Investing in Old, Large Victorian Homes in Cleveland, Ohio

[Mariama R.]

Hello: I've heard that investing in Large Victorian Homes in Cleveland, Ohio by rehabbing them and renting them out to section 8 tenants generates much positive cashflow. However, how does one generate positive cashflow when one must contend with heating large houses, the upkeep of old and large Victorian Homes and rehabbing them? Also, can an investor guard against houses in C or D neigbhorhoods of Cleveland being vandalized and stripped of valuables, such as the furnaces, electrical wiring, etc. before the house(s) are even rented out to tenants? Is this another cost that must be calculated into cashflow analysis? How does an investor guard against vandalism of properties? Thank you

[Michaela G.]

Personally, I would not suggest to start off with Victorians, especially, if they're for section 8 tenants. 

I have done  major renovation (no such think as basic fix up for a Victorian) on a dozen Historic homes, that had all been bypassed by other investors.

You're dealing with +100 years of various owners patching over problems. You don't know what you get until you start tearing down walls and ceilings. I've done done a rehab under 75K, even if I had thought I'd get away with less. 

A lot of the basic system installations may be more than other homes. Wiring has to be fished through walls, that are often lath and plaster, possibly covered with a layer of sheetrock (or not). HVAC ductwork has to be worked in somewhere. You have crawlspaces, that may be very difficult to access by any plumber that's not skinny ;-). Roofs my have many, many layers of tiles above cedar shakes, which will need total tear-off and decking. And if the building inspector sees the roof open, he may find that the roof joists don't meet today's code (even though the roof survived for +100 years) and may make you add extra support. 

There are always surprises, that you didn't think about. 

So, my suggestion is to not start off with the most difficult type of rehab.