All Forum Posts by: David Terbeek

Chris- What questions could I answer for you?  

This is a really good string as it shows the difficulty in actually assessing a vacancy rate and even defining what it means.  I have tried to use our data to calculate this a couple times but the limited data mining tools we have available has not yielded any results that I could share with any confidence. 

Given that, I have worked with hundreds of investors in the past. The assumptions they use seem hover in the 5-10% rate. This seems to be consistent with the comments already posted on the subject. Personally, I used 5% on SFR in the suburbs and 10% on mult-family /SFR in the city when I create pro-forma financials.

I do like how @Account Closed calculated it out, then it is just an assumption to the length of tenancy.

Emanuel-  I sent you a PM with an idea.

If you were doing a rental, you could likely get away without the garage but on a flip the garage is essential.  If you are looking at suburban neighborhoods garages are present on 90-95%+ of homes, it is just an expectation.  Commenting on Brad's post, I believe that if the property never had a garage you would not be in violation but if it had a garage at any time, he is correct that you would be in violation.  Factor in the cost of the garage in your planning.

Yehiel-  Don't discount the idea of looking at a property as if you were going to live in it (to a certain extent).  Your points should be considered when you compare this unit to the competitor buildings in attracting tenants.  For $650, do the other buildings offer a garage?  Do the other buildings offer porches?  If so, you would likely need to lower your rent a little or you will have a difficult time keeping the building full.

Our experience is that a garage is nice but not essential, however, off street parking is certainly a huge bonus.

The area of Lakewood has a big impact but the 2 bedrooms can run from $600-700 in the city.

@Michelle Juarez  Given your budget, I might check out Collinwood or Old Brooklyn as possible Cleveland neighborhoods.  The tenant pool has shown to be fairly stable for our clients.

The Cleveland area offers solid returns for your buy and hold strategy.  There are a few westside areas in the city such as Westpark, Old Brooklyn, Kamms Corners, Riverside  that are popular with investors we work with as are the many of the suburbs such as Lakewood, Parma, Garfield Heights, Maple Heights, Cleveland Heighs, South Euclid, and Euclid.  Most of the suburbs have a Point of Sale and Rental inspections so there is some added cost but it will help to ensure your property is maintained for the long term.

@Ian M. and @Ryan Zomorodi  You are permitted to file a tax appeal between Jan 1st and Mar 31st every year (you have 2 more months).  This is handled by the Cuyahoga Board of Revisions which is part of the Cuyahoga County Treasurer's office.  You can do this personally but you will need to appear at a hearing so most of my clients use an attorney to file it for them.  I have two different attorneys that do a lot of these, PM for their details.

The value is always considered as of the "tax lien date" which is January 1st of whatever year you are protesting.  If you can establish that it was an Arms Length Transaction between two independent parties they should use the purchase price.  

I say if and should because the board tries to take a stance that an REO transaction is NOT arms length. While I can understand that a sheriff sale could be deemed as a forced transaction (depite the fact that people are openly bidding), there seems to be no rhyme or reason why a REO sold from a (sophisticated) bank using the MLS for marketing is not an arms length transaction. However, be prepared that you may not get all the way down to your purchase price on an REO but you are likely to get some type of reduction.

In your example of $120,000 current tax value and $70,000 purchase, they might come back with an $80,000 or $90,000 value as a compromise.  There are several boards and they also act a bit differently.

Alex-  I don't really get involved in the sales aspect but I can certainly refer you to a great agent and have a list of contractors due to my ongoing property management activities.  If you need help, please PM me.

Btw, we have over 100 clients from Israel so the contractors and agent are well versed in working with foreign buyers.

Welcome to BP.   The first thing I would recommend is to set up alerts for keywords which interest you, maybe "Cleveland" for example.  That will keep you in the loop on local postings.