All Forum Posts by: James Maradits

Thank you for this.

Although this particular conversation is directly intended to be a Cleveland vs Columbus discussion, the "Cleveland Real Estate Forum" is now just a tool for the Columbus shills to talk about how much greater Columbus is than Cleveland rather than a resource where actual investors in the Cleveland market can have constructive conversation.  They're going to milk this one for all its worth then move on to pirating the Indianapolis, Detroit, Pittsburgh, and Buffalo forums next.

Hi Lisa! I can help with this, I'll shoot you a PM to discuss.

Originally posted by @Remington Lyman:

Originally posted by @James Maradits:

Originally posted by @Remington Lyman:

Originally posted by @Jim Jones:

Hello everyone,

Anyone have any intel or experience with multi-family rentals in Cleveland Ohio? I was browsing through redfin and I noticed that homes can be purchased for as low as 50k! I'm looking to invest outside of the Los Angeles area, someplace a bit more affordable. My goal is cashflow!

Any help is welcome and greatly appreciated.

Best,

Jim

Yeah, properties are cheap in Cleveland due to the declining job and population growth. I recommend checking out Columbus, Ohio as well. It is a little more expensive but you can still find cashflow.

 Here you go with this chart again....

It should really be a comparison of MSA's, not just Cleveland vs Columbus.  A vast majority of investors inquiring about "Cleveland" are really talking about Greater Cleveland MSA which is a lot more directly comparable to the Columbus MSA.  Of course there is a population decline in Cleveland from our industrial era peaks as those industries are now gone, but the actual MSA isn't a mass population exodus as your favorite chart makes it out to be.  A lot of the migration from Cleveland is just to its surrounding suburbs which are still in the same MSA.

No disrespect to the Columbus market, and I respect the hustle and understand that you're just trying to poach people interested in our market and persuade them to go to Columbus instead, but I don't suppose anyone who's really doing their homework will be that easily convinced, especially when Cleveland home values are in fact appreciating AND the cashflow is typically better.

 I fixed the chart

Perfect.  Mind if I use this in my marketing package? hahaha

Originally posted by @Remington Lyman:

Originally posted by @Jim Jones:

Hello everyone,

Anyone have any intel or experience with multi-family rentals in Cleveland Ohio? I was browsing through redfin and I noticed that homes can be purchased for as low as 50k! I'm looking to invest outside of the Los Angeles area, someplace a bit more affordable. My goal is cashflow!

Any help is welcome and greatly appreciated.

Best,

Jim

Yeah, properties are cheap in Cleveland due to the declining job and population growth. I recommend checking out Columbus, Ohio as well. It is a little more expensive but you can still find cashflow.

 Here you go with this chart again....

It should really be a comparison of MSA's, not just Cleveland vs Columbus.  A vast majority of investors inquiring about "Cleveland" are really talking about Greater Cleveland MSA which is a lot more directly comparable to the Columbus MSA.  Of course there is a population decline in Cleveland from our industrial era peaks as those industries are now gone, but the actual MSA isn't a mass population exodus as your favorite chart makes it out to be.  A lot of the migration from Cleveland is just to its surrounding suburbs which are still in the same MSA.

No disrespect to the Columbus market, and I respect the hustle and understand that you're just trying to poach people interested in our market and persuade them to go to Columbus instead, but I don't suppose anyone who's really doing their homework will be that easily convinced, especially when Cleveland home values are in fact appreciating AND the cashflow is typically better.

I don't suspect you'll find much (or any) added appeal by having a dishwasher.  I've never had anyone even mention it in any of my units.  About half of my units have them and from what I can tell most of the tenants don't even use the dishwashers.  This is probably more so the case in 1-2 bedroom units, but it *may* be more appealing in a 3/4 bedroom place that is likely occupied by a family.  I tend to stay away from them because I've found that they can become a maintenance issue when not frequently used or used properly, which isn't worth the trouble when most renters aren't expecting to have one.

Laundry hook ups are definitely appealing to everyone, but I am phasing out any washers/dryers that I supply in my units because they are a maintenance nightmare.  Over half of my maintenance requests involve broken washers or dryers.  I'm not sure if it's because they are being overloaded, shared with friends, or what the case may be, but it's not uncommon in our market for renters to have their own and bring them along to their new home (a lot of people probably prefer this over sharing with others anyways).

My theory is that the best method is just making everything as nice and modern within reason as you can afford to in order to attract the best possible tenants.  People will appreciate nice flooring, fixtures, paint, updated bathrooms (it blows my mind how many landlords will leave disgusting outdated bathroom tile and fixtures in units), etc. more than anything.

There are a few challenges/downsides of financing the initial acquisition of the BRRR. Typically a BRRR type property will be a fixer upper in need of rehab which may not even qualify for traditional financing in the first place depending on the lender's minimum acceptable criteria. If you are in a competitive market, there is a fair chance you will be competing against cash offers from other investors who can potentially pay more or close faster with cash if the property is indeed a fixer upper. You will also have to pay closing costs on the first loan and again on the refinance loan which will be several thousand dollars at a minimum. There is also a chance that your initial loan may have some type of prepayment penalty if you pay it off in a short amount of time like 1-36 months into it (but not always the case).

With that being said, if the deal is good enough and you can account for all of these variables it is certainly possible to pull off.

Build your credit! This is absolutely the number one thing you can be doing now. It will take a bit of time so best to start sooner than later. If your parents or any other friends/family have great credit scores with long history ask if they can add you as an authorized user to their credit card(s) which will help give you a boost, but otherwise work on getting your own credit card and consistently using it in small amounts and immediately paying it off.

Also work on saving as much money as possible so you have reserves and money towards a down payment as soon as you're ready to make a move.  I would suggest looking for a part time job in the industry while you're in college, perhaps as an assistant/field runner for a property manager or agent.

I've encountered these in the past and was concerned-- I actually turned down a really great deal years ago due to the unknown with the gravity furnaces at the property that I'm still kicking myself over.

Realistically if they are in working order they will likely continue to work for a long time or be easily serviced due to the lack of moving parts within.  When it's time to replace, I would budget anywhere from $2,000-4,000 a piece depending on the size (BTU) needed and to what extent the duct work may need to be modified or resized for the new furnaces.

I typically try to stay with the late 1940's and newer properties when possible.  There are always exceptions and I have done plenty of deals with older properties, but from a rehab and maintenance perspective I've found that this range inventory is generally a lot more predictable.  The early 1900's houses often have bizarre floor plans, settling, and other intricacies that make updates and maintenance more complicated opposed to the newer inventory where there are typically more "off the shelf" type materials that can be used in the event of repairs or maintenance.

@Whit B.

Whit,

No need for the animosity. This is an open forum for discussion and bouncing ideas off of each other, but not an echo chamber. Everyone in this thread is providing feedback or concerns based on their own experience and research in an attempt to help, not get into an argument.

Best of luck to you.