What are your thoughts on investing in the Cleveland area?

[JC Chavez]

I have been considering a few multi-family and commercial properties in the Cleveland metro area. I initially was excited with the thought of OOS investing in this region due to relatively low cost acquisition, better CAP rate & NOI, and better cash flow. However after further research, I have become hesitant pulling trigger. Some of the concerning factors include relatively high crime(according to crimegrade.org), poor job growth, poor appreciation, moderate to high vacancy, etc.

I am not sure if I am to the point of analysis paralysis and just finding excuses to support a thesis of "this just won't work", or if others have similar concerns with the Cleveland area in terms of future growth, stagnant appreciation, and high risk. I know there are great parts of Cleveland, but I am talking more about the Metro area before you get out to the nice suburbs. I would love to hear from those who have better insight and knowledge of the area than I do. I would also be interested in hearing your success or horror stories with projects/properties you've invested in. And if you have a totally different perspective, I would love to hear that as well. 

[Lane Kawaoka]

Population is down. I did a syndication out there but it was in the downtown area. I am a little wary of the suburbs.

[Allen McGlashing]

One big concern in Cleveland would be the appreciation factor. You have homes that are selling for less then they were bought back 10,20,30 years ago. Cashflow might be OK, but appreciation in Cleveland doesn’t look promising. 

[Michael Magno]

Hi JC, we should talk.  I sent you a message.  

[James Wise]

Originally posted by @JC Chavez:

I have been considering a few multi-family and commercial properties in the Cleveland metro area. I initially was excited with the thought of OOS investing in this region due to relatively low cost acquisition, better CAP rate & NOI, and better cash flow. However after further research, I have become hesitant pulling trigger. Some of the concerning factors include relatively high crime(according to crimegrade.org), poor job growth, poor appreciation, moderate to high vacancy, etc.

I am not sure if I am to the point of analysis paralysis and just finding excuses to support a thesis of "this just won't work", or if others have similar concerns with the Cleveland area in terms of future growth, stagnant appreciation, and high risk. I know there are great parts of Cleveland, but I am talking more about the Metro area before you get out to the nice suburbs. I would love to hear from those who have better insight and knowledge of the area than I do. I would also be interested in hearing your success or horror stories with projects/properties you've invested in. And if you have a totally different perspective, I would love to hear that as well. 

 The city of Cleveland itself dude, whole bunch of crime and poor people. That's what you get if you're investing in Cleveland. It's low income housing in high crime rates. Now the level of risk and crime will of course vary by neighborhood so you've got to balance out the level of risk you want to take on in exchange for the amount of money you are willing to pay for a property. If you have not yet seen it you'll want to read The Ultimate Guide to Grading Cleveland Neighborhoods for a complete break down on the Cleveland market.

[Brandon Sturgill]

@JC Chavez you can do perfectly fine in Cleveland as long as you have your team in place...if you are buying $50k properties, prepare for some heartburn...if you are realistic on your purchase prices and ROI, you can find a deal that meets your needs for less than almost any other city in Ohio. Every market has risk...I would ask some fundamental questions on long-term outlook of wherever you end up....

Best of luck

[Michael Swan]

I primarily invest and hold approximately 200 front doors in Lake County (Painesville 106 front doors and Mentor 57 front doors) and Akron (24 front doors). They have been very very good to me. All apartment complexes I purchased from 2015-2019. Refinancing a few and taking out tons of cash!! Plus, my 57 Unit complex in Mentor is approaching 5.5 million valuation based on NOI and current sales etc.. same product, same quality. I purchased that 57 unit in August of 2019 for $2,000,000. I have put in about $250,000 to stabalize and reposition so far. I will most likely wait to leave about 25% meat on the bone for a new investor and sell in 2022 some time.

Just retired this last school year from my teaching job and only work on the RE business a few hours a day!!

Feel free to reach out to me for guidance and advice.  I am not a RE agent, commercial Broker etc… just simply an investor in the area you are looking to possibly invest!!

I was featured on BiggerPockets 238 Podcast and told my story how I got started and this is how far I have come now!!  It is sooooooo exciting!! If lowly paid Parochial School teacher can do this, so can you!!

Swanny

[Bernardino Graziano]

@Allen McGlashing

I wish houses in Cleveland and suburbs were selling for less than people paid 30 years ago!!! I don’t understand where you came up with this fact.

[Allen McGlashing]

@Bernardino Graziano

I’ve been digging heavily into the Cleveland market. I have seen tons of homes with a current selling price that is lower than the previous sold price. Check the previous buy/sell history on some of the houses I’m sure you’ll find some.

[Bernardino Graziano]

@Allen McGlashing

Buying and selling real estate is how I make some of my living. Saying that properties are selling for less than what they sold 30 years ago is wrong. Cleveland doesn’t get the appreciation that some other cities do but nonetheless appreciation is up unless we are talking about East Cleveland which is not part of Cleveland.

[James Wise]

Originally posted by @Bernardino Graziano:

@Allen McGlashing

Buying and selling real estate is how I make some of my living. Saying that properties are selling for less than what they sold 30 years ago is wrong. Cleveland doesn’t get the appreciation that some other cities do but nonetheless appreciation is up unless we are talking about East Cleveland which is not part of Cleveland.

 Yea, agreed. The notion that 2021 pricing in the market is LOWER than 1991 pricing is complete fiction.

[Allen McGlashing]

@James Wise

How is the appreciation in the Cleveland market? I haven’t seen a lot of growth when I research property. I follow your grading Cleveland guide heavily. I was also advised that if I was looking for appreciation Cleveland probably isn’t that market, but cashflow is good. 

[Jeff He]

@JC Chavez

It's good for cash flow. I'm not betting on appreciation, but based off of recent sales, I've definitely seen buyers pay more than the sellers did a few years ago.

[Jason Simon]

@Michael Swan have you invested in the Cleveland suburban market?

[Michael Swan]

Hi@Jason Simon

We got out of our Cleveland Heights, Shaker Heights, and Euclid apartments.  Lake County was very landlord friendly comparatively in all aspects!!

Swanny

[James Wise]

Originally posted by @Allen McGlashing:

@James Wise

How is the appreciation in the Cleveland market? I haven’t seen a lot of growth when I research property. I follow your grading Cleveland guide heavily. I was also advised that if I was looking for appreciation Cleveland probably isn’t that market, but cashflow is good. 

Well this is what the last 10 years of data looks like in the 5 counties I operate in

As you can see it's been trending upward substantially. Although that's no major feat considering we came out of the great recession during this time. To take a even wider look at things we can take a look at the entire Midwest region since 1965 and we see consistent gains.

Narrowing things back down again the average sales price of a house in Ohio in 1990 was $62,900. It was $103,700 in 2000 and it was $212,517.

[Jason Simon]

@Michael Swan: appreciate the advice! I’m staring to look in those areas.

[Steven Foster Wilson]

This is all you need to know about the great city of Cleveland 

Cleveland Promo Video

[Michael Orlando]

Hey dude!

I, like @Michael Swan, have had good luck in buying apartments here with my partner and investors. We see higher COC returns than many parts of the country, high occupancy, and solid rents. I just started in real estate a year and a half ago and have about 200 doors as well and so far we've been very happy we haven't gone elsewhere in terms of a market.

Happy to chat and offer any insight if you'd like, just let me know!

[Michael Swan]

Hi@Jason Simon,

Feel free to message me.  I love this stuff.  I told my story how I started investing there in the Cleveland area on Podcast 238 too if you want some background on me too.

Swanny

[Michael Swan]

Hi@Steven Foster Wilson

I am sorry that you have not benefited as an investor only in my areas I invest in.  

I see you are a broker in Columbus. To each his own I say.  At the moment Columbus is one of those sexy areas many many people are overpaying for.  

I Only take advice from people that have been down the road I am wishing to travel.  You should stick to Columbus if that is your niche and comment on things you know about and have personally invested in.  Your generic bash on Cleveland, while humorous (video) in misinformed and has sweeping generalizations, slanted language and is full of Bias regarding all areas of Cleveland and the suburbs. Educated people see past that nonsense.

I am not a broker and have nothing to sell when I post advice here on BP.  I have been doing that since I became financially free investing in Lake County about  40 minutes east of Cleveland.  

In 2017 I was on BP Podcast 238, front cover of their Wealth Magazine and featured in their 1st chapter of their fabulous book by Josh and Brandon called How to invest in Real Estate, the ultimate beginner’s guide and have been giving free advice before that and after that to help many people on their way to be financially free too at no charge!! Paying it forward is very important!!  It comes back to you ten fold I have found.

Have a great one BP Nation!!

Swanny

[Steven Foster Wilson]

Originally posted by @Michael Swan:

Hi@Steven Foster Wilson

I am sorry that you have not benefited as an investor only in my areas I invest in.  

I see you are a broker in Columbus. To each his own I say.  At the moment Columbus is one of those sexy areas many many people are overpaying for.  

I Only take advice from people that have been down the road I am wishing to travel.  You should stick to Columbus if that is your niche and comment on things you know about and have personally invested in.  Your generic bash on Cleveland, while humorous (video) in misinformed and has sweeping generalizations, slanted language and is full of Bias regarding all areas of Cleveland and the suburbs. Educated people see past that nonsense.

I am not a broker and have nothing to sell when I post advice here on BP.  I have been doing that since I became financially free investing in Lake County about  40 minutes east of Cleveland.  

In 2017 I was on BP Podcast 238, front cover of their Wealth Magazine and featured in their 1st chapter of their fabulous book by Josh and Brandon called How to invest in Real Estate, the ultimate beginner’s guide and have been giving free advice before that and after that to help many people on their way to be financially free too at no charge!! Paying it forward is very important!!  It comes back to you ten fold I have found.

Have a great one BP Nation!!

Swanny

Its a joke, take it easy. In all reality, Cleveland has alot of potential to offer investors including high cash flow and in certain areas high appreciation. Really all over Ohio we're seeing massive growth and alot of companies setting up shop to offer their employees affordability and the nice "midwestern" life.

[Michael Swan]

Hi@Steven Foster Wilson

Yes.  I saw the humor.  Thank you for clarifying and not just trashing Cleveland.

Swanny

[Jennifer Soltis]

I live in Lake County, which is east of Cleveland. Lake county is a very good area and I am now starting to purchase for the long term. I have been "flipping" for several years now but realizing the need of depreciation and a continuous stream of cash flow. SFH to cash flow $500 a month in nice areas and if they appreciate over the next 10-20 years that will be a bonus. But no appreciation in the greater cleveland area.

[Michael Swan]

@Jennifer Soltis

I would love to talk to you.  I have so much in Painesville.  Please send me a message.

Swanny

[Joe S.]

Originally posted by @Michael Orlando:

Hey dude!

I, like @Michael Swan, have had good luck in buying apartments here with my partner and investors. We see higher COC returns than many parts of the country, high occupancy, and solid rents. I just started in real estate a year and a half ago and have about 200 doors as well and so far we've been very happy we haven't gone elsewhere in terms of a market.

Happy to chat and offer any insight if you'd like, just let me know!

 You have 200 units personally Or is it you and your partners and your investors?