Are these prices for real on Cleveland

[Paul W.]

I just looked at a property at 14308 Lakeshore Dr in Cleveland. It's a 17 unit brick building for 255k, with a cap rate of 24%. It looks nice from the few pictures. In the Phoenix area that would cost over a million and that's on the low end. Even if there is a 10 percent vacancy rate AND there is a significant CAPEX, your gone be making enormous cash flow with 20% down. I obviously don't know the local market there but I'm curious how these deals are even available and why local real estate investors aren't gobbling them up.

[Jayson Lesyk]

Hello @Paul W.!

I am a newbie future investor that does not currently own property but I have been a Clevelander for 25 years. I have lived and rented in some of the most affluential A neighborhoods (Beachwood 44122, Moreland Hills 44022) some mid grade C neighborhoods (Maple Heights, 44137) and some absolute warzone F neighborhoods (Crestwood Avenue, Cleveland 44104 - for an accurate idea). In that F neighborhood I have literally heard gunshots every night for nearly a month, seen people conduct drug deals and advertise/offer drugs in broad daylight, gamble in the middle of the street (again in broad daylight), children younger than high school age running the streets truant, endless fighting and domestic violence, etc.... you get the picture. This was only about a mile up the street from a very historic artsy and 'boutique' block called Larchmere Blvd. Expensive condos (Larchmere Court) and trendy restaurants (Felice Urban Cafe) are right at home next to some very rough side streets. Only about another half mile or so up the road are lavish homes, a few exceeding the 500k mark. The point I want to illustrate is that Cleveland is an incredibly diverse city with its own geography. Like @James Maradits mentioned, the property you're looking at is right up the street from the Beechland Ballroom and a somewhat artsy area. I am still learning and educating myself, so I don't feel comfortable enough to offer a properly informed and appropriate opinion on your particular property. However, I would recommend you definitely coordinate with someone deeply and intimately knowledgable in our city's different areas, suburbs, and demographics. I would further urge you to find someone focused on either the east or west side of the city as they are very different in their demographics, 'sub-cultures', and neighborhoods/communities! Hopefully I offered some insight to you. If you are more interested in my own experience in a low income/violent/F Cleveland neighborhood feel free to PM me!

Hopefully someone here might work with or invest themselves in East Cleveland that can offer you greater advice and information? And if I misspoke as to the representation to our city and 'market', please someone correct me! I'm new here just trying to help in any way I can.