Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 10 years ago on . Most recent reply

User Stats

52
Posts
6
Votes
Sameer M.
  • New York City, NY
6
Votes |
52
Posts

Cleveland Suburb SFR analysis

Sameer M.
  • New York City, NY
Posted

Hello friends

So I am all set to close on my first rental. This one is a 1935 built 2 story 3/2.5 recently updated (roof, paint, windows, electrical etc). The area is Wickliffe. A safe suburb with good (6, 7) schools. A mix of blue and white collar family neighbourhood.

Price: 78200 (Zestimate is 110K. County valuation 86K last year. Appraisal yet to come).

Rehab: 2700

Expected Rent: 1000 (Rentometer and conservative that the PMs estimate)

PM: 10% + half months rent

Expected CapEx in next 10 years: HVAC. Partial plumbing update. Electrical in the basement. Water heater.

Any feedback on this deal is welcome. Although I am into closing good feedback is always encouraging :) and bad feedback will keep me be real.

Thanks

Most Popular Reply

User Stats

400
Posts
223
Votes
Christian Carson
  • Cleveland, OH
223
Votes |
400
Posts
Christian Carson
  • Cleveland, OH
Replied

Wickliffe is OK, and Lake County is probably one of the most dynamic and growing counties in the state.

That said, this deal is way too expensive for me. Given your numbers and a few other standard assumptions for the area, it works out to be an 8% cap. Throw in the substantial risk that your maintenance will run far higher than $720 a year for a 1935 house and the deal can be a real loser. On top of that, I don't expect any appreciation in this area. 

As a rule, I will automatically discard any deal where the price is more than 60 times the monthly rent.

I would take my $78k and try to find a duplex. For that price point you can be in a B-C suburb with a duplex or triplex. Heck, you can buy two SFRs if you buy in Euclid just two miles to the west with five figures to spare - but beware the risks of doing this.

  • Christian Carson
  • Loading replies...