First-time Investor: Out of State (unseen)

[Account Closed]

Hi BP community, 

I have been looking at properties within the $20,000-$30,000 range in Cleveland to do a flip. Alternatively, to rehab then STR or MTR. I prefer a flip first to make $ to do my first buy and hold. I have come across a few properties online and I am talking to agents but given that I have no experience, does anyone have advice on how to get started in OOS investing/flipping, gut rehabbing, finding a trustworthy contractor in Cleveland etc.

[Bonnie Low]

Be very VERY careful buying a propety in this price range in a city like Cleveland. I'm personally a fan of Cleveland (Go Browns!) and have spent a lot of time researching this market as well as Toledo, but at this price point I can almost guarantee you're going to run into a LOT of problems. Here are a few of them:

- very dilapidating properties needing a lot of cash to repair

- property will have a hard time appraising for what you put into it

- you're going to have difficulty finding contractors willing to work in these neighborhoods due to crime and vandalism

- same as above with Realtors and Property Managers (as told to me by both)

- difficulty finding an end buyer for your flip

- tenant pool can be unreliable meaning higher turnovers and/or vacancies

- even if you fix up your property there are likely to be many boarded up, vacant homes in the area - definitely a no-go for STR or MTR

Bottom line, if you're going to invest in a major city like Cleveland at this price point you need to be willing to go there and see the neighborhood yourself. Do NOT take someone else's word for it. And checking Google Maps for neighborhood views can be risky, too, as it can be months to years outdated.

If you really only have that much to work with and like the idea of doing a flip, I'd look into a smaller town somewhere in the midwest like Iowa or Indiana (not joking) where you may be able to find something in a peaceful if not boring (i.e. safe) area. There are well known folks doing this with success.