Out of State Investors Active in Cleveland, Where Are You From?

Question

If you are an out out of state (or even another part of OH) investor who is actively investing in greater Cleveland tell, where do you live? What was the reason you chose to invest in Cleveland? Are you actively investing in your home area or any other geographical areas?

I'll start. I started investing in Cleveland, OH when I was living in greater Boston, MA because of cost of properties in the greater Boston area were very high to start with and were growing rapidly. I now live in Southwest Florida, but still investing in Cleveland even though you can find better deals in SW FL than in MA. I just like Cleveland :)

Robert Matelski · Answer

Great question Dan! I actually started investing in Cleveland waaaay back in the late 1990s when I was a college student there! It was the beginning of the no-money-down easy-money mortgage era (the application process might as well have been a pulse check), and banks seemed to have no objection to giving an inexperienced 19-year-old a ton of money to buy several 100+ year old houses in rough neighborhoods with just some signatures. Unsurprisingly, I made some major mis-steps, and the whole endeavor ended rather poorly after a few years. But I learned some great lessons along the way.Fast forward a decade or so, to the downturn and real estate crash -- I had relocated to the San Francisco Bay Area a few years prior, and for those first few years found myself lamenting that I could not afford to even get a foot in the door in the local real estate market, where slummy houses in some of the roughest parts of Oakland were selling for $300-400K. What happened from 2008 and onward for the next few years, however, was amazing, as I saw properties selling for 25-50% (or less) of their peak (~2006-2007) values all over the Bay. Alas I had my chance to jump into the market. Though it was still fairly tough to snag decent properties (lots of them were tore up from the floor up, or were short sales that would get lost in the bank shuffle and ultimately never get approved), I managed to get a couple of properties in the East Bay for less than a quarter of their peak value (I still live in one of them -- and it's now worth about 6 times what I paid for it less than a decade ago). By the time I was ready to start looking at buying more properties again, in 2014, I found that the Bay Area prices were soaring and it was harder than ever to get into the market unless you were paying cash and were first in line whenever a new listing came up. But in my endless online searches I realized that Cleveland prices were still lingering in that 25-50% of peak value range in lots of very decent areas at that time, and decided to explore investing in properties there again. It was a market abnormality that seemed ripe for the taking, since Cleveland's economy was showing really strong signs of promise (particularly in healthcare), rising rents, and stability overall (the blue collar exodus that spanned a few decades finally seemed to have subsided). Having learned so much from my college-era investing fiasco, I knew what to avoid, what to look for and how to properly handle things this time around in order to mitigate risk and actually find success with investing in this real estate market. Over the past five years, I've bought properties in Euclid, Bedford, Garfield Heights, Mayfield Heights, Cleveland Heights, and Cleveland proper (North Collinwood neighborhood, near Euclid border) -- all of these properties have been acquired for considerably less than their previous peak values, which were not even unreasonable/inflated to begin with, so I have a fairly high degree of confidence that the values will be back at that level and higher before much longer. Cleveland real estate investing has been an interest of mine for a REALLY long time, and it's something I know a ton about -- I'm passionate about sharing what I've learned through these experiences, and this has even led to me starting an informational unbiased website on Cleveland real estate investing this year, and also a YouTube channel on the topic. Though there aren't as many great deals now as there were a few years back, I challenge anyone to find another major city, with a robust and diverse economy, that can provide such a solid price to rent ratio as Cleveland and still offer some upside potential for price/value recovery/increases!

Dan Sarao · Answer

@Robert Matelski - thats an awesome story, and I agree with your last sentence 100%!Anyone else?