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Updated almost 7 years ago on . Most recent reply

User Stats

98
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19
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Jon Passow
  • Rental Property Investor
  • Cleveland, OH
19
Votes |
98
Posts

Cutting Teeth in REI- CLE vs Elsewhere- Need Opinions

Jon Passow
  • Rental Property Investor
  • Cleveland, OH
Posted

Just thinking out loud here and bouncing some ideas around. Would love to know what everyone thinks. I live in NorCal and buying local is not a viable nor smart option. So I've been planning on purchasing out of state. Originally I was looking at Kansas City, MO, but after reading a few books and thinking about it more, I'm considering doing my BRRR strategy in my hometown of Cleveland, Ohio to cut my teeth in REI before diversifying into other markets!

Know, I know that Cleveland has had a declining population for a while, has no major industry but here's my thoughts. I'm from the area and I know all the neighbor hoods, history and am passionate about CLE. While it doesn't have industry, it has the best Hospital in America (Cleveland Clinic), a new Amazon Center is being built there, an up and coming food and beer scene (two of the top 50 breweries in the world are in CLE), and loads of other scenes (art, music, etc) that gives the sense that Cleveland is doing what Pittsburgh did and is making a come back. It's a sellers market there and I feel like buying now is like getting in on the ground floor. Plus the 5% vacancy rate doesn't seem too bad to me.

I have a lot of contacts there already so I'd have people to check on rentals if I needed it, sources for finding contractors (my cousin owns his own construction business and could refer me to a good company) and other team members. If I need to travel to check on rentals or do business, it's my hometown so I can visit friends and write that off as a business trip. Seems like a win win to me.

If I went into another market first, I feel like it would be doable but a slightly more uphill battle. Thoughts?

Most Popular Reply

User Stats

186
Posts
165
Votes
Don Petrasek
  • Real Estate Agent
  • Westlake, OH
165
Votes |
186
Posts
Don Petrasek
  • Real Estate Agent
  • Westlake, OH
Replied

@Jon Passow healthcare is an industry......Cleveland not only has the Cleveland Clinic but also University Hospitals which is a nationally renowned teaching hospital. There is a significant presence of healthcare related companies in the area (and growing).  There is also still a decent small specialty manufacturing base that is not going away due to 2nd or 3rd generation owners who grew up here.  We also have strong financial services (banking and insurance) employers - Key Bank and Progressive Insurance are based here to name just 2.  

The rental market here is very strong.  I rented my Lakewood double in two weeks last December (worst month here due to weather) and had my pick from 4-5 very strong candidates.  We are just finishing getting a single family in Cleveland ready for rent.   Yesterday while we were there, we had 2 neighbors knock on the door saying they had friends or relatives who were looking for a rental + one guy from down the street who wanted to buy it (in the course of about an hour and a half).  We're raising the rent about 6% (over last years raise) and may go even higher.....no doubt it will rent in a few days, there's no inventory.  

Having friends and family here to help is key.  That makes market choice a no brainer to me.   Good luck, let me know if I can help in any way.

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