A new OOS investor looking for team-members in Cleveland, OH.

[Sidharta Surya Kusnanto]

Hello folks,

I'm currently looking to purchase my first out of state investment property. And yes, this will be my first rental property purchase ever. I've been researching multiple locales (Springfield IL, Milwaukee WI, Indianapolis GA are the other alternatives) and settled on Cleveland, OH, for my first rental property purchase.

I have the capital to make 3-4 purchases for the next year. My budget is up to $100,000 per house, with 20%-25% down. My current strategy right now is to purchase a property that might require light renovation, as I want to get to know the contractors around the area. After this purchase, I want to use the BRRRR method for the follow-up purchases if I end up with a good team. I have the capital to pay the BRRRR house in cash up to $75,000 and have the do-over capital. The longer-term plan is to eventually partner up with another friend, who's already running his rental properties in Milwaukee and Memphis, into the Cleveland area for more significant capital.


Enough about my strategy, now about myself. I currently work for a tech company in the Bay Area, CA. Most of my capital and equities are in the stock market. I want to diversify and get passive cash flows in real estate. Oh, and I'm also new to Bigger Pockets, been mostly lurking and reading many of the posts around here. I've just finished reading David Greene's Remote Investing book.

Anyway, looking forward to talking with y'all, I hope everyone is keeping safe these days :).

[James Maradits]

Good strategy, but somewhat unrealistic in the current market conditions in Cleveland (and likely in most of the country).

The 75-100k price point is insanely competitive right now with both investors and first time homebuyers alike looking to take advantage of record low interest rates... on top of inventory being extremely low.  Home buyers looking to owner occupy are happy to pay a premium that will price out investors when they are able to borrow money at sub 3% interest with a 3.5% down payment.  Literally every single house I've offered on in the last 6 months has gone into a multiple offers situation within 48 hours of being on market.

Finding a competent and reliable contractor to do a "BRRR" is going to be equally tough due to the market being so hot. I would expect to pay a premium on labor. Additionally, the price of lumber and building materials has skyrocketed since COVID.