All Forum Posts by: Jeffrey Hotz

Where in CLE? Zip code helps

The biggest factor that needs to be considered in this market is wage growth. As long as wages grow appropriately with the "inflated" house prices, everything is fine. We saw lower than appropriate housing prices relative to nation wages in the beginning of this housing cycle, obviously with the restricted lending guidelines. Those are opening up, which has been great for the RE market. In a capitalistic society people will always over extend....its in our nature. Don't wait for the next market, you can be profitable in the current if you buy correctly (remember you make money on the buy). It's highly likely that this market will trudge along at a decent rate for years, so if your waiting for a significant crash you might be waiting a while. There will never be a crash like the last one, as economic factors will be different in the next crash, and we have no idea how that will effect the RE industry. I'm not bullish or bearish on the current market, just taking it for what it is until I see indicators that sway me one way or another.

There's a post here that hits it spot on; good wholesalers will eventually shift to a strategy that gives them larger margins and selling to investors isn't ever the highest margin on a deal. I wholesale when the deal or price point doesn't make sense for me to purchase outright, which generally leads to crappy wholesale deals, unfortunately. There's a lot of people out there that have no idea of ARV calculations or costs involved at all, and simply think any house they put under contract is going to bet them thousands. Not the case, cash buyers aren't stupid. Message me for a couple no nonsense wholesalers in Cleveland.

Brokerlessmls.com, I've used it in the past in CLE before I got my license.

Just figured I'd add to the turn key comment I just posted since I put that out there and should backtrack a little. Not all sell POS, and not all hire crackhead contractor, and not all put questionable management in place. But I've never seen anything be a deal more than something that's awfully close to market price, or higher.

Hey Rick Martin I'm familiar with a few of the markets you mentioned as I've been an active, "boots on the ground" investor in Cleveland, Chicago and about to move to Columbus. These markets are all different and I'd certainly advise to take a look and focus on one. There are positives and negatives to all, and a lot has to do with your business model and what type of rental investment you can stomach. Pick one and start working it! Concerning turn-key, I'm going to get killed for this statement, but I've never seen many sell anything turn key that was much of a deal. Go ahead with the comments, but I'm sticking by the statement. I've sold crap to turn key companies and have seen the package it into a polished turd. From what I've seen they all sell you a POS, hire a crackhead to update, put questionable management in place and call it turn key. Don't know how someone can sleep with this business model.

Hey Garth Kukla Brad Weber is my business partner in CLE, but I'd wonder where the home is in Euclid as we would close on it if in the right area. Message me, or Brad and we can help where we can.

In a B area I would certainly estimate more for on-going maintenance, and reality is since it's more on the equity scale of investing your cap rates are appropriate. I don't use cap rates to calculate as they don't really mean anything to me, more than the amount of $$ in my pocket at the end of the month. Areas span from equity down to income and clientele certainly changes with that. For higher end rentals your going to have a client that requests a certain level of quality, and will call more often with issues than a D class rental. Hard to say at all whether this is a good deal or not as a lot of that question has to do with your business model and what your looking for. I'd also ask about on-going property management and if this is something you're familiar with managing? It's something most most don't add in, but a good property manager is worth the $$ all day long. Otherwise you should look at the the time value of money here and if worth your effort more than another investment strategy. This may look like a 8% on paper, but quickly can become a 2 or 3%, or less. I know everyone wants to be a RE mogul, but I'd say more often than not the return is higher if you simply use that down payment in an index fund and spend your weekend doing something other than cleaning up a mess the tenant left. My 2 cents really, take it for what it is.

Brad Weber

Hey Steve, looking for another? I'm about to have a 3/2 in Antioch.