All Forum Posts by: Account Closed

@Chelsea Jeffers - I've been in Cleveland for several years and it's one of our best performing areas. Our rent collection is near 100% even with COVID-19 and we have no plans to stop buying. Happy to help in anyway I can.

@Virginia Damato - as a hard money lender myself (not a broker) you will see all different ranges, but expect to be 2-5 points and 10-15% interest depending on your experience and credit profile. Hard money is not cheap money.

Do you have a deal that you want to execute on and just need financing or are you looking for deals now?

@Fady Riad - Welcome to BP. One thing I've learned through the past 11+ years of investing is that there are diminishing returns with respect to underwriting. Your returns are going to be a function of how well you (or your PM) operate the building. Use underwriting to avoid big mistakes, but focus on finding a good place to get started. Part of my portfolio is in Cleveland so please reach out if you have specific questions. 

@Terry Louwerse - First, congrats on managing yourself to a strong financial position. Second, I would suggest you look at Cleveland as well. At this price point you can get into Class B areas with strong yields.

As I tell everyone starting with out of state investing your team on the ground is more important than the underwriting on a particular property. I'm happy to connect and help in any way I can (my company has 33 apartments in Cleveland currently).

@Charles Trimmer - welcome to BP. You'll find a wealth of knowledge on this forum. I love the enthusiasm and ambition - don't lose it. In short, the only way to get experience in real estate is by getting experience. I bought my first duplex at 21 - a few notes:

1) You will make mistakes. Understand this and learn from them. After 10+ years of investing I still keep a journal to record my mistakes, why I made them, how I can learn from them. 

2) Get into action. Real estate is fun to think about, but actually moving the gears is hard. Make the decision to buy a place and start out with one. Learn what it means to be a landlord and decide if you want to go from there. A lot of people quickly realize this is a tough business after their first property. 

3) Always network like hell. Do exactly what you started doing. Meet people from all elements of a deal (brokers, property managers, mortgage brokers, insurance agents, attorneys). Build up that contact list.

Search the forums for any questions you may have - chances are it is already answered. 

Good luck,

JC

@Jonathan K. - One thing I through the years is that your success with out of state investing is a function of your people management skills, not your underwriting skills. As long as you don't make a careless mistake during the purchase your yield is only as good as the people on the ground and your ability to optimize a team. 

Having said that in order to get the right people you need to think about scale. If your goal is to have one duplex and expect that it is perfectly managed by the best people that is unrealistic. You simply do not provide PMs enough opportunity to make money. If your goal is to scale than you are positioned to get better talent. 

Regarding Cleveland I am a big fan. My partner and I invest in several different cities through the US and Cleveland is our best performing. As of today we are at 33 apartments mostly concentrated on the west side. DM me and I'm happy to get on a call to help as much as I can.

@Nick Troutman my .02:

With real estate there are more variables at play than the stock market. For example: are you just starting out or do you have an existing operation (buying your first couple places or already have scale)?, what is your financing strategy (are you already at a low LTV, have cash, have access to quality debt)?, do you feel you have an advantage with sourcing (direct communications, brokers, existing deal pipeline, etc)?, are you in a high dollar per unit area or a low dollar per unit area (Cleveland vs Boston)?, etc. Based on those answers it might be a good time to buy or a bad time to buy.

Personally I am doing two things:

1) working on a portfolio loan to raise my LTV to ~70% (I've been conservative at < 50% LTV for the past few years).

2) being opportunistic if I can source off market deals adjacent to properties I already own or find motivated sellers in areas that I know.

I’m short, if you have a mature operation in a market I would consider that a competitive advantage moving forward and would not get caught in the binary mindset of I either need to buy or I need to wait. Keep the system oiled.

FWIW - my operation is mostly in Cleveland I still see deals to be had.

@Abe McLaurin - the Downtown Cleveland Alliance’s mission statement is to get downtown resident population to 20k (an important number when lobbying for investment throughout the country). https://www.downtowncleveland.com/. Until COVID we were on pace to hit it this year (we’ll see where we end up). By comparison Columbus has a downtown population of 10k.

Cleveland has best in class healthcare institutions (Cleveland Clinic, University Health, Metro) and I wouldn’t be shocked if funding to them increased significantly over the next years due to this pandemic. The city also has an emerging technology/ and biotech industry to reposition away from manufacturing.

Check out home prices over the past 5 years as well. Some hot areas are Ohio City, Tremont, Detroit-Shoreway - you’ll see significant appreciation in addition to significant cash flow.

Local government is also very focused on pushing the city forward. I’ve had productive conversations with council and reps to ensure the city keeps moving forward.

@Abe McLaurin - I’m biased towards Cleveland. I enjoy visiting the city, see great returns, and the city is working on its brand. Great medical and technology community. On the population front Cleveland’s number is starting to stabilize and downtown is chasing 20k residents.

@Jordan Medwin - I’m a big fan of Ohio and Cleveland specifically. One thing with out of state investing - your returns are more a function people management skills than underwriting skills. Go where your network is.

I’ve been in Cleveland for 3 years and you can get your hands on significant cash flow. Happy to chat more (up to 33 apartments Class B - C).