Who's Buying Homes In Cleveland, Ohio ?

Question

How's the market in Cleveland, Ohio?

Nathan Fisher · Answer

Account Closed the Cleveland subreddit has a joke. We always recommend Lakewood to new transplants.

Account ClosedI have a data hungry investor who is dumping his duplexes in favor of single families. His focus is on reducing Tenant turnover, and his data points to single family tenants staying longer.

Account Closed · Answer

@Nathan Fisher I can definitely understand that 😃

Account Closed I shoot for $500 cash flow for every $100,000 of property value as a really rough estimate. For example my duplexes are $215,600 cash flows $900 a month, $245,000 cash flows 1245 a month and $215,000 cash flows 1100 a month. We also pay for water/sewer/trash which costs between $80-120 a month.

If I could find a single family with the same metrics, which I’m looking for, I’lL jump on it.

Brian Garlington · Answer

The low inventory is causing a bit of a bidding war on SOME properties in Cleveland. The SMART agents will know what the comps are and tell their sellers to take the CASH offers that may be lower but still close to the comps.

Unfortunately a lot of sellers are ignoring the agents and this is why you see those properties come back on the market because they didn’t appraise for the agreed upon price. This in turn causes the property to show a longer DOM.... causing them to receive offers of LOWER amounts....

🤦🏾‍♂️

Uri Gofman · Answer

The Cleveland market is on fire!  Strong demand coupled with limited supply in the Cleveland market is causing a shortage of inventory and quickly accelerating sales prices.  Any deals that make sense are trading at above asking price.  I'm seeing multiple offer situations over and over on new properties in the first few days on the market.  Despite all this, if an investor is patient and can think outside the box, there are always opportunities in every marketplace that others miss.

Account Closed · Answer

The Cleveland market is good if you're a seller; but, I'm curious to see for how long. I'm seeing more properties come back on the market after the sale didn't go through. It seems like the appraisal is coming back too low, the financing isn't following through or the buyer got cold feet during the inspection period and simply backed out.

I'm not sure if buyers are willing to accept a really low cash flow or if they don't care because they will be an owner occupant but some of these prices don't make sense if you do your due diligence. Maybe they are going for appreciation rather than cash flow. My wife and I have several duplexes in Lakewood, Ohio which is a very hot market (probably hottest in Cleveland). Not all of Cleveland is like that but it is getting like that. Looks like the bank underwriting is getting more stringent with the lower interest rates and COVID.

Jacob Repreza · Answer

Account Closed Yup! We do both. We got 5 Rentals at the moment and from those 5, 2 are already rented out and the other 3 are finishing rehab. We just closed on a flip and we got 4 more in progress as well.

Andrew Weiner · Answer

@Ryan Cleary.  I think that your numbers make sense but you also need to look critically at your home inspection and use that as a jumping off point for the capex and the expected time line.  Capex usually comes in chunks, for example a new driveway for $10,000 and then no capex for a little while which over time may average 7%.  I mention this because if you use your home inspection and annual inspections well you can do some preventative maintenance to push off some of the larger expenses.  For example sealing a drive way every couple years will extend the life significantly and save you from that large expense.  Its a tough pill to swallow to spend money on things that don't "need" to be done immediately but it can help retain the long term value of your investment.

Jacob Repreza · Answer

Yea we've had to get creative when writing our MLS offers and even then we get outbidded a good amount of the time. But the point is to keep making offers and go through the ones that have a week or 2 on the market and are past the initial offer frenzy.

We just got another flip offer accepted on a short sale in Cleveland Heights so we're just waiting on approval from the bank.

Account Closed · Answer

@Nathan Fisher Account Closed Thank you both for the insight, I appreciate it

Account Closed · Answer

For those that own property in Cleveland, do you invest more in single family or multi family? Do you find that either one performs better?

Who's Buying Homes In Cleveland, Ohio ?

Most Popular Reply