Long Distance BRRR'ing in Cleveland/Columbus

[Joseph Catalino]

Hello BP, I am wondering if any of you have done BRRR deals in Cleveland or Columbus Ohio while living out of state? If so, I'd love to hear opinions/advice/etc on the matter. Also, if anyone in Cleveland or Columbus works with out of state investors on BRRR projects, I'd love to chat more about it. Thanks, I super appreciate any insight.

[Kristopher Hanks]

@Dan Marzec @Joseph Catalino I will give out the basics in this post. I can talk over PM to give out more in depth details. 

I found a house in the 44120 zip code on 146th Street. It was owned by an exhausted Australian investor. The last tenant destroyed the place, poor property manager. There were roaches all over the place and no one wanted to touch the property. I saw that it had been on Trulia for over 180 days. It piqued my interest because I am not afraid to handle a project. I ran the numbers twice and decided on an opening offer that completely offended the Seller's Agent. So I knew I started with the perfect opening offer. I told both my agent and the seller's agent to present the offer or I would report the seller's agent for not doing his job. I put in an inspection clause and went and looked at the property. I then told the seller's agent to get a counter from his client, I have cash and I am a serious buyer. We ultimately made a deal when the owner sent his counter. This was my third rental in the City of Cleveland. There are still many opportunities there and I will buy more when I can. 

3 bed 1 bath ranch style built in 1960 with 2 car detached garage.

Quick look at the numbers:

House listed for: $15,000

I offered: $8,000

Purchase price: $12,500

Low end remodel, rental grade materials: $13,500

All in cost was: $28,500 includes closing fees

ARV: $35,000

Rented for: $725 per month

CapEx/Vac/Repairs: $108.75 per month

Insurance: $70.61 per month

Property taxes: $54 per month

Property manager: $50.75 per month

50% rule: $362.50 per month

2% rule: 2.54% per month

Monthly cash flow: $440.89

20 year hold estimated gross profit between: $115,000 to $120,000 conservatively 

I forgot to add in the City of Cleveland's annual rental registration fee of $35 per unit.