All Forum Posts by: Andrew Isaacs

My team has been doing rehabs for the past few years and we recently started consulting with local banks. We haven't come across a bank that is rehabbing their REO inventory so far, but we have suggested it to a couple of them. We offer our expertise, contacts, etc. to help them. So far none of them has taken us up on this offer. BUT, it has proven to be a good opportunity to educate the banks on what is going on in the market and positions us to make an offer on properties in their inventory.

So, I see banks considering rehabbing as a good thing for investors. Most banks are going to want stay within their comfort zone... banking.

I just purchased some E&O insurance from Hanover... marginally related. Hanover Insurance apparently writes a lot of real estate risks and has competitive premiums (in Ohio... no clue what they're like in TX). I'd try to find an agent that sells their stuff.

More related -- for our rehabbing stuff we typically sub it out. When we do, we just get named as additional insureds on the contractor's policy. The types of insurance you need depend on the activities you're going to be engaged in. A good insurance agent should be able to provide the most help... but finding an agent versed in real estate investing activities has been challenging in my experience.

Happy to help if you want to describe what you're doing in a little more detail.

I've been touting the greater Cleveland market as the best rental market based on the relationship between rental income generated and the cost of the property that is going to generate it. This goes to ROI directly and not to appreciation at all.

I have read a couple of articles from Fortune and The WSJ that reported on a Moody's Analytics study from last year (haven't seen one for 2012). The articles are generally geared toward whether "now is a good time to buy" or not. The price-to-rent ratio is an indicator of whether buying or renting is the better choice, but it is also kind of like a P/E ratio for investors.

Here's what the WSJ said...
"Of the 74 housing markets, Baltimore appeared to be the most overvalued. By contrast, prices in Cleveland, the most undervalued market, have returned to 1991 levels based on the price-to-rent ratio."
(full text available at http://online.wsj.com/article/SB10001424052748703313304576132291585938656.html)

[For a better explanation of price-to-rent ratio, see http://online.wsj.com/article/SB70001424052970203914304576630891758741406.html (starting at the 4th paragraph).]

Brian,

I noticed this string is pretty old, but it's so on point I couldn't resist commenting.

... we realized that the Greater Cleveland "METRO" (as Dionte aptly put it) had a tremendous demand for SFR rentals. Rents are very healthy and prices are depressed. So, we did some research... As it turns out, Moody's Analytics found that Cleveland was the "most undervalued major market" in the US based on the price to rent ratio. In other words, we can get a $1,000 per month income property at a lower price in Cleveland than we can in any other city.

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