Almost in escrow on a house in Cleveland. Would like input.

[Ryan Rock]

I am in the final stages of negotiations on a house in Cleveland. I have owned many rentals in California, but since I reached the conclusion that my beloved state is not the best place to invest at the moment, I started to look for opportunities in different states. My first idea was to find a sf property close to a university and rent it room by room to students. With that working premise I began to narrow my search to 4+ bedrooms, less than 20 years old and less than 1 mile from a university. I may have found the only 10 homes in the country that fit that description for under $150k. 

I became fascinated with Ohio, but while searching there I decided to consider unmarrying from the student rental. Anyway, the property I am about to buy is 2262 E 73rd Street, Cleveland. A few things I like about this property are that it is 20 years old, has a legal basement making it a 5 bedroom, and it is currently being rented room by room.  The current landlord does not allow pets, also a plus.

With 5 bedrooms available, 70% occupancy, and $400 per, I only get a cap rate of 6%. That's with $250/month toward maintenance and $200 pm. Hopefully I can beat the occupancy, room rent and maintenance, if not the pm.

We have agreed on $128.5k. The AC needs a $3000 repair. I will be paying cash.

There are currently two tenants paying $400/month each. The seller has offered to place a 3rd during escrow, but I declined. I want to vacate the basement, which currently has one of the tenants, and put in a door to the outside. Then I would like to make this an abnb apartment. In my view there are needs for strs in nearly every area. I won't be shooting for a sky high occupancy, just enough to net more than the $5-600 I could get with a longer term tenant.

If anyone wants to evaluate my idea I'd appreciate it.

Ryan