Apartment building in Cleveland, OH

[Ron Steckly]

http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=18252177&SRID=3730594653&StepID=101

Property is $434K and has assumable loan with city for $104K.

What's interesting is the program that guarantees the rent.

What do people think of this deal? Any experience with this program?

[Marc Ramsay]

I have been through this building and looked at the paperwork. One thing I could not get a confirmation on is whether or not the HAP contract would survive the sale, or if you would be stuck with having to get CMHA Section 8 vouchers for every tenant in the building. The building is not LIHTC as far as I remember, just 100% HAP. There is also a fair bit of deferred maintenance, and I needed to get more info on the commercial spaces and their leases. One of the commercial spaces is used by the current owner and I believe they were going to sign a long lease to retain the space.

As for the area, I think it is moving up. There are some long term tenants in the area, and a couple of blocks away is a large brand new set of retail and professional complexes on Broadway. I wouldn't write the area off by any means.

If you are seriously interested in the property, I would confirm the HAP contract status on sale, get a good handle on the deferred maintenance and rehab costs, confirm the status of the commercial leases, and run your numbers. I am still considering this building but have had some other priorities. If you get it, make sure you find a property manager with lots of experience in HAP properties.

The building and the area have some cool history. The old theater lobby is still there, but it's been gutted. Could be used for a really trendy commercial space.

Good luck!