All Forum Posts by: Oren K.

Stanci,

It is not clear to me what you are trying to secure. Is it the building, the units, the tenants, ??. Here are some elements of security to consider;

  Building Entry Doors Access Systems - How do visitors notify tenants that they are at the entry door? Can the tenant see & hear who they are letting in? Can you disable an individuals access when they move out?

  Unit Entry Systems - Peep holes? Door bells? Code entry? Key?

  Video Cameras & NVR - Remote access? Recording history? Property Coverage (internal & external)?

The 'best' security system is the tenants themselves so if there is a 'disturbance', they come out to see what is going on and if something needs to be done. 

Oren

Jami,

A cabinet (kitchen or bath) has essentially 4 main components; the frame, the decks / shelves, the facing and the doors. The materials used in making these drive the quality and the cost;

  - Particle board (and there are different grades of this) is the cheapest

  - Plywood is better (again different grades)

  - Solid Wood is best (and again different types)

Water is the enemy of wood in general and cabinets specifically due to humidity and leaks so I prefer solid wood frame with plywood decks / shelves. If there is a leak, they get the most exposure. Not as concerned about the facing or doors.

How things are joined also comes into play; glue breaks down and water will swell particle board much more then plywood or solid wood. Finally, joints are 'weak' spots so dovetail & screws are better then glue and staples.

Make sure you are comparing apples to apples when looking at different cabinets.

Picking counter tops is impacted by the tenant class you are targeting. Someone paying $1200 a month may expect stone (e.g. granite or marble) but someone paying $600 a month is going to take what ever is there.

Note that I haven't even touched on styles.

@Rob DeLaurentis at this point in the cycle I would challenge the appreciation question as well even in what is considered by many to be the worst inner suburbs; East Cleveland. It really depends on when you got in. 

A few years ago, you could get a medium to larger multifamily (>10, < 100) for ~ $10K per unit (or even less!), do significant rehab of $7.5K - $10K and rent out for $450 - $550. All in <$20K per unit and hitting 2.5%-3% rents. It costs more to operate, has higher vacancy / turnover and you need a PM that can deal with the tenant class but certainly makes money once stabilized @ 80 - 85%.

Today, those properties are selling for ~30-35K per unit (even >$40K) and the rents are $575 - $675 (Still 1.5% - 2% rents). Classic forced appreciation of about 1.5x - 2x.

If the property is maintained, I think (for whatever that is worth) in the short - medium term there is still some room for rents to go up a some (10%?) and then you will not see a property trade at less then $40K and even $50K per unit.

Ike,

First of all welcome to BP. You will find a wealth of information and help here.

To answer your question directly, repairs and CAPEX are separate things. It is not possible to estimate repairs without knowing more about the property and to estimate it reasonably, you (or your contractor) need to walk it. Once you do this a few times, you get fairly accurate. Many people use 10% for CAPEX but that really only scratches the surface.

Repairs are things that you intend to do immediately. CAPEX are amounts that you will be setting aside to cover various items that you expect to replace over time (your expected hold period). Also, Repairs and CAPEX to a large degree is independent of rents collected or purchase price.

On the repair side, the cost of painting a 2 BD apartment will be roughly the same regardless of rent collected and how much you paid for the unit.

On the CAPEX side, if you do the roof after you purchase the property and intend to only hold for 10 years, you are unlikely to need to do the roof again during the period and it will cost you about the same regardless of if it is a high end property or dump.

Good luck,

ORen

Lior,

Just checking if you mean the City of Cleveland or one of the surrounding municipalities (inner or outer) as it changes a bit on a city by city basis. I'm sure @James Wise knows his stuff for Cleveland proper and the West side as he deals with it day in and day out but others may / do have slightly different procedures / rules

In the city of East Cleveland;

- Serve the 3 Day notice (assuming like James simple non-payment of rent)

- File on Tenant (you usually get a court date within 2-3 weeks), cost $155 I believe

- In court, show that there is a lease and there is non-payment (I've actually sat in on this and watched the property manager / eviction lawyer basically read a script covering all the legal points)

- Judge will usually give 7 - 10 days for tenant to get out (with or without stuff) OR get landlord to accept payment (even if payment is offered many landlords decline as they don't want the tenant)

- On eviction day (if the tenant is not already out), court officials show up to remove the tenant at which point you can change the lock. Anything left in the unit is considered abandoned and can be put in the trash

There any number of lawyers whose entire practice (just kidding) is evicting tenants across multiple municipalities so let us know where the property is and I'm sure we can dig up a referral if you need one.

Oren

Ran across this nice summary of each city in the greater Cleveland area regarding Point of Sale, Occupancy Permits, Inspections, etc. Includes contact information for each city.

http://clevelandhousehunt.com/point-of-sale-requir...

A bit dated (2015) but likely mostly accurate as these things don't change often / quickly. If people post any updates they are aware of, we can fill-in / update any blanks.

On that note, this past summer, the City of East Cleveland passed ordinances that increased occupancy permits x 10. 

If I am reading them right (I have the PDF's);
Non-Owner Occupied

Ordinance 14-17:
 $100 per unit annually for units 1 & 2, $50 for unit 3
 $100 per unit annually for all unit >4 (not sure if you save $50 on 3rd unit)

Reading this ordinance carefully, unit 4 may not actually be covered

Owner Occupied

Ordinance 15-17: 

  $100 on sale of 2-3 unit
  $400 on sale of 4-39 unit
  $1,000 on sale of >39 unit

Ordinance 16-17: 

  $100 on sale of Single Family House

Not sure if these are over and above the POS inspection fee required for a sale in East Cleveland.

Taylor,

An LOI is just about 'intent' and many explicitly state that the LOI itself is not binding. The terms laid out in an LOI have to be incorporated into a Purchase Agreement which gets executed; many deals fall apart during the negotiation of the purchase agreement. When it does get signed, that becomes the binding document for the transaction.

Regarding commissions; I have seen this in various online confidentiality agreements (CA). Not being an agent, it does not affect me but I would say when you put in your LOI, declare that you are an agent representing yourself and your commission expectations. I believe that the listing agent has a fiduciary obligation to bring any legitimate offer to the seller. When the purchase agreement gets drafted, just make sure everything is spelled out.

The other one that I have seen is where the CA states that as the buyer, if I bring an agent, I am responsible for their commission. I generally don't worry about it since as I stated above, the LOI can redefine things and at the end of the day, the purchase agreement is the only thing that counts.

Oren

Shalom Danny,

Welcome to BP. It is a great resource for education and networking.

There are any number of agents from the Cleveland area who are regular contributors to BP.

  @Federico Gutierrez: has already posted. He, I believe, works for Holton-Wise who is a PM (almost a Turnkey provider). Mostly focused on the West side. They re-post MLS / Loopnet stuff on MarketPlace

  @Matthew King: Really knows the East side and has worked with many out of state and out of country investors

  @Ben Baker (Still can't get the @ to work for his name) who has worked for larger brokers but I think is out on his own now

   @Tom Ott who works for Smartland which is a Turnkey provider.

and others. They have all worked with Out of State Buyers and probably Out of Country Buyers.

Not sure which (if any) can / have 'off market' deals as really that is not in the best interest of their client / Seller. It would probably be useful for you to state what kind of properties you are looking for; SFR, <5 MFR, >5MFR, etc.

Good hunting,

Oren

Let me rephrase the question; what is the most comprehensive source for all real estate transactions? Answer: the land registry in your county. At the end of the day, all title transfers have to go through them. Unfortunately, they generally have not set up the tools needed to extract the information (or they don't provide public access to them) needed.

So you go to the next best source which has also has the tools needed. MLS still gets the vast vast majority of single / small multi-family listings and their members (agents) have access to tools that let you 'mine' the data.

Sites like Zillow / Trulia get their data from the county (and MLS?) but again don't really have the tools (e.g. Days On Market, Price Changes). I think they are good for 'spot checking' but take more effort.

Dustin,

To answer your question; bringing funds back to Canada is a simple wire transfer process. Whoever is you PM can do this as you instruct.

As @Linda Labbe states there are a number of possibilities for how you set yourself up but they are very dependent on your personal situation and what you are trying to achieve. Do you want to take the hit of US $ -> CAD $ conversion each time or accumulate US $? Why are you bringing funds back? How much should you set aside for taxes? What kind of taxes will you be paying?

Having said that, you will eventually need to get together with a CA and Lawyer who BOTH have cross border expertise BEFORE you buy. There is a lot of mis-information on the NET and your objectives will impact what the right solution is for you.