New Investor Seeking Insights on the Cleveland Market

[Dzung Doan]

Hello BiggerPockets Community,

I hope this message finds you all in good spirits. My name is Dzung Doan, and I am new to the world of real estate investing, specifically in the buy-and-hold strategy for rental properties. I have a starting capital of between $35K-$50K and can additionally save between $3K-$5K monthly for further investments. I'm also planning to utilize conventional loans (30-year mortgage with 20-25% down payment) to finance these investments.

My goal is to keep my investment journey as passive as possible, focusing on markets and properties that can offer consistent cash flow with minimum hands-on management. At this point, Cleveland, Ohio, has piqued my interest due to its stable economy, affordability, and favorable rent-to-price ratios, and I'm considering it as a potential market for my first investment property.

As a newbie starting out, I am keen on hearing from experienced investors, particularly those who have invested in the Cleveland market from out-of-state. I am eager to understand:

1. The nuances of different neighborhoods and their respective investment potentials
2. The challenges and rewards you've encountered in this market
3. Your experiences with local teams (agents, property managers, contractors, etc.) you've worked with
4. Any key lessons learned and strategies that have worked well for you

I would also greatly appreciate insights on potential pitfalls or critical issues I should be aware of as I consider investing in this market.

My ultimate aim is to make an informed decision and hopefully start a rewarding journey in real estate investing. I am open to all advice and suggestions and am looking forward to engaging in insightful discussions with you all.

Thank you in advance for your time and for sharing your experiences.

Best regards,

Dzung Doan.

[Joshua Janus]

Quote from @Dzung Doan:

Hello BiggerPockets Community,

I hope this message finds you all in good spirits. My name is Dzung Doan, and I am new to the world of real estate investing, specifically in the buy-and-hold strategy for rental properties. I have a starting capital of between $35K-$50K and can additionally save between $3K-$5K monthly for further investments. I'm also planning to utilize conventional loans (30-year mortgage with 20-25% down payment) to finance these investments.

My goal is to keep my investment journey as passive as possible, focusing on markets and properties that can offer consistent cash flow with minimum hands-on management. At this point, Cleveland, Ohio, has piqued my interest due to its stable economy, affordability, and favorable rent-to-price ratios, and I'm considering it as a potential market for my first investment property.

As a newbie starting out, I am keen on hearing from experienced investors, particularly those who have invested in the Cleveland market from out-of-state. I am eager to understand:

1. The nuances of different neighborhoods and their respective investment potentials
2. The challenges and rewards you've encountered in this market
3. Your experiences with local teams (agents, property managers, contractors, etc.) you've worked with
4. Any key lessons learned and strategies that have worked well for you

I would also greatly appreciate insights on potential pitfalls or critical issues I should be aware of as I consider investing in this market.

My ultimate aim is to make an informed decision and hopefully start a rewarding journey in real estate investing. I am open to all advice and suggestions and am looking forward to engaging in insightful discussions with you all.

Thank you in advance for your time and for sharing your experiences.

Best regards,

Dzung Doan.

Cleveland, Ohio is a great market to focus on for cash flow and specific pockets have gone up 2x and upwards of 4x in the last 5-10 years even!

Examples:

44109 (median home price went from roughly 50k to 125k in 8 years)

https://www.zillow.com/home-values/77009/cleveland-oh-44109/

44102 (median home price went from roughly 30k to 120k in 8 years)

https://www.zillow.com/home-values/77002/cleveland-oh-44102/

44106 (median home price went from roughly 100k to 200k in 8 years)

https://www.zillow.com/home-values/77006/cleveland-oh-44106/

It has the highest rents on average in all of Ohio for major cities and the median income is not even in the top 3. That creates a really nice price / rent ratio which is favorable for investors looking for cash flow. The median home price is also very low nationwide which creates a low barrier to entry. You can get solid cash-flowing single families in the 90-120k price range and duplexes in the 130-180k price range. There are cheaper one’s in D/F areas but I would be careful as those can create a laundry list of additional issues. In 2022 the rents increased 12.1% year over year which was the 3rd highest in the entire country per https://www.axios.com/local/cleveland/2023/02/14/cleveland-rent-prices.

Here are pockets I focus on for cash flow:

West side - West boulevard, Cudell, Clark-Fulton, Jefferson, Bellaire-Puritas, Old Brooklyn

East side - Fairfax, Buckeye-Shaker (the north side), Waterloo Arts District, Garfield Heights, Maple Heights, Newburgh Heights, Lee-Miles (the north side), Bedford

Here are the areas that I focus on for appreciation:

West side - Lakewood, Edgewater, Old Brooklyn, Ohio City, Tremont (above 490)

East side - Buckeye-Shaker (the north side), Waterloo Arts District, Fairfax

I have a graded neighborhood map of these areas as well if you would like to check it out.