What’s happening in the Cleveland real estate market?

[Thomas Staub]

Anyone have any insight on the things happening in Cleveland? Set for doom or on the rebound?

[Jeff Brower]

I would like to weigh in a little here. I live on an east side suburb about 20 minutes from downtown Cleveland. I have worked with a buyer from out of state, he purchased a nice SFR (down the street from my home) for 80k, no repairs, and is getting 1k in rent. Decent, safe, good schools, hardly any crime, good blue collar suburb. Was an MLS deal. Not a slam dunk on paper, but when I hear about out of towners looking at SFR's under 30k and duplexes under 50k, I cringe a little inside. Sure, on paper, these deals pencil out great. But the reality is the tenant base that is looking to rent (generally speaking) in these area's require a lot more management. What is the turnover cost going to be? Vacancy due to improvements needed when someone trashes the place? Do you know good contractors to do this work when it needs it? How long will a home built in 1920 last and what will the capex be if intending to hold for a while?

I am all for folks looking to invest here in Cleveland, just be wary of the class of property you are looking to purchase. Some deals are too good to be true, especially if you are not local. I would advise to find some other out of state investors who have gone through a couple of years buying and holding here, and getting their numbers and thoughts prior to jumping in. There are many posts here on BP from folks that have done this. I don't mean to be a Debbie downer, I just know some places where I would never buy are sometimes mentioned on BP as being up and coming. Of course, I have a policy that I would never buy in a place where I wouldn't be comfortable living myself, and I know this is a different mentality than many others. Its overly cautious, but that's how I view things.