Real Estate Investing in Cleveland, OH
New to Real Estate · Leonia, NJ · Member since 2019 · 30 posts · 3 votes
I've been speaking with family members regarding buy and hold strategies and Cleveland, OH has come up a few times (they are not from the area). Can BPers who have invested in or have first hand knowledge (second hand can work as well...) give any advice on investing in Cleveland, OH? What are the places that are are poised for growth (and merit investment), areas that are already up and coming, and areas that are considered hot markets? What areas are probably not ideal for a newbie investor? And is buy and hold a sensible strategy for the Cleveland market or is fix 'n' flip a better angle? Thanks!
@Guillermo Kennedy I have been doing business out there for about 10 years, the last 5, 7 years flipping about 500 props . We used to provide 25- 30% net caps, now 10- 14% as pricing has increased. Its all about your team . If I tell you where, what good is that going to do ? All you are going to do is sit on the internet , waste of time. You do not live there , you do not have a team to do what is needed. Most researches things to death and do nothing .
@Guillermo Kennedy - two questions to start:
1) Would this be your first real estate investment? If no, where do you currently have properties?
2) Are you looking to join capital with family?
Regarding Cleveland I've been investing there for the past 2.5 years (currently at 28 units). Compared to our other portfolios I prefer Cleveland based on the yield, ability to operate, great selection across classes (A-F), changing national reputation, price points, and the fact that I simply like going there (I live in Boston).
From a location standpoint our investments (small multi-family) are in Edgewater, Ohio City, Newburgh Heights, and East Cleveland. Each area has their pros and cons so it depends on your strategy. We are buy and hold investors, not fix and flip. My view is that you should decide on a strategy first as they are two different business models.
The best way to get familiar with any area is to get on a plane and go see for yourself - I cannot recommend this enough.
PM me if you have any other questions - happy to help.
JC
@Guillermo Kennedy I have been doing business out there for about 10 years, the last 5, 7 years flipping about 500 props . We used to provide 25- 30% net caps, now 10- 14% as pricing has increased. Its all about your team . If I tell you where, what good is that going to do ? All you are going to do is sit on the internet , waste of time. You do not live there , you do not have a team to do what is needed. Most researches things to death and do nothing .
I've been speaking with family members regarding buy and hold strategies and Cleveland, OH has come up a few times (they are not from the area). Can BPers who have invested in or have first hand knowledge (second hand can work as well...) give any advice on investing in Cleveland, OH? What are the places that are are poised for growth (and merit investment), areas that are already up and coming, and areas that are considered hot markets? What areas are probably not ideal for a newbie investor? And is buy and hold a sensible strategy for the Cleveland market or is fix 'n' flip a better angle? Thanks!
Cleveland is a great place to invest. I would stick to the more stable suburbs where cash-flow is steady.
I've been speaking with family members regarding buy and hold strategies and Cleveland, OH has come up a few times (they are not from the area). Can BPers who have invested in or have first hand knowledge (second hand can work as well...) give any advice on investing in Cleveland, OH? What are the places that are are poised for growth (and merit investment), areas that are already up and coming, and areas that are considered hot markets? What areas are probably not ideal for a newbie investor? And is buy and hold a sensible strategy for the Cleveland market or is fix 'n' flip a better angle? Thanks!
Only place you should fix n flip is your hometown. Going out of state has more risk as presumably you've got the following working against you.
As for rentals that's a bit more passive as your Property Management team can handle a lot of the workload. Saw Cleveland's on your short list so I figured you'd get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. In addition, there are tons of other turnkey markets out there besides Cleveland. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors
Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.
One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.
Thanks James
Buy Quality for your first buy and hold, not just numbers. I prefer to take dependable stable rents over high rents that aren't guaranteed next month before of the neighborhood. Don't try to bite off more than you can take on.
A SFR is a good way to start. Pass on Water and Sewer onto the tenants to minimize your costs.
WOW! This is why I LOVE the BP community! The responses are awesome, informative, and greatly appreciated!
@Account Closed For me, this would be a reintroduction into real estate investing. My first foray didn't end as successfully as I would have liked, however, was definitely a learning experience (my BP bio has a high level walkthrough of my initial experience with real estate investing). The family members involved are more seasoned than I and within that group some moreso than others. And yes, we are looking to combine capital along with hard money (or private) to acquire property(ies). Our main focus is the BRRRR strategy, however, the rehab and refinance appears to be an issue. Looking to secure funds from a bank or HML on a property of $30k or less seems to be quite the challenge. If you have any advice/information/recommendations on this I would love to hear it!
Jeff (can I call you Jeff?), would definitely love to touch base with you. First and foremost you are from Boston (New Englanders are awesome!) and second am very impressed with you and your family's acquisition (and I would imagine successful management) of 28 units in 2.5 years! That is quite an achievement! Very interested in hearing how you achieved this.
@Bob Prisco Well, if this statement isn't like a double espresso shot in the morning to get you up and going I don't know what is! Motivation style is different but I get it, I get it! Appreciate the virtual kick in the pants! I see you have a lot of experience in Cleveland, OH RE market. Your statement holds true - a team is needed to be successful in Cleveland, OH or any market for that matter. Will definitely keep your name on my shortlist as someone I should speak with as we will need seasoned veterans to help us navigate this market.
@Tom Ott Thanks for pin pointing the type of area we should invest in - it definitely helps to lockdown the type of area you should invest in. Helps to focus our efforts. I see that you raise equity and provide turnkey properties as well. Could you elaborate as to what areas you do this in and a little bit about both (I've read about both but never turn down the opportunity to hear from someone who actually does it - may learn something new!)?
@James Wise Talk about drinking from a fire hose!!! WOW! You provided a ton of information - THANK YOU! That is awesome! I also got a chance to check out your youtube channel which has a ton of great information and videos. You are one gutsy guy, fashioned out of brass they are - new sub!
@Carl Zingle Thanks for thanking James?
@Federico Gutierrez Appreciate that information. When starting out, many (including me) want to get in and secure as many doors as possible within a short time period (fell into that trap my 1st time I got into real estate and paid DEARLY for it!) to leave current job, secure financial freedom faster, bragging rights, prove something to ourselves or even others. In some cases, quality over quantity is the way to go. And SFR with sewage and water costs passed onto tenants - got it! Is this standard language on a normal lease agreement in Cleveland is will this language have to be added to lease? Also, is this the norm for Cleveland tenants to pay sewer and water costs?
Thank you all for this information - this is why I LOVE BP!!! An awesome, highly knowledgeable, and open community willing to share information and provide guidance to all who ask. Hopefully, no one will object to me reaching out in the near future with questions?
Stay awesome, folks!
Cleveland is a great place to invest. I just recently got my real estate license and am going to start soon!
Thanks to everyone, I had just finished with James post and I was thanking for the list that he provided.