All Forum Posts by: Don Petrasek

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@Billy Maloney  There is seasonality in the Cleveland market for sure and good renters get harder to find as it gets closer to the Holidays and its harder to get people to come and look when its cold & snowing....but if you've had your houses up for rent since September, something is wrong.  Just had the upper half of my two family in Lakewood go vacant at the end of November and I had a deposit from a well qualified new tenant by mid-December (not moving in til Feb 1st though).  I'd be happy to look at the details and point out anything that I see as a problem.....just shoot me a message.  

@Andrew Faukner Carolina is right, leave it at the property rather than bringing it home...some place out of the way so tenants don't wind up throwing it out or using it as floor mats.  I also always try to leave paint for every room at the property and make sure its marked with the room it goes in.  Before I started being disciplined about that I'd get a house back and couldn't remember what color/sheen I had on the walls for touch up, so wound up repainting the whole room.  You only do that once or twice before you start taking the time to line materials up for later.  And if you close up the can right, paint will last for a lot longer than you think.  I just opened one up that was over 10 years old & it was fine for the 3 or 4 touch ups I needed it for.

Zander, to add to what Wayne Brooks said - for any property that is vacant in the process of being renovated you need a policy that acknowledges that - typically referred to as Builder Risk or Vacant House coverage.  A standard rental property hazard policy will typically not cover periods where the house is vacant (for more than 30 days or so in between tenants) and/or is being renovated.  Foremost and Diamond State are two companies that issue these policies - you can get them thru many independent agents.  My experience has been that this type of policy is about 3-4x more expensive than a standard rental policy.  

@Caleb Heimsoth as @Federico Gutierrez mentioned you're looking in a relatively solid area but the area North of I-71 East & West of W 130 is stronger and will command $925/$950 for a standard 3 bdrm 1 bath bungalow all day long.  You may get that in the area that you are looking at, but I think you'll be closer to the top end of the market.   I have 4 houses North of I-71 2 East of W 130, 2 West.  $900, $925, $825, getting ready to put one up at $925.  The $825 is way below market - will be increasing.  The others may be a bit below market, but I've found that being slightly below market = rent faster and stronger longer term tenants which in the end equals a better return for me.

Hi Kevin, I know a guy who managed maintenance for a 40+ unit Lakewood building and now does maintenance work for a major hotel downtown.  He's looking for side work so would likely be a good fit for you.  PM me if you want his contact info

@Jared Vidales a real estate agent who is active in Brook Park can do a better job at estimating value than I can, but it looks like $110,000- $115,000 to me which I think was about the value range we talked about when we first discussed this property.   I've got a flip in progress in Fairview Park so have been watching that city closely (west side not far from Brook Park) especially the lower end of the market (<$150K).  Houses there that are either totally renovated or have obviously been kept updated are going pending in a week or two at premium prices.....looks like pent up demand.  In general we get a little market surge here when the weather warms up in the Spring so I expect values to stay stronger if not inch up further.

@Jared Vidales  Congratulations on putting this deal together.  Very nice rehab- looks like you now have a high quality rental in a limited inventory market.  Also a huge equity gain that I almost never see local investors achieve.  

couldn't agree more with @Account Closed's last paragraph - good tenants stay in good properties at least a few years.  

My current situation with west side Cleveland/suburb properties that I'd characterize as B/C in good to excellent condition with slightly below market rents ($25/unit):

Single family 44111 = 6 year tenant

Single family 44135 = 2 year tenant

Single family 44111 = new tenant, 1 year prior to that- boyfriend/girlfriend move out because they broke up.

Condo 44070 = 1 1/2 year tenant

Two family 44107 = downstairs 6 1/2 years, upstairs 1 year - 2 year tenant prior to that

A few additional comments:

•  time of year you have property on rental market makes a huge difference.  I rent month to month because I like the flexibility it provides in terms of asking people to leave without having to prove that they did something wrong.....the downside of that is I end up getting houses back in November/December which always means I'm going to lose 1 1/2 to 2 months rent.
• not going to say finding a good tenant in a week is impossible, but in my experience I get inundated with the people who have a history of evictions and other undesirable activity during the 1st week the listing is up, followed by a wave of much better qualified prospects.  I feel like the first group races to the new listings hoping they can catch landlords who aren't paying attention or screening well....in Cleveland, I'd say I average at least 40 inquiries before I get a rental agreement signed (the last house was over 60).

@Bill Pate is spot on.  Buy real estate as soon as you can, the longer you wait the more of the power to accumulate wealth you give up.  I wish I would have started investing 10 years sooner than I did, no doubt my cashflow would be at least double what it is now if I had.   The good thing about real estate is that time fixes most mistakes.  I bought a few properties during the peak of the market 2004-2006 which pretty quickly went underwater shortly thereafter.  Today 2 are paid for and the 1 that still has a mortgage on it has about a $100/month cashflow due to rent increases.