Newbie in Northeast Ohio

[Mark Lenox]

Hi, everyone. I am Mark Lenox, living in Valley View, Ohio south of Cleveland. After two decades in the Direct Mail industry, working my way up the corporate ladder to Vice President, I lost my job in late 2012. I am an entrepreneur at heart and decided to start my own company rather than relocate and continue to make other people wealthy.

Other than my own residences, I have no experience in Real Estate and none whatsoever as an investor and flipper. I have family who've been in real estate their entire careers, and it feels like a good fit. I read J Scott's BP The Book on Flipping Houses, and now I'm ready to rock and roll.

I'd like to rehab four properties this year and build the business to the point where I am making more money then I did as Vice President.

At BP, I'd like to find education, opportunities, networking with those in the biz, and most of all MOTIVATION.

[James Wise]

Welcome to the site mark. What cities are you looking to flip in?

[Mark Lenox]

Hi, James. Thanks for the welcome. I was just looking at your website. Do you only focus on investors who hold?

I am a bit torn about where to begin. My challenge is that my real estate industry contacts are in Tucson, Arizona, so I have been actively deal-hunting by proxy down there for about a month. However, I listened to the latest podcast with @J Scott, and now the idea of investing away from home is scaring me a bit.

I would be interested in focusing on 44067 Northfield, 44056 Macedonia and 44087 Twinsburg, but in all honesty that's just a "gut feeling". I don't have access to MLS up here like I do for Tucson, making it very difficult.

Any advice you could give would be great.

Thanks much!

[Christopher Boggs]

Welcome to BP and the Cleveland real estate investment market. A few tips

• There are many good opportunities in the Cleveland area, so be sure to take a look at a few before buying your first.
• Have your agent give you extensive MLS comps of flips in the area after you purchase a house. Use this data to make sure your renovation plan doesn't over improve the house. I made that mistake on my first retail flip, and we blew most of our profits doing so.
• Be careful of cities with Point of Sale Inspections. It is something that has become popular in the Cleveland's surrounding sub cities (not the city of cleveland). Sometimes its only on vacant (bank owned) properties, and sometimes its for all property sales. The city building department makes a reporting listing all repairs that must be done before sale. If the seller won't make the repairs (like banks). Then the buyer has to put cash in escrow until the repairs are made. The escrow amount is based on the potential cost of the repairs. They can make you: Put $10,000's+ of cash in escrow until the repairs are made, Hold up selling your renovated house until every last detail is fixed, and Worst of all they sometimes add new items that weren't on the original POS report.
• I am not familiar with Macedonia, but Twinsburg seems a bit expensive for flipping. Usually you can make more money flipping a couple cheaper houses than one expensive one. They sell faster, and you diversify your investments
• You need access to the MLS, because when the good properties hit zillow they are usually already under contract.

[Paul Timmins]

@Mark Lenox

Welcome. Time to build the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Good luck

Paul

[Aaron Westerburg]

Hey Mark, welcome to BP. I grew up in Independence, but now I live in Macedonia.

Let me know if there's anything I can help you with.

Maybe with you're direct mailing background you should consider finding off market properties and motivated sellers through mailings. This could be a good way to find great deals to flip and/or wholesale.

Aaron

[Mark Lenox]

Thanks, all!

@Christopher Boggs great tips! I hadn't heard of POS inspections. Yet another way for the local govt's to get their palms greased, I suppose. How can I find out which cities require this? Any good agents in the area you would recommend? I can't look at MLS without an agent. My price range is currently $125m (cash) total purchase + renovation, so if Twinsburg is too high, they wouldn't come up in my searches. I am concerned about Northfield, with the new Casino and all.

@Paul Timmins thank you. I began this whole trek by reading J Scott's The Book On Flipping Houses, and it's very good! My main issue is simply staying motivated.

@Aaron Westerburg thanks for the welcome. How much success have you had in the area, if I may ask? Same question as Christopher: who would you recommend, agent-wise? I have thought about marrying my DM background with this, but first I need to gain experience and actually do a flip! At this point, the market is still heavy with REO's, so I think the DM piece will be more helpful when that dries up (if it ever does).

Thanks, all!

[Mark Lenox]

@Christopher Boggs and @Aaron Westerburg , do you attend or know of any good REIA groups up here that you would recommend?

[Aaron Westerburg]

Hey Mark, welcome to BP. I grew up in Independence, but now I live in Macedonia.

Let me know if there's anything I can help you with.

Maybe with you're direct mailing background you should consider finding off market properties and motivated sellers through mailings. This could be a good way to find great deals to flip and/or wholesale.

Aaron

[Aaron Westerburg]

Mark, the Great Lakes REIA is a really good group. I am a member, and I have made some great networking connections.

I've been involved with fix n flips in Brookpark, Cleveland, Lakewood and Westlake. Right now I'm working on a couple wholesale deals and a couple of buy n hold rentals.

With the DM you can find better deals with no competition compared to REO's and MLS deals. Remember, you make your money when you buy.

[James Wise]

@Mark Lenox my investment companies primary focus is in rentals. That said, as a Realtor I work with investors in any capacity of Real Estate.

[Christopher Boggs]

@Mark Lenox - POS Inspections - You really just have to check with each city as you look at houses, and you will build a mental list as you go. When I started I would just call the cities building department and check when I found a property I liked. Here are the ones I know for sure.

Has POS Inspection -

Mayfield Heights - Never worked with them, but someone I know has, 100% of all Major repair costs

South Euclid - 100% Escrow of all repair costs. City provides values, you can get them adjusted with a licensed/bonded contractor estimate, but not much

Cleveland Heights - 100% Escrow for all Major repairs costs. Usually ends of being about 75% of total repair costs

Euclid - 50% Escrow of repair costs, and I believe you have to get a licensed contractor to make an estimate which they review.

Shaker Heights - 150% escrow of all repair costs. You have to get a licensed contractor to make an estimate which they review.

Garfield Heights - Not sure on the policy

Doesn't have POS Inspection -

City of Cleveland - $75 POS fee (greasing palms), but no inspection or anything else.

Lyndhurst - No POS what so ever, but you will see higher prices of REO properties because of it.

P.S. - I have heard from investors I know that do many properties in a particular city that the building departments will become more leanient as you build a relationship with them. Less critical on the inspections, adjusting POS escrow values, etc.

[Brandon Turner]

Hey @Mark Lenox welcome to BP! Definitely jump right in the forums.

See you around!