Cleveland Single Family Rental Property

[Rebekah Bloom]

Investment Info:

Single-family residence buy & hold investment in Cleveland.

Hi everyone, I am new here to BP and have just made my first investment purchase in the North Collinwood area, close to Waterloo. I live in Kansas City and also have one other STR property in Branson, MO.

How did you finance this deal?

Cash

[Nathan Roberts]

Originally posted by @Rebekah Bloom:

@Nathan Roberts I have a condo at Western Auto Lofts that I bought as an investment 10 years ago before they were completed and back then I paid $200 a square foot. I'd lose money if I sold it today and I've been hanging onto it for over a decade. A few years ago I purchased a SFR in Waldo that I completely remodeled and flipped and it was a nightmare trying to sell. I really don't have any interest in going east of Holmes and I think the market here is overpriced for what it is. Prairie Village, West Side, Columbus Park, etc. The problem is that the pay scale isn't any higher than it is in Cleveland but the cost of living is 2-3 times higher and the rental market has not caught up with the cost of buying a home here in KC. For resale (buy and hold) families want to be on the Kansas side because of the school districts but there are bidding wars on anything under 200k from Fairway on south. If I go into the midtown area I am still putting in $150-200k for a SFR but could not get more than 12-1300 in rent. The numbers don't make sense for me.
I have a tour company in downtown KC and as a result I sit in on many of the city’s planning meetings to stay current on how and where the city is developing and maybe that’s why I don’t really want to invest here anymore. (Did I say that out loud?)

I'd for sure be interested to hear how you're doing! Maybe SFR isn't where I should be looking here. I'm a huge advocate of supporting local and doing better for the community and the city in which you live but until KC also feels the same about making it better...

If you're investing in B class and up neighborhoods in Jackson County, you will likely need to take on value-add opportunities to get great cash flow. I have investors clients that invest in C class areas such as Raytown, South KC, grandview, etc. that get $150+ in cash flow without any value-add. These are areas with higher rental occupancy than compared with owner occupancy. With that said, a fix and flip strategy can still work in these areas but they are likely to sit on the market longer. MIdtown is a great area for flipping and multi-family buy and hold. I see houses all the time with rents well over $1300 but you're going to spend over $200k+ because you're likely buying off the MLS. The MLS for the most part are meant for retail buyers; you can find some great deals on there though. Long story short, if you want buy and hold in B class up neighborhoods, try buying undervalued properties then force appreciation and drive up the rental value by doing a rehab. Currently, there is more than $500 million dollars that has been pledged by public and private entities to assist in revitalizing the Troost corridor. If you sit on many boards I'm sure you know that 4 new MAC Properties multi-family buildings will be going up on the corner of Troost and Armour Blvd. Look for appreciation and taxes to go up in that area soon after these buildings have been fully developed. There are pockets between Troost and Paseo from Armour Blvd to Emanuel Cleaver II Blvd and Volker Blvd to 63rd street that are seen as up and coming. I see investors working on properties in these areas often but when you start to see too many, it may be too late to jump in. Other areas to keep in eye on that investors have already started rehabbing houses in are Pendleton Heights, Scarritt Renaissance, and the West Bottoms (mostly multi-family).