Advice on University Heights, Cleveland single family property

[Alana Nevares]

Hi,

My husband and I have a long hours occupation while on mid thirties and have no investments yet. 

About one year ago I discovered bigger pockets and ever since have been listening to their podcasts. About one month ago we decided to take action. We did not want a fixer upper due to fear, lack of time and experience. 

We found a single family home (nothing fancy), in University Heights, Cleveland, sold POS violation free and will need minor repairs. we do know we may need a new roof and furnace in the next few years. Purchasing price is 87,500 with 1,700 back for closing. 

Potential rent: 1150-1200

400 Mortgage

300 taxes

120 management company

50 insurance

15 renters occupancy fee.

We wanted a safe neighborhood with low turnover, however, taxes are overwhelming and if we are lucky we will cashflow 200 monthly. Was this a bad deal?

Any advise as to where to invest next?....Was thinking about duplex (but most of them are built in 1920s in the area)….Would a fixer upper be better even long distance?

Thanks for your thoughts, somewhat discouraged at this point.

[Brian M.]

@Alana Nevares 

Hi Alana - I almost purchased a property in UH but had second thoughts and nixed the deal due to the taxes.  It's too bad that the tax rates are so high in certain areas of Cleveland.  They are prohibitive in many ways and I feel that it negatively impacts revitalizing many areas.

Your investment is not good from a cash flow perspective, but the positive is that your tenants are paying your mortgage and you should reap positive appreciation over the long haul.  Cleveland and its surrounds can be a good place to invest but I would look for areas that have a lower tax rate than University Heights - unless the deal is too good to pass up.