.  I would explore this option.  If it makes sense to do you can likely roll those proceeds into better properties or properties in a municipality that doesn't have the lead cert program and/or lower taxes.

Originally posted by @Brian Garlington:

Columbus Realtors will start responding in 

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