All Forum Posts by: Anthony Aviles

@Ben Pielstick Cleveland is a solid middle market city: less susceptible to the price fluctuations of major cities like LA, Denver, and Miami but strong enough economically to support all types of investing strategies for folks seeking cash flow and/or forced appreciation at incredibly reasonable prices. Home to Fortune 500 companies like Sherwin-Williams and Progressive Insurance, strong arts & culture scene, 3 major sports teams, all of which create a healthy demand from renters and owner occupants alike that investors can benefit from.

Many of my clients are out of state investors. They research the Cleveland market, leverage my insight as a local resident and investor friendly agent, obtain third party home inspections to verify condition of the property, and choose a reputable property manager to handle things post acquisition.

@Bob Collett Just had a similar situation this past weekend with a home inspection. We showed up and the owner came out saying they wanted to reschedule because they were sick. The buyer who is relocating from Florida and made arrangements to be present at the inspection would have been pretty frustrated to have to reschedule for an unknown time or even cancel. Fortunately, their agent was able to get them to agree to grant the inspector access. The seller isolated themselves to a room and we were able to get it done. Not always going to play out in our favor but it did in this case. I say try everything you can while being as considerate as possible. At the end of the day, they have to respect the right to access the property with proper notice and not inhibit what the state deems "essential business".

@Account Closed As long as you provide 24 hours notice I don't think they have grounds to deny access. With real estate and appraisals being essential business, it should not be affected by the current lock down. Assure the tenant that the appraiser will be wearing a mask and gloves for everyone's safety, and verify that will be the case with the lender/appraiser. (This is not legal advice, just my opinion)

It's interesting that the risk of non-payment is presumably correlated with a tenant's line of work. e.g. Servers/Bartenders, sports & entertainment venue workers, etc being most affected as opposed to an entry level hospital employee or someone who works at Walmart. Could this affect the way tenants are screened in the future? Is it fair to be biased towards those who work in "essential" businesses as a method of risk mitigation? It also makes a great case for being a section 8 landlord... Thinking really far ahead here but it sure is fascinating.

In the short term, buying for cash flow in areas with strong rental demand, low to moderate crime, and solid household incomes remains the way to invest successfully without retreating at a time like this.

Today the Governor of Ohio issued an executive order requiring Ohio residents to stay home beginning March 23rd at 11:59 PM until April 7th. Thankfully, real estate and other key business have been deemed essential and have permission to continue operating during the executive order.

Page 7, Section U of the order states that the following business will be considered "essential." Professional services, such as legal services, accounting services, insurance services, real estate services (including appraisal and title services) among other obvious establishments like gas stations, grocery stores, and hospitals.

With a complete shut down avoided, what are your concerns, if any, regarding your real estate business, portfolio, or plans to invest?

Evaluate comparable rentals to validate market rent, crime stats to ensure the area is decent. Talk to the home inspector ahead of time, ensure they are unbiased and will provide supplemental photos/videos of the property. Ask for a sample inspection report they've done.

The labor participation rate is around 62%, the lowest since the early 1970's. That makes the low unemployment rate misleading because if you include those folks able but not willing to work, unemployment is actually higher.

Either way, Grant Cardone says "You must buy in all markets", and I agree with him. Can't sit around waiting for the market to tank when that could be years away.

To successfully and comfortably buy today and in the future:

- Run the numbers conservatively

- Buy in areas with strong rental demand

- Don't over-leverage

If the numbers work at acquisition, the property should perform through fluctuations in the market.

Invest that $200k out-of-state where you can acquire 3-7 units that will return 8%-12% on average plus depreciation.

If the numbers work at acquisition, and the neighborhood is attractive to quality tenants, there is no reason to hesitate out of fear of a crash. Running the numbers conservatively and avoiding being over-leveraged will protect you in a wose-case scenario. 

Take advantage of cheaper but thriving markets and build that portfolio!