Experience of OOS investing in Cleveland after 1.5 years.

[Luka Jozic]

Hi everyone, I started investing in Cleveland about a year and a half ago and have acquired 6 LTRs (SFH and MFH) using mainly the BRRRR method in C areas. I've done fairly big renovations where in most cases, Im replacing almost everything in/on the house. First year has been tons of learning and despite all the research and preparation I did, I still did mistakes and learned things the hard way. I went with one of the biggest PMs that everybody vouched for, yet it took them forever to even place a tenant, and once they did, the tenants never paid on time. Additionally, despite the houses being newly renovated, every month there were new expenses and something breaking, almost as if they want me to not cashflow. The PM said they don't up-charge, but most repairs and expenses were ridiculously high. The result of this? No cashflow, in fact Im in the negative for almost every property so far, and yes I do put aside money for vacancies, capex, and repairs. I finally switched PMs recently and the new one seems much better but Im still getting pretty frequent repairs though much cheaper than the previous PM. The problem is that in this market, getting $2-300 a month cashflow is about as good as it gets, and one furnace, one turnover or whatever and that takes out the cashflow for that year, or even puts you in the negative.

Lets just say the experience hasn't been great, yet. Im trying to stay hopeful that it will turn around but I just keep receiving blow after blow. Just recently got hit with a 10K sewer line repair. I know, its my fault I didn't inspect the sewer line but in my defense, having such inspection contingencies makes it nearly impossible to find a viable BRRRR deal, as there are several investors lined up ready to pay more, in cash, and no contingencies. Im now starting to doubt wether or not Cleveland is actually a good market to invest in? Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit. On paper it looks good, but the reality is a different story. Im wondering if other markets might be better, with somewhat newer houses and higher quality tenants? But the thing with those markets are you'd be happy to break even, so even if repairs are less and tenant quality is better, I feel like it would end up being the same result.

For those of you that invest in Cleveland, do you have similar experiences? If not, what do you think you might be doing differently to make it work better?

[Luka Jozic]

Quote from @Michael P.:

Its not to late to do sewer inspection on the other properties if they were never done. Prevent sewage leaking and destabilizing the foundation. Blow in a resin-coated lining through the old pipe for $150 per linear foot. Better than 35k repair for sinking foundation.

 Yeah Im already on it and also added insurance trough Cleveland water for like $10 a month per property. 

[Engelo Rumora]

Quote from @Luka Jozic:

Quote from @Scott Bowen:

@Luka Jozic BRRRR is still a good strategy - don't let anyone tell you otherwise. But gone are the days where you can expect to pull all your money out of the deal and still cash flow $200+ a month. I aim for 10-20% CoC on BRRRR deals.

Cleveland wouldn't be my market of choice given how old most of the houses are, but I know a lot of investors who have success there, so it's definitely viable. For C/C- neighborhoods you usually need to scale to 10+ doors; it's a numbers game. 

Yeah my goal is around 30% but its hard to achieve, especially using a hard money loan. If I could start finding off market deals myself I think it could work, usually the assignment fee from wholesalers is the difference between pulling all your money out and not. 

You're welcome on the lists mate hehe 👍 (No, not sending to anybody else as Luka has Balkan heritage I'm assuming and so do I so we look after each other haha).

Wholesalers are a disaster and all of your equity/profit will go to them.

I suggest cold calling yourself, learn/practice your pitch and then elevate and delegate.

My folks have been doing just acquisitions for many years now but all good things take time.

All the best mate

[Luka Jozic]

Quote from @Engelo Rumora:

Quote from @Luka Jozic:

Quote from @Scott Bowen:

@Luka Jozic BRRRR is still a good strategy - don't let anyone tell you otherwise. But gone are the days where you can expect to pull all your money out of the deal and still cash flow $200+ a month. I aim for 10-20% CoC on BRRRR deals.

Cleveland wouldn't be my market of choice given how old most of the houses are, but I know a lot of investors who have success there, so it's definitely viable. For C/C- neighborhoods you usually need to scale to 10+ doors; it's a numbers game. 

Yeah my goal is around 30% but its hard to achieve, especially using a hard money loan. If I could start finding off market deals myself I think it could work, usually the assignment fee from wholesalers is the difference between pulling all your money out and not. 

You're welcome on the lists mate hehe 👍 (No, not sending to anybody else as Luka has Balkan heritage I'm assuming and so do I so we look after each other haha).

Wholesalers are a disaster and all of your equity/profit will go to them.

I suggest cold calling yourself, learn/practice your pitch and then elevate and delegate.

My folks have been doing just acquisitions for many years now but all good things take time.

All the best mate

Greatly appreciate it man and yeah I do. Yeah that sounds like a good plan! Haven't bought anything from wholesalers as their deals are more expensive than the MLS lol..

[Chris Clothier]

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Ryan Arth:

Quote from @Chris Clothier:

Quote from @Ryan Arth:

You’re right. Keep your focus on how many crappy properties you can buy each year, instead of buying fewer but better properties. Focus on “scaling quickly.” Collect properties instead of money. It’s a winning strategy…..

Way back when BP started, before we used our real names, a prominent guy on here named Mike in OH said "focus on your ROI, not your door count". You are investing for return on capital.

Someone had congratulated him for how many doors he had in Cbus and he pointed out that he was collecting rents in cash with a pistol and his day to day was anything but fun. 

 I am always on the look out for users who have been on the site longer than me.  I haven't found many still around.  I'm not sure there are any with joined dates older than yours still on the site!  The site has changed tremendously.  Glad to see there are still some original voices on here.

 Why thank you Sir. I originally found BP to help myself nagivate the waters of RE. Now I am here to help others, though I do still learn daily. 

I remember studying your business model early on through your posts and early podcast episodes. We also met at the speaker's dinner at J. Martin's RE Summit in Oakland in ~2018. If I remember you left your family in Vegas at a birthday celebration to come speak. Now that is service! Cheers to you.

I was at that J Martin event I miss his events  fun guy.

Lori and you picked me up in the Tesla and we almost ran over a homeless guy in Oakland hahaha

I had forgotten that part.. I remember though you and I talking with Chris.. he invited me to visit his office in memphis which I did later in the year.. Boy his staff was first class all the way.

Not me mate,

F@$# it tho.

I'll just show up one day and knock on his door haha

Teach him how to play football and not how you Yankee's call it "soccer" hahaha

 My fault, I thought you knew the invitation was open!  You're always welcome to visit. It's the best way for us to grow as companies by sharing what works and what doesn't.  I've been expanding my business investments and interests.  If you make it to Memphis, we invest pretty heavily in the youth club game down here and our non-profit, Cancer Kickers Soccer Club, is the first non-profit to be on the jersey of a professional soccer team, 901 FC of the USL.  We'll go check out the operations.  Soccer is an awesome sport and great teacher for kids.

[Jay Hinrichs]

Quote from @Luka Jozic:

Quote from @Engelo Rumora:

Quote from @Luka Jozic:

Quote from @Scott Bowen:

@Luka Jozic BRRRR is still a good strategy - don't let anyone tell you otherwise. But gone are the days where you can expect to pull all your money out of the deal and still cash flow $200+ a month. I aim for 10-20% CoC on BRRRR deals.

Cleveland wouldn't be my market of choice given how old most of the houses are, but I know a lot of investors who have success there, so it's definitely viable. For C/C- neighborhoods you usually need to scale to 10+ doors; it's a numbers game. 

Yeah my goal is around 30% but its hard to achieve, especially using a hard money loan. If I could start finding off market deals myself I think it could work, usually the assignment fee from wholesalers is the difference between pulling all your money out and not. 

You're welcome on the lists mate hehe 👍 (No, not sending to anybody else as Luka has Balkan heritage I'm assuming and so do I so we look after each other haha).

Wholesalers are a disaster and all of your equity/profit will go to them.

I suggest cold calling yourself, learn/practice your pitch and then elevate and delegate.

My folks have been doing just acquisitions for many years now but all good things take time.

All the best mate

Greatly appreciate it man and yeah I do. Yeah that sounds like a good plan! Haven't bought anything from wholesalers as their deals are more expensive than the MLS lol..

Luka  I have one property left in Cleveland I would do short term owner finance on so you can do some BRRR its got a long term tenant in it.. So no HML costs and cash flow while you do some fix up till you can refi.. I have not put it on MLS yet.. I put on a duplex I had there and got 6 offers so I know the market is robust.. there currently.. contact me privately if interested .

[Chris Clothier]

Quote from @Luka Jozic:

Quote from @Jim K.:

Before the fur starts flying, can I at least make one simple statement about this situation? To live multiple states away and run a string of successful C-class long-distance BRRRRs anywhere in the Rust Belt is practically impossible. I think the OP is lucky not to have experienced catastrophic failure yet. This was taking on suicidal risk to begin with, and it's just going to get worse. I'm actuallu surprised and I'm sure there are volumes left unspoken here by the OP about how hard it must have been to make it this far. I only hope my own posts recounting what my hyperlocal experiences have been like here in Pittsburgh, the self-styled "Paris of Appalachia," do not in any way encourage people to follow the OP's lead. There's an omnipresent, ubiquitous brutality to life in general and running rental real estate in  prticular here that just doesn't translate well into metrics and data.

 Don't agree one bit with that statement and Im getting a feeling that most people in this thread are inflating the struggles I've been facing. First of all I said Im negative on most, not all. The ones Im negative on, two of them weren't even BRRRRs, I was negative because my old PM was robbing me and on the other cause I got greedy and agreed on unqualified tenants at higher than market rent that I had to evict after 3 months. The two BRRRRs that are negative is one because of the sewer (could and should have done a sewer inspection) and the other one is negative cause my old PM couldn't find a tenant for the second unit in over 3 months (my new PM filled it in 1 week and no issues ever since).

Would it have been better if I was there? Absolutely. Has my contractors and my old PM ripped me off on certain things that I can't verify due to being OOS, 100%. But thats part of the being OOS and as I gain more experience and I better team I can minimize that. I definitely don't think its gonna get worse from here I think the complete opposite. Yes I was expecting cash flow to be more stable from the beginning but I guess it takes a little bit of time. I haven't left more than 5-15K in ANY on my properties and have created a lot of equity in all of them except Toledo. And in terms of appreciation, according to Zillow data over a 8 year span, its been about the same for almost every market. 

 Luka, its hard on a 2-dimensional forum to get the full tone, but I think most if not all of the posters on here root for each other no matter what advice is followed.  Again, I think from your posts that you are well ahead of many OOS investors actively building their portfolios who post on here.  That is not a knock on anyone else; it is just a nod to you.  

One suggestion for you.  Use the messaging on here.  If you are getting feedback from this group of posters, many of which are legendary by BP standards and known for their knowledge and willingness to share it.  Reach out using the message system if you have any direct questions or want additional advice.  Not that it will be significantly different from what's on here, but you may be able to get more granular advice.  And again, you'll get advice from posters that could not care less whether you follow it to the "T".  We just love seeing other investors reach their expectations and definitions for success.

[Bob Stevens]

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Engelo Rumora:

Quote from @Luka Jozic:

Quote from @Scott Bowen:

@Luka Jozic BRRRR is still a good strategy - don't let anyone tell you otherwise. But gone are the days where you can expect to pull all your money out of the deal and still cash flow $200+ a month. I aim for 10-20% CoC on BRRRR deals.

Cleveland wouldn't be my market of choice given how old most of the houses are, but I know a lot of investors who have success there, so it's definitely viable. For C/C- neighborhoods you usually need to scale to 10+ doors; it's a numbers game. 

Yeah my goal is around 30% but its hard to achieve, especially using a hard money loan. If I could start finding off market deals myself I think it could work, usually the assignment fee from wholesalers is the difference between pulling all your money out and not. 

You're welcome on the lists mate hehe 👍 (No, not sending to anybody else as Luka has Balkan heritage I'm assuming and so do I so we look after each other haha).

Wholesalers are a disaster and all of your equity/profit will go to them.

I suggest cold calling yourself, learn/practice your pitch and then elevate and delegate.

My folks have been doing just acquisitions for many years now but all good things take time.

All the best mate

Greatly appreciate it man and yeah I do. Yeah that sounds like a good plan! Haven't bought anything from wholesalers as their deals are more expensive than the MLS lol..

Luka  I have one property left in Cleveland I would do short term owner finance on so you can do some BRRR its got a long term tenant in it.. So no HML costs and cash flow while you do some fix up till you can refi.. I have not put it on MLS yet.. I put on a duplex I had there and got 6 offers so I know the market is robust.. there currently.. contact me privately if interested .

 Hey Jay, what is the ask address and rents, 

thanks 

[Engelo Rumora]

Quote from @Chris Clothier:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Ryan Arth:

Quote from @Chris Clothier:

Quote from @Ryan Arth:

You’re right. Keep your focus on how many crappy properties you can buy each year, instead of buying fewer but better properties. Focus on “scaling quickly.” Collect properties instead of money. It’s a winning strategy…..

Way back when BP started, before we used our real names, a prominent guy on here named Mike in OH said "focus on your ROI, not your door count". You are investing for return on capital.

Someone had congratulated him for how many doors he had in Cbus and he pointed out that he was collecting rents in cash with a pistol and his day to day was anything but fun. 

 I am always on the look out for users who have been on the site longer than me.  I haven't found many still around.  I'm not sure there are any with joined dates older than yours still on the site!  The site has changed tremendously.  Glad to see there are still some original voices on here.

 Why thank you Sir. I originally found BP to help myself nagivate the waters of RE. Now I am here to help others, though I do still learn daily. 

I remember studying your business model early on through your posts and early podcast episodes. We also met at the speaker's dinner at J. Martin's RE Summit in Oakland in ~2018. If I remember you left your family in Vegas at a birthday celebration to come speak. Now that is service! Cheers to you.

I was at that J Martin event I miss his events  fun guy.

Lori and you picked me up in the Tesla and we almost ran over a homeless guy in Oakland hahaha

I had forgotten that part.. I remember though you and I talking with Chris.. he invited me to visit his office in memphis which I did later in the year.. Boy his staff was first class all the way.

Not me mate,

F@$# it tho.

I'll just show up one day and knock on his door haha

Teach him how to play football and not how you Yankee's call it "soccer" hahaha

 My fault, I thought you knew the invitation was open!  You're always welcome to visit. It's the best way for us to grow as companies by sharing what works and what doesn't.  I've been expanding my business investments and interests.  If you make it to Memphis, we invest pretty heavily in the youth club game down here and our non-profit, Cancer Kickers Soccer Club, is the first non-profit to be on the jersey of a professional soccer team, 901 FC of the USL.  We'll go check out the operations.  Soccer is an awesome sport and great teacher for kids.

Chris,

It would be an honor mate.

Let me know when and where and I'll be there.

Croatia vs Italy starting soon so gotta watch that since I spent a large part of my life in Croatia and all of my family is still there.

Forza Italia haha

ps. Let's just say I know a thing or to about soccer/football and my good friend is Luka Modric's best man so it was interesting having a conference call and advising with both of them on some brand strategy for Luka hehe 🤠

[Jay Hinrichs]

Quote from @Bob Stevens:

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Engelo Rumora:

Quote from @Luka Jozic:

Quote from @Scott Bowen:

@Luka Jozic BRRRR is still a good strategy - don't let anyone tell you otherwise. But gone are the days where you can expect to pull all your money out of the deal and still cash flow $200+ a month. I aim for 10-20% CoC on BRRRR deals.

Cleveland wouldn't be my market of choice given how old most of the houses are, but I know a lot of investors who have success there, so it's definitely viable. For C/C- neighborhoods you usually need to scale to 10+ doors; it's a numbers game. 

Yeah my goal is around 30% but its hard to achieve, especially using a hard money loan. If I could start finding off market deals myself I think it could work, usually the assignment fee from wholesalers is the difference between pulling all your money out and not. 

You're welcome on the lists mate hehe 👍 (No, not sending to anybody else as Luka has Balkan heritage I'm assuming and so do I so we look after each other haha).

Wholesalers are a disaster and all of your equity/profit will go to them.

I suggest cold calling yourself, learn/practice your pitch and then elevate and delegate.

My folks have been doing just acquisitions for many years now but all good things take time.

All the best mate

Greatly appreciate it man and yeah I do. Yeah that sounds like a good plan! Haven't bought anything from wholesalers as their deals are more expensive than the MLS lol..

Luka  I have one property left in Cleveland I would do short term owner finance on so you can do some BRRR its got a long term tenant in it.. So no HML costs and cash flow while you do some fix up till you can refi.. I have not put it on MLS yet.. I put on a duplex I had there and got 6 offers so I know the market is robust.. there currently.. contact me privately if interested .

 Hey Jay, what is the ask address and rents, 

thanks 

Bob, not looking for a wholesale  deal.. I will finance it but want closer to retail and I know you dont buy like that.

[V.G Jason]

Quote from @Engelo Rumora:

Quote from @Chris Clothier:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Ryan Arth:

Quote from @Chris Clothier:

Quote from @Ryan Arth:

You’re right. Keep your focus on how many crappy properties you can buy each year, instead of buying fewer but better properties. Focus on “scaling quickly.” Collect properties instead of money. It’s a winning strategy…..

Way back when BP started, before we used our real names, a prominent guy on here named Mike in OH said "focus on your ROI, not your door count". You are investing for return on capital.

Someone had congratulated him for how many doors he had in Cbus and he pointed out that he was collecting rents in cash with a pistol and his day to day was anything but fun. 

 I am always on the look out for users who have been on the site longer than me.  I haven't found many still around.  I'm not sure there are any with joined dates older than yours still on the site!  The site has changed tremendously.  Glad to see there are still some original voices on here.

 Why thank you Sir. I originally found BP to help myself nagivate the waters of RE. Now I am here to help others, though I do still learn daily. 

I remember studying your business model early on through your posts and early podcast episodes. We also met at the speaker's dinner at J. Martin's RE Summit in Oakland in ~2018. If I remember you left your family in Vegas at a birthday celebration to come speak. Now that is service! Cheers to you.

I was at that J Martin event I miss his events  fun guy.

Lori and you picked me up in the Tesla and we almost ran over a homeless guy in Oakland hahaha

I had forgotten that part.. I remember though you and I talking with Chris.. he invited me to visit his office in memphis which I did later in the year.. Boy his staff was first class all the way.

Not me mate,

F@$# it tho.

I'll just show up one day and knock on his door haha

Teach him how to play football and not how you Yankee's call it "soccer" hahaha

 My fault, I thought you knew the invitation was open!  You're always welcome to visit. It's the best way for us to grow as companies by sharing what works and what doesn't.  I've been expanding my business investments and interests.  If you make it to Memphis, we invest pretty heavily in the youth club game down here and our non-profit, Cancer Kickers Soccer Club, is the first non-profit to be on the jersey of a professional soccer team, 901 FC of the USL.  We'll go check out the operations.  Soccer is an awesome sport and great teacher for kids.

Chris,

It would be an honor mate.

Let me know when and where and I'll be there.

Croatia vs Italy starting soon so gotta watch that since I spent a large part of my life in Croatia and all of my family is still there.

Forza Italia haha

ps. Let's just say I know a thing or to about soccer/football and my good friend is Luka Modric's best man so it was interesting having a conference call and advising with both of them on some brand strategy for Luka hehe 🤠

 He's not the best Luka. forza italia! Mattia clutch. With that said @Luka Jozic you literally got the cream of the crop in regards to advice. Take it for what it's worth.

[Engelo Rumora]

Quote from @V.G Jason:

Quote from @Engelo Rumora:

Quote from @Chris Clothier:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Ryan Arth:

Quote from @Chris Clothier:

Quote from @Ryan Arth:

You’re right. Keep your focus on how many crappy properties you can buy each year, instead of buying fewer but better properties. Focus on “scaling quickly.” Collect properties instead of money. It’s a winning strategy…..

Way back when BP started, before we used our real names, a prominent guy on here named Mike in OH said "focus on your ROI, not your door count". You are investing for return on capital.

Someone had congratulated him for how many doors he had in Cbus and he pointed out that he was collecting rents in cash with a pistol and his day to day was anything but fun. 

 I am always on the look out for users who have been on the site longer than me.  I haven't found many still around.  I'm not sure there are any with joined dates older than yours still on the site!  The site has changed tremendously.  Glad to see there are still some original voices on here.

 Why thank you Sir. I originally found BP to help myself nagivate the waters of RE. Now I am here to help others, though I do still learn daily. 

I remember studying your business model early on through your posts and early podcast episodes. We also met at the speaker's dinner at J. Martin's RE Summit in Oakland in ~2018. If I remember you left your family in Vegas at a birthday celebration to come speak. Now that is service! Cheers to you.

I was at that J Martin event I miss his events  fun guy.

Lori and you picked me up in the Tesla and we almost ran over a homeless guy in Oakland hahaha

I had forgotten that part.. I remember though you and I talking with Chris.. he invited me to visit his office in memphis which I did later in the year.. Boy his staff was first class all the way.

Not me mate,

F@$# it tho.

I'll just show up one day and knock on his door haha

Teach him how to play football and not how you Yankee's call it "soccer" hahaha

 My fault, I thought you knew the invitation was open!  You're always welcome to visit. It's the best way for us to grow as companies by sharing what works and what doesn't.  I've been expanding my business investments and interests.  If you make it to Memphis, we invest pretty heavily in the youth club game down here and our non-profit, Cancer Kickers Soccer Club, is the first non-profit to be on the jersey of a professional soccer team, 901 FC of the USL.  We'll go check out the operations.  Soccer is an awesome sport and great teacher for kids.

Chris,

It would be an honor mate.

Let me know when and where and I'll be there.

Croatia vs Italy starting soon so gotta watch that since I spent a large part of my life in Croatia and all of my family is still there.

Forza Italia haha

ps. Let's just say I know a thing or to about soccer/football and my good friend is Luka Modric's best man so it was interesting having a conference call and advising with both of them on some brand strategy for Luka hehe 🤠

 He's not the best Luka. forza italia! Mattia clutch. With that said @Luka Jozic you literally got the cream of the crop in regards to advice. Take it for what it's worth.

Disappointed mate

Two games now conceded goals in stoppage time.

Such is life.

If not Croatia, I'm an Italy fan.

Aussie's suck always haha

[Eric James]

Quote from @Luka Jozic:

Quote from @Bob Stevens:

Quote from @Luka Jozic:

Hi everyone, I started investing in Cleveland about a year and a half ago and have acquired 6 LTRs (SFH and MFH) using mainly the BRRRR method in C areas. I've done fairly big renovations where in most cases, Im replacing almost everything in/on the house. First year has been tons of learning and despite all the research and preparation I did, I still did mistakes and learned things the hard way. I went with one of the biggest PMs that everybody vouched for, yet it took them forever to even place a tenant, and once they did, the tenants never paid on time. Additionally, despite the houses being newly renovated, every month there were new expenses and something breaking, almost as if they want me to not cashflow. The PM said they don't up-charge, but most repairs and expenses were ridiculously high. The result of this? No cashflow, in fact Im in the negative for almost every property so far, and yes I do put aside money for vacancies, capex, and repairs. I finally switched PMs recently and the new one seems much better but Im still getting pretty frequent repairs though much cheaper than the previous PM. The problem is that in this market, getting $2-300 a month cashflow is about as good as it gets, and one furnace, one turnover or whatever and that takes out the cashflow for that year, or even puts you in the negative.

Lets just say the experience hasn't been great, yet. Im trying to stay hopeful that it will turn around but I just keep receiving blow after blow. Just recently got hit with a 10K sewer line repair. I know, its my fault I didn't inspect the sewer line but in my defense, having such inspection contingencies makes it nearly impossible to find a viable BRRRR deal, as there are several investors lined up ready to pay more, in cash, and no contingencies. Im now starting to doubt wether or not Cleveland is actually a good market to invest in? Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit. On paper it looks good, but the reality is a different story. Im wondering if other markets might be better, with somewhat newer houses and higher quality tenants? But the thing with those markets are you'd be happy to break even, so even if repairs are less and tenant quality is better, I feel like it would end up being the same result.

For those of you that invest in Cleveland, do you have similar experiences? If not, what do you think you might be doing differently to make it work better?

' 

 I TRIED to help you but you " know better". I get on avg 800 per month NET income 15- 20% NET (based on cash purchases) on SF, and more on my duplex's. My maintenance is little to nothing as we do the reno correctly. I also tried to help you with PM I'm aware of them all 99% are terrible and will charge you 3k to replace a furnace when the real cost is about 1600. I just got $900 for a 1 br in East Cleveland. I'm going to get 1500 for a 3 br in Lee Harvard, fully renovated all in 75k, do the math :) 

All the best 

Im not interested in buying turnkey and also not buying cash, I would run out of money real quick. I need to be doing BRRRR thats the only way to scale somewhat fast. Im glad you're doing good.

That's what I've been doing. The key to me, to do it realistically, is to BRRR in your local area.

[Michael P.]

Quote from @Bob Stevens:

Quote from @Michael P.:

Brooo I told you that toledo one was a D area

 Irrelevant what area it is, Its ALL about price, screening and doing the reno correctly 

Lets "agree to disagree". I think investing out of state in a D area is a bad idea. C area also a bad idea but maybe borderline if bought at a large discount. B area is the best for investing out of state.

[Bob Stevens]

Quote from @Michael P.:

Quote from @Bob Stevens:

Quote from @Michael P.:

Brooo I told you that toledo one was a D area

 Irrelevant what area it is, Its ALL about price, screening and doing the reno correctly 

Lets "agree to disagree". I think investing out of state in a D area is a bad idea. C area also a bad idea but maybe borderline if bought at a large discount. B area is the best for investing out of state.

 100% irrelevant IF you have a team. I live OOS and have been doing deals in the Cleveland markets for many years. Closing on another this week. I have props that many would call the hood, but I do not worry. I put in Govt program tenants, and get paid like clockwork, 15- 20% net caps. 

All the best 

[Luka Jozic]

Quote from @Bob Stevens:

Quote from @Michael P.:

Quote from @Bob Stevens:

Quote from @Michael P.:

Brooo I told you that toledo one was a D area

 Irrelevant what area it is, Its ALL about price, screening and doing the reno correctly 

Lets "agree to disagree". I think investing out of state in a D area is a bad idea. C area also a bad idea but maybe borderline if bought at a large discount. B area is the best for investing out of state.

 100% irrelevant IF you have a team. I live OOS and have been doing deals in the Cleveland markets for many years. Closing on another this week. I have props that many would call the hood, but I do not worry. 

 So how do you get stable properties in "the hood"? What is it that your team does? I mean yes you do good rehabs of course. But how do you get solid tenants in there? Do you only do S8 or do you screen them in a specific way? What's the magic formula Bob?

[Lily Wong]

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

[Jay Hinrichs]

Quote from @Lily Wong:

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

not sure how sec 8 works exactly in cleveland but in areas I owned sec 8 leases could only be written for a year.. also its only guaranteed if the home pass's inspection and the tenant stays on the program etc etc.. if you have a GOOD sec 8 tenant then yes its very predictable.

[Regina Blake]

HI, yes people from all over the world are investing in Ohio's real estate market and overall most of them are doing well.

[Regina Blake]

Hi, Ohio's market is doing well but, different people have different experiences as far as real estate is concerned. Most people are doing well that is why they are investing in Ohio's market. There will be a lot of expenses because there is always something that will need to be done fixed, updated etc. There will be tenants that will pay, and some will not pay. The overall end game is you cannot go wrong with investing in real estate. 

[Vadim F.]

Quote from @Lily Wong:

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

 Hi @Lily Wong. I am curious why you chose to invest in East Cleveland? Is this your first investment property or are you a seasoned investor? East Cleveland can be really difficult to get quality tenants and you will need a PM who knows the tenant base of that area really well......many PMs do not want to work in certain parts of that area. Regarding S8, the leases are 1yr only, but S8 tenants tend to stay longer vs cash paying tenants. Unless you have a very strong team on the ground, I would not recommend investing in EC.

[Lily Wong]

Quote from @Vadim F.:

Quote from @Lily Wong:

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

 Hi @Lily Wong. I am curious why you chose to invest in East Cleveland? Is this your first investment property or are you a seasoned investor? East Cleveland can be really difficult to get quality tenants and you will need a PM who knows the tenant base of that area really well......many PMs do not want to work in certain parts of that area. Regarding S8, the leases are 1yr only, but S8 tenants tend to stay longer vs cash paying tenants. Unless you have a very strong team on the ground, I would not recommend investing in EC.

Hi Vadim,

Seasoned investor but new to OOS investing. I made a trip down to Cleveland a couple months ago to check out opportunities there and hence made the decision to invest in East Cleveland mainly for cash flow. Based on some research & working with a number of agents and chatting with housing authority I understand there's higher risk. I have heard mixed reviews on East Cleveland and heard the tenants is an issue but I'm specifically looking to rent to s8 only for the guaranteed rent. Currently just missing decent PMs to work with and looking for more recommendations. Would love to hear more about your current experiences with Cleveland in general and your recommendations.

[Vadim F.]

Quote from @Lily Wong:

Quote from @Vadim F.:

Quote from @Lily Wong:

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

 Hi @Lily Wong. I am curious why you chose to invest in East Cleveland? Is this your first investment property or are you a seasoned investor? East Cleveland can be really difficult to get quality tenants and you will need a PM who knows the tenant base of that area really well......many PMs do not want to work in certain parts of that area. Regarding S8, the leases are 1yr only, but S8 tenants tend to stay longer vs cash paying tenants. Unless you have a very strong team on the ground, I would not recommend investing in EC.

Hi Vadim,

Seasoned investor but made a trip down to Cleveland a couple months ago to check out opportunities there and hence made the decision to invest in East Cleveland mainly for cash flow. I have heard mixed reviews on East Cleveland and heard the tenants is an issue but I'm specifically looking to rent to s8 only for the guaranteed rent. Currently just missing decent PMs to work with and looking for more recommendations. Would love to hear more about your current experiences with Cleveland in general

 I would stay away from East Cleveland if its your 1st property in the Cleveland market. Like I mentioned in my previous post getting a PM who will actually manage your property properly will be very hard. Also, just because you will be renting to S8 tenant does not reduce risk.....yes the tenant may be on a voucher and it will cover 70% at the least of the rent but the tenant quality will be low. And even if the tenants chooses to stay in your property for 2yrs, the damage they may cause will eat away all of your cash flow and leave you potentially upside down. A lot of investors who succeed in EC know the tenant base very well and a lot of them self manage. Having said that, there are some pockets near the RTA off Superior and those that border Cleveland Heights can be ok but the rest of it, stay away.

[Ryan Arth]

Quote from @Vadim F.:

Quote from @Lily Wong:

Quote from @Vadim F.:

Quote from @Lily Wong:

Hi Luka,

I also just started to invest in Cleveland area but East Cleveland. Would love to know if you used a PM to rent to section 8 only? Or are all these tenants they've been placing non section 8 tenants? From what I've been hearing it's approximately up to 3 months to place section 8 tenants there but the leases can range anywhere from 1-5 years. Currently, my strategy is to rent to section 8 tenants for the guaranteed income. Would love to connect to hear more about your experiences as well and any PM recommendations. 

 Hi @Lily Wong. I am curious why you chose to invest in East Cleveland? Is this your first investment property or are you a seasoned investor? East Cleveland can be really difficult to get quality tenants and you will need a PM who knows the tenant base of that area really well......many PMs do not want to work in certain parts of that area. Regarding S8, the leases are 1yr only, but S8 tenants tend to stay longer vs cash paying tenants. Unless you have a very strong team on the ground, I would not recommend investing in EC.

Hi Vadim,

Seasoned investor but made a trip down to Cleveland a couple months ago to check out opportunities there and hence made the decision to invest in East Cleveland mainly for cash flow. I have heard mixed reviews on East Cleveland and heard the tenants is an issue but I'm specifically looking to rent to s8 only for the guaranteed rent. Currently just missing decent PMs to work with and looking for more recommendations. Would love to hear more about your current experiences with Cleveland in general

 I would stay away from East Cleveland if its your 1st property in the Cleveland market. Like I mentioned in my previous post getting a PM who will actually manage your property properly will be very hard. Also, just because you will be renting to S8 tenant does not reduce risk.....yes the tenant may be on a voucher and it will cover 70% at the least of the rent but the tenant quality will be low. And even if the tenants chooses to stay in your property for 2yrs, the damage they may cause will eat away all of your cash flow and leave you potentially upside down. A lot of investors who succeed in EC know the tenant base very well and a lot of them self manage. Having said that, there are some pockets near the RTA off Superior and those that border Cleveland Heights can be ok but the rest of it, stay away.

 I had a client considering a building on that edge that you mentioned just yesterday. I made the same recommendation, if they were to dip into EC from OOS, that would be the only place that would potentially fit their buy box.

[John Fleming]

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Bob Stevens:

Quote from @Luka Jozic:

Hi everyone, I started investing in Cleveland about a year and a half ago and have acquired 6 LTRs (SFH and MFH) using mainly the BRRRR method in C areas. I've done fairly big renovations where in most cases, Im replacing almost everything in/on the house. First year has been tons of learning and despite all the research and preparation I did, I still did mistakes and learned things the hard way. I went with one of the biggest PMs that everybody vouched for, yet it took them forever to even place a tenant, and once they did, the tenants never paid on time. Additionally, despite the houses being newly renovated, every month there were new expenses and something breaking, almost as if they want me to not cashflow. The PM said they don't up-charge, but most repairs and expenses were ridiculously high. The result of this? No cashflow, in fact Im in the negative for almost every property so far, and yes I do put aside money for vacancies, capex, and repairs. I finally switched PMs recently and the new one seems much better but Im still getting pretty frequent repairs though much cheaper than the previous PM. The problem is that in this market, getting $2-300 a month cashflow is about as good as it gets, and one furnace, one turnover or whatever and that takes out the cashflow for that year, or even puts you in the negative.

Lets just say the experience hasn't been great, yet. Im trying to stay hopeful that it will turn around but I just keep receiving blow after blow. Just recently got hit with a 10K sewer line repair. I know, its my fault I didn't inspect the sewer line but in my defense, having such inspection contingencies makes it nearly impossible to find a viable BRRRR deal, as there are several investors lined up ready to pay more, in cash, and no contingencies. Im now starting to doubt wether or not Cleveland is actually a good market to invest in? Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit. On paper it looks good, but the reality is a different story. Im wondering if other markets might be better, with somewhat newer houses and higher quality tenants? But the thing with those markets are you'd be happy to break even, so even if repairs are less and tenant quality is better, I feel like it would end up being the same result.

For those of you that invest in Cleveland, do you have similar experiences? If not, what do you think you might be doing differently to make it work better?

' 

 I TRIED to help you but you " know better". I get on avg 800 per month NET income 15- 20% NET (based on cash purchases) on SF, and more on my duplex's. My maintenance is little to nothing as we do the reno correctly. I also tried to help you with PM I'm aware of them all 99% are terrible and will charge you 3k to replace a furnace when the real cost is about 1600. I just got $900 for a 1 br in East Cleveland. I'm going to get 1500 for a 3 br in Lee Harvard, fully renovated all in 75k, do the math :) 

All the best 

Im not interested in buying turnkey and also not buying cash, I would run out of money real quick. I need to be doing BRRRR thats the only way to scale somewhat fast. Im glad you're doing good.

but if your negative cash flow your bleeding your money anyways.. instead of buying a property in a better local that is rehabbed better than you can do. And actually being cash positive instead of negative at least your post says your cash negative not making any money so you are eroding your cash by feeding these.. not to mention the incredible risk you take with remote rehab and the time involved .. If your paying cash to buy and rehab then refinancing I get that.. but your still paying for two closing costs. And if you finance the buy then you have money there.. just some things to think about.

Thats fair but Im assuming there is a little bit of a learning curve before you get it right? If I buy turnkey, Im putting 25% down on any property, which is like 30-45K in Cleveland, and Im still at risk of running into issues because we all know that most turnkey properties aren't actually turnkey, they're lipstick on a pig. Im more interested to learn what I can maybe change or improve to make BRRRR strategy work, not change strategy completely where I can buy maybe 1 property a year instead of 3-4. 

well you might want to take a look at the new crop of Turnkey the folks i do business there are hardly lip sticks on pigs.. I know I fund the deals and pay for the rehab . my clients put on brand new roofs  new panels all new wiring new plumbing windows siding cabinets etc etc.. I mean I see it since i am paying for it to the tune of 250k to 300k a month.  but i hear ya. you do get what you pay for though and its not a race.. real estate is a long game and to me far more important to buy quality assets then taking 2 steps forward and 1 backward.. you may want to try both and see how they play out.. remote rehab simply is the most risky thing you can do in RE full stop. U have to shop for the deal and compete or deal with wholesalers thats no fun.. you have to make quick discussions etc etc.. with a nice renovated prop you get to buy it have your home inspection and understand what your buying...  Just sayin.

 @Jay Hinrichs - mind sharing the turnkey operators you might recommend? 

[Engelo Rumora]

Quote from @John Fleming:

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Bob Stevens:

Quote from @Luka Jozic:

Hi everyone, I started investing in Cleveland about a year and a half ago and have acquired 6 LTRs (SFH and MFH) using mainly the BRRRR method in C areas. I've done fairly big renovations where in most cases, Im replacing almost everything in/on the house. First year has been tons of learning and despite all the research and preparation I did, I still did mistakes and learned things the hard way. I went with one of the biggest PMs that everybody vouched for, yet it took them forever to even place a tenant, and once they did, the tenants never paid on time. Additionally, despite the houses being newly renovated, every month there were new expenses and something breaking, almost as if they want me to not cashflow. The PM said they don't up-charge, but most repairs and expenses were ridiculously high. The result of this? No cashflow, in fact Im in the negative for almost every property so far, and yes I do put aside money for vacancies, capex, and repairs. I finally switched PMs recently and the new one seems much better but Im still getting pretty frequent repairs though much cheaper than the previous PM. The problem is that in this market, getting $2-300 a month cashflow is about as good as it gets, and one furnace, one turnover or whatever and that takes out the cashflow for that year, or even puts you in the negative.

Lets just say the experience hasn't been great, yet. Im trying to stay hopeful that it will turn around but I just keep receiving blow after blow. Just recently got hit with a 10K sewer line repair. I know, its my fault I didn't inspect the sewer line but in my defense, having such inspection contingencies makes it nearly impossible to find a viable BRRRR deal, as there are several investors lined up ready to pay more, in cash, and no contingencies. Im now starting to doubt wether or not Cleveland is actually a good market to invest in? Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit. On paper it looks good, but the reality is a different story. Im wondering if other markets might be better, with somewhat newer houses and higher quality tenants? But the thing with those markets are you'd be happy to break even, so even if repairs are less and tenant quality is better, I feel like it would end up being the same result.

For those of you that invest in Cleveland, do you have similar experiences? If not, what do you think you might be doing differently to make it work better?

' 

 I TRIED to help you but you " know better". I get on avg 800 per month NET income 15- 20% NET (based on cash purchases) on SF, and more on my duplex's. My maintenance is little to nothing as we do the reno correctly. I also tried to help you with PM I'm aware of them all 99% are terrible and will charge you 3k to replace a furnace when the real cost is about 1600. I just got $900 for a 1 br in East Cleveland. I'm going to get 1500 for a 3 br in Lee Harvard, fully renovated all in 75k, do the math :) 

All the best 

Im not interested in buying turnkey and also not buying cash, I would run out of money real quick. I need to be doing BRRRR thats the only way to scale somewhat fast. Im glad you're doing good.

but if your negative cash flow your bleeding your money anyways.. instead of buying a property in a better local that is rehabbed better than you can do. And actually being cash positive instead of negative at least your post says your cash negative not making any money so you are eroding your cash by feeding these.. not to mention the incredible risk you take with remote rehab and the time involved .. If your paying cash to buy and rehab then refinancing I get that.. but your still paying for two closing costs. And if you finance the buy then you have money there.. just some things to think about.

Thats fair but Im assuming there is a little bit of a learning curve before you get it right? If I buy turnkey, Im putting 25% down on any property, which is like 30-45K in Cleveland, and Im still at risk of running into issues because we all know that most turnkey properties aren't actually turnkey, they're lipstick on a pig. Im more interested to learn what I can maybe change or improve to make BRRRR strategy work, not change strategy completely where I can buy maybe 1 property a year instead of 3-4. 

well you might want to take a look at the new crop of Turnkey the folks i do business there are hardly lip sticks on pigs.. I know I fund the deals and pay for the rehab . my clients put on brand new roofs  new panels all new wiring new plumbing windows siding cabinets etc etc.. I mean I see it since i am paying for it to the tune of 250k to 300k a month.  but i hear ya. you do get what you pay for though and its not a race.. real estate is a long game and to me far more important to buy quality assets then taking 2 steps forward and 1 backward.. you may want to try both and see how they play out.. remote rehab simply is the most risky thing you can do in RE full stop. U have to shop for the deal and compete or deal with wholesalers thats no fun.. you have to make quick discussions etc etc.. with a nice renovated prop you get to buy it have your home inspection and understand what your buying...  Just sayin.

 @Jay Hinrichs - mind sharing the turnkey operators you might recommend? 

I don't think you can go wrong with any of these 3:

REI Nation
JWB
Spartan Invest

They have all stood the test of time and I if i ever win the powerball, I'll "throw" money and own 10 properties with each of them lol 💰

I'd recommend myself but my A$$ is still sore from working with investors so we aren't taking on any new business and are just working with our existing investor base