Cleveland, leaving the Army for Education/Investing.

[Joseph Gibbons]

Just left the Army to pursue my degree with the GI BILL and looking at getting a duplex at first and then a few more as funds become available. Heres how I see the first deal looking. I am interested in owning rentals, leverage, property management and long term I would like to do development on a larger scale as in doing my own commercial spaces or large scale residential.

Ive been saving for a few years and just got back from Afghanistan so I want to purchase a duplex and over the next year add unto three. Based on the market for a solid starting point Im looking at around total budget of $40-45k to purchase and rehab a place that puts out about $550 per unit at $1100/month.

I would be paying cash, yearly taxes vary from $1800-$3000/year. I will screen and place tenants personally for the first two years.

So finances in abstract look like this. $45,000 in. (20/25k break down between purchase and rehab.)

$1,100.00x12 = $13,200

$13,200 - (3k tax, 3k maintenance, 1k landlords insurance, 1k misc expenses)

$5,200 gross profit per year. Pays off in 9 years.

Im looking at MLS, craigslist, fannie mae, freddie mac, hud and word of mouth. Any other outlets I should consider? Other advice. I plan to let that first property add up rent for a year while I get another one up to speed and depending on cash flow, cash balance and how solid I am feeling with the tenants I have and the character of the houses I bought (are they sucking more or less money to maintain as I expected?). After a year or two I can use cash and leverage each asset by maybe 50% of appraised value to make a bigger purchase of perhaps a larger multi unit property etc.

[John Ellis]

I too like Lakewood but the taxes in Lakewood are very high and I really do not think the marginal higher rent makes up the difference. Yes property values are higher but if you are interested in cash flow I would look into Westside of Cleveland from about West 125th street and east. The zip code is 44111. It is basically broken into two sections: 125th-149th is less desirable but you can pick homes up for much cheaper and rent is between 400-600 a month depending on bedrooms, upkeep etc. 150th on is a really great spot in Cleveland but mostly SFH. Two of my rentals are in the first section I mentioned and I am really pleased with the amount invested, tenants I have and cash flow. The other section of Cleveland I really like to Old Brooklyn for the same reasons above.