All Forum Posts by: Michael Wentzel

@Yesenia C. We lived in Colorado Springs before we moved overseas seven years ago and returned there this year. We had two rentals while we were overseas and turned them both over to a property manager. There were no problems and we were happy not to be concerned about the vacancies and repairs.

So when we came back this year we started looking again. I heard a quote... "Live where you want to live, but invest where the numbers make sense." The numbers seem to make sense in Pueblo and not so much in Colorado Springs. We have limited money for down payments, so we're looking at properties under $100,000. We want the rents to be 2% of the purchase price, Return on cash investment (ROI) over 30% and cash flow $200 to $300 per door even though we're carrying mortgage on the property and paying property manager. There is little chance for appreciation in Pueblo, but we're most concerned about monthly cash flow.

So don't be worried about investing out-of-state, especially if you life in California. Keep learning about Real Estate, research a few markets, pick one, build a team (realtor, property manager, lender) and go for it. One good thing about Colorado and Pueblo in particular is that we're learning with relatively small amounts of money. $10,000 to $20,000 to get a rental property is a better way to learn than throwing everything you have into one property. When our mortgage, taxes and insurance are $200 to $400 per month, we can afford to make some mistakes and learn lessons.

Mike

@Denzel Myers Welcome to Bigger Pockets! If you're looking to learn and take your first few steps into Real Estate, you've come to the right place. When we bought our first house 9 years ago, we actually had to rent out the basement so we could afford the mortgage.

Buying a house while you're in college and letting your friends pay the mortgage sounds like a great idea. Since the house will also be owner-occupied, you should be able to get better interest rates. The challenge might be qualifying for the loan as a college student. Have you met with a couple lenders? I would sit down with one of the national banks and a couple local banks to see where you're at and where you'll need to be to purchase next year.

Mike

@Ryan Arth Fair enough. Thank you for your input.

I'm also putting 25% down and getting about 5.5% on a 30-year mortgage to reach those ROI numbers.

@Ryan Arth

Mike

@Ryan Arth It is great to have another experienced investor from Cleveland adding input. I'm pretty new to real estate investing and certainly new to the Cleveland area. I have owned two rental properties in Colorado Springs for the last few years. I recently sold one and I'm now under contract on my first multi-family. It should close in a couple of weeks and I'm looking to purchase another property before the end of the year, either in Pueblo, CO or Cleveland.

I'm looking for long-term (10+ years) buy and hold. I'm open to single-family or multi-family. Here in Colorado, I've found 2% rent to purchase price, above 13% cap rate and 35% roi when I put 25% down and factor in 10% for property managers, 10% for maintenance and 5% for vacancy. I'm aiming for $200 to $300 monthly cash flow per door.

Here in Pueblo, I'm looking at $40,000 to $50,000 for a single-family home and $75,000 or more for a multi-family.

My question is can I get a multi-family in Cleveland for less than $40,000 that will beat 2% rent to purchase price, above a 13% cap rate and more than 35% roi?

Regarding neighborhoods, this is what I've gathered from Christian and Jorge...

Eastside-

Euclid- block-by-block

Lakewood- good area, high taxes

Bedford- ?

Shaker Heights- good area, high taxes

Westside

Ohio City

Tremont

Old Brooklyn

I would really appreciate you input on neighborhoods and whether or not certain areas of Cleveland will exceed the numbers I've found in Colorado.

Mike

@Jorge Garcia Thanks for you insight into the different areas of Cleveland. It is helpful as I continue to do my research. I might be interested in purchasing one of your properties as my "guinea pig" for the Cleveland area. I'm under contract on one here in Colorado at the moment and have a couple busy weeks coming up. But I'll reconnect with you in early November to learn more.

@Christian Carson So far you've proved yourself the most knowledgeable and active Cleveland advocate on Bigger Pockets that I have come across. Thank you for sharing your experience.

@Powell Slinkard Welcome to Bigger Pockets! The good news is that there are a ton of people more experienced than me on here. I recently sold one of my two single-family rentals and I'm now under contract on my first multi-family.

I would opt for taking at HEL out and using it down payments on as many properties as possible. This would help create leverage (usually a good thing) and solve my major problem, which is cash for down payments. I would find a few good lenders to chat about this and see if it is possible.

While leverage is usually a good thing, it might be worth investigating how much leverage is too much. You should probably figure this out before moving forward.

Mike

@Jorge Garcia Welcome to Bigger Pockets. I'm out in Colorado, but I'm starting to do a bit of research on Cleveland. Everyone says to avoid the Eastside. Does this mean East Cleveland? Are there more areas that people are referring to?

I have a short list of Euclid, Bedford, Shaker Heights and Lakewood that I've picked up in my research as possibilites. Do you have any insight into these areas?

What are you considering selling? What area? What price?

Mike

That is some slick marketing showing the bright side of Cleveland. Thanks for posting it.