All Forum Posts by: Vadim F.

Agree! People get too caught up in the whole grading scale of neighborhoods and drink the kool-aid of potential gentrification and not wanting to be late so they pay the premium on a neighborhood thats still a D but will potentially be a C in 5yrs. I will invest in a D class area but if the home is on a nice block who cares. If the price makes sense, you have solid boots on the ground, and are getting a solid return......what else do you need???

5 Votes

Cleveland, Ohio

Quote from @Jay Hinrichs:

Quote from @Vadim F.:

1 thing I will say about Sec8 tenants is they value those vouchers like gold. The last thing they want is to lose them. All this talk about Sec8 tenants destroying your property is foolish. They aren't worse then cash paying tenants.

I 100% completely disagree with this statement. I have owned personally over 200 homes that were section 8 . And that is not my experience.. I when i say owned that is because after a few years I knew this was not the gravy train that is talked about.. some markets maybe. Like my section clients in Baltimore do pretty well.. but other markets like Jackson MS and E cleveland and such just not worth it.. your units get beat up .. they take the voucher to the next freshly rehabbed unit and move in. To us beat up is one thing to section 8 its normal wear and tear so your dealing wth 1k to 3k turnovers darn near yearly.

Why are your sec8 tenants moving yearly? My tenant has been in my property for 3yrs already.

0 Votes

Quote from @Shuwei Wang:

Quote from @Vadim F.:

Quote from @Shuwei Wang:

Quote from @Vadim F.:

Quote from @Shuwei Wang:

Hi BP,

We are under contract for our first rental property but found more surprise during the escrow period. The property is sold as is and we already put down earnest money with only financial contingency left. We have our second appraisal coming soon.

Now the inspector did not find this but when we were getting bids from contractor we found multiple other things: possible leak in bathroom and we noticed leak around the chimney flashing. When asking seller about the roof, they said it's a new tear off roof in 2018, no warranty left, and they are surprised that it's leaking.. Surprisingly no one noticed this (inspector or appraiser) until this 1 contractor noticed when we went in day after raining.

Regarding to our situation with earnest money in we may not have as much negotiating power what would you do in our shoes? We are already taking on foundation/basement repair which will be $7-8k and do not want to add another big ticket item.

Go back to the seller and ask for a credit or walk away from the deal. Unless you got the property at a big discount it seems that it won't be worth the risk to deal with.

Thank you for the reply Vadim!

We are definitely thinking asking for seller's credit, discount in price or walk away. But just wondering how to minimize our loss in this situation.

Our inspection was information purpose only without contingency. We passed the date set for appraisal contingency. It seems to me we just have financial contingency left. In this case would I negotiate a seller's credit or otherwise I would disclose the information to lender and use the financial contingency? This is news to us so we haven't tell the lender yet.

I would let the lender know of the issues so it gets relayed to the appraiser.

Do you think it would affect closing the property though if we do want to proceed? I can't imagine any lender would let us close on property with a roof problem still and there's a high chance seller may not want to repair this for us.

Hard to tell. If you’re working with an agent id recommend talking to them

0 Votes

Quote from @Shuwei Wang:

Quote from @Vadim F.:

Quote from @Shuwei Wang:

Hi BP,

Go back to the seller and ask for a credit or walk away from the deal. Unless you got the property at a big discount it seems that it won't be worth the risk to deal with.

Thank you for the reply Vadim!

We are definitely thinking asking for seller's credit, discount in price or walk away. But just wondering how to minimize our loss in this situation.

I would let the lender know of the issues so it gets relayed to the appraiser.

1 Vote

Quote from @Arthur Roberson:

Working on building my team in Cleveland - Specifically, Small Multi Unit BRRRR's. My partner and I want to start by acquiring at least Two - 4 Plex properties to BRRRR, then re-invest into more small multi units, and so on.

I am based in Atlanta, and would love to have some contacts who know the market well. My partner and I will be working with at least 150K Cash to start, and if the area serves us well, we will continue acquiring more properties.

Feel Free to shoot me a PM! Looking forward to getting to know many of you!

Thanks,

You want be all in 150k on a quad? That is going to be really tough.

0 Votes

Cleveland, Ohio

Quote from @Shuwei Wang:

Hi BP,

Go back to the seller and ask for a credit or walk away from the deal. Unless you got the property at a big discount it seems that it won't be worth the risk to deal with.

0 Votes

2 Votes

@Rodney Lorenzo curious where this property is located? Just because the property is located in a low class neighborhood, does not mean your tenant pool will be low class as well. I would highly recommend you find a PM that knows how to deal with the tenants in that specific neighborhood.

From what I am reading, it seem you had rose colored glasses on and decided to get the biggest property you could afford thinking you would be able to cash flow a ton. At the same time you didn't look at the ledger properly to see if the numbers make sense or not. For example, I invest in Cleveland, there is a duplex available for 75k with 1 unit rented and 1 vacant, The tenant on the rented is behind on payments 1.5mo, and looking at the ledger for the past year has only been one time once. Even with market rents being 750mo per unit, I am not going to touch that deal because its not clean at that price, now if I can get it for say 60-65k it might make sense to risk it. Why? Because I am getting it at a discount to offset the trouble tenant. The area as you might guess is D class, but with the right PM in place you'll still get a good tenant.

0 Votes

Quote from @Jake Burkons:

Quote from @Bob Stevens:

Quote from @Jake Burkons:

Quote from @Shane Kelly:

If you're looking for a home that cheap, you're going to be priced out of Maple Heights and Euclid for sure. I'd say you'd be pressed to even find any good C- neighborhood houses for that price. With that being said, there are a select few C-/D+ areas that have some things going for them. Some are already upcoming, some I expect to be in the next few years, but just to name a few: North Collinwood/Waterloo Arts District, Fairfax, Hough, Woodhill Homes, Lee Miles, and maybe North Broadway. I do want to preface though by saying all of those areas are street by street right now and likely will be for some years to come. Having someone who really knows the blocks will be crucial to not getting a trap house in a warzone. Best of luck.

I think I will be able to find another investor who could raise our range around 75k-100k. I plan to buy my next property all out in cash with other investors while interest rates are still high and my credit is relatively low. I have been looking in the Collinwood area though because I have some friends from there (I grew up in Cleveland but recently moved to Austin) and compared to other areas of Cleveland it's not as bad. One area in Cleveland that I actually think is relatively decent is the Mount Pleasant neighborhood and the homes near Van Aken in Cleveland. I definitely see some potential there as well.

Although I have been hearing some news about a potential 122 million dollar investment in luxury apartments and business in east cleveland but i'm not sure how accurate that is. If it's true, areas near there hopefully could become profitable in years to come.

Thank you again for your support.

Sincerely,

Jake Burkons

I am buying everything I can in parts of East Cleveland. I recently picked up a 7 UNIT, across from the RTA,. Last week I locked up 7 more, Lee Harvard, better areas of Cleveland and one in Euclid, all rented for 1100- 1400, all renovated, all under 80k, each.

Is your recent action in East Cleveland due to the potential project? I want to look there but I fear that the crime is too bad and that the homes would have many issues. Have you encountered anything in particular that you have found difficult after buying these properties?

Thank you again for the insight!

Before you buy anywhere in CLE make sure you have a solid team in place and knows each area block by block. This is true for all parts East, West and burbs. Just because a certain zip may be considered low class, doesn't mean the block the property is located is bad as well.

2 Votes

Cleveland, Ohio

Quote from @Bob Stevens:

Quote from @Vadim F.:

Quote from @Jake Burkons:

Hello Bigger Pockets,

I am currently looking for a relatively cheap(25-50k) single family home on the east side of Cleveland and surrounding suburbs. I know the home probably won't be in the nicest area however there are some decent areas in Cleveland and suburbs like Maple Heights and Euclid that I'm considering.

Do y'all have any recommendations of what areas in particular to look in?

Also is there anything in particular I should look out for when buying a home in these areas. I know crime isn't great but are there any other outlying factors that would be detrimental for an investor?

Sincerely,

Jake Burkons

You want be all in for under 50k? Thats going to be tough, unless you are going to be all cash in a warzone. I would focus on higher priced properties in 100k range or so that are already tenant occupied where you could qualify on the income they are producing already. Then you can go in at 75 LTV (MFH) on a DSCR loan.

Regarding East Cleveland, there is money being poured into the area so it becomes an extension of UC, hence be called CircleEast but that will only be the first 10 blocks or so along Euclid.

SHHHHHHH STOP telling everyone about East Cleveland, HMM wonder who told you that :)

I picked up a 7 unit right near the RTA.

Hahaha, can’t find anything out there at all. I’m going to start looking at Glenville between Superior and St Clair. You know I’m attracted to war zones lol

1 Vote

Cleveland, Ohio

All Forum Posts by: Vadim F.

Vadim F. has started 10 posts and replied 333 times.

Post: Agree Or disagree and why.

Post: The bad neighborhood I invested in may kill my investment

Post: Question regarding roof repair during escrow

Post: Question regarding roof repair during escrow

Post: Cleveland - Looking for anyone local/Experienced in Small Multi Unit BRRRRs

Post: Question regarding roof repair during escrow

Post: The bad neighborhood I invested in may kill my investment

Post: The bad neighborhood I invested in may kill my investment

Post: Investing in the east side of Cleveland and suburbs

Post: Investing in the east side of Cleveland and suburbs