All Forum Posts by: Lincoln Coverdale

We have properties in Cleveland Heights and have been very happy with them. There are no brick triplexes currently for sale in the MLS for Cleveland Heights, though there are probably some off market options. The biggest thing you want to be careful of in CH is making sure you are in CH Schools. Some of the areas fall into East Cleveland Schools, which can have a significant impact on value and rents.

@Clay Mckissack - Congrats.  I live and invest in the Heights as well.  I am happy to connect.

@Marc DeLeonibus - We own a few properties in CH.  In my experience the CH rental market is very stable, which makes the math very simple.  We buy and renovate for less than $75,000 all in and rent between $1250-$1350.  You may have to get the taxes adjusted based on the purchase price but those numbers have worked well and should net you $250-$350 per property per month.  I haven't seen a $100,000 property that has positive cash flow with $1300/month in rent, the taxes are too high.

@Brian Jones - Robert has a good point about the POS system and how it affects investors abilities to get deals.  I would also consider the grade of property you have been making offers on.  Even at the $100K-$150K price point many of these homes are behind on maintenance and could have major expenses looming.  Below that price homes may be not worth much at all.  For us and our clients we work on the rule of 10.  For every one property that works out, we have looked at 10.  For every property we have looked at we have analyzed 10.  So for every 100 properties we see online we hope to get 1 good investment.  It's a lot of time and energy but having a bad portfolio of homes is much worse than missing a few deals.  

Good Luck

@John Koster - Thanks, we are maxed on personal.  

@John Koster - were those personal or commercial? I want to stay in our LLC.

Thanks,

Hep BP peeps,

I posted a similar thread a few years ago and am back in a similar situation. Here in Northeast Ohio (specifically the near east side of Cleveland) SFR B/B+ rentals work great with the following model:

SFR: 3 bedroom 1.5-2 baths

Purchase and renovation: $60K to $75K all in 

Rent: $1200-$1350/ month 

Our Property taxes are very high so this nets us around $250-$350 per month after expenses and escrows.  

My problem is finding financing for more homes. We are at our limit for traditional loans (debt to income limited). I have looked at all kinds of lenders and I can't find anyone will loan on a $40K-$60K purchase price. I've looked at bundling homes, but timing is usually an issue not to mention the extra cash, we like buying and stabilizing one at a time. We don't have enough equity in our portfolio for a line of credit and already have one on our primary residence. I can sustain a 7-10% interest rate at a 30 year am. schedule with a 75% LTV and still meet our model.

What other options do I have to get financing so we can buy more homes in this range?

TIA

Lincoln

@Jake Baron - our experience is that 8% is about as good as it gets.  We have seen lots of advertised 10% rates, but when you run the actual numbers, not the expected numbers they come out 6-8%.  I'm happy to help further, just drop me a DM.  

Scott at Right in Roofing has done dozens of roof repairs and replacements for us in the Heights - http://rightonroofinginc.com/

@Kerry Baird - I was set to form a new LLC and pay for the expedited service, but it now looks like the Short Sale may not be stayed due to slow paperwork on the seller side. We may not be able to purchase the home this round and may have to wait for it to come back next year after foreclosure.