All Forum Posts by: John Koster

Personal

I have received small loans from Wells Fargo and MB Financial (bought by Firth Third Bank)

If anyone else missed the last meet up and wants to get together for an informal meet up, I am down.   PM me if interested.

After factoring in taxes, insurance, water, sewer, property management, tenant vacancy, rental registration, cap ex and debt service , a $900 rent should earn you $100-400/month cash flow with $400 being the exception. $100-200 is more normal.  I have a house that rents for $850 that has been cash flowing $350-500 every month, but the tenant never calls about maintenance, so I expect a hefty repair bill when the tenant vacates, which will bring my cash flow numbers down to normal.   I think it is important not to talk about gross income as if it is return on investment.   

This thread has turned irrational.  Out of State Investors are not the reason houses are being abandoned in Cleveland.  

Most of the abandoned houses in Cleveland are in neighborhoods where the majority of the houses are not financeable by banks due to low value and/or terrible condition.   Regular Cleveland buyers don't want to purchase these houses, and can't get financing for them even if they did, and local investors know better.   So in walks the OOSI who sees a house for the price of a used car that rents for $750.   He or she rolls the dice and craps out.  Bad move. Bad situation.  But would the property sitting vacant earlier and never being fixed up before it was abandoned be a better situation?

To suggest or infer that if OOSI didn't come in and buy these properties that they would somehow majestically be better taken care of and the quality of the blighted neighborhoods would improve is just silly.  

If OOSI were faced with more regulation, they would eventually go away.  With less investors interested in the area, do you actually think there would be less blight?   With all of these CA and NY investors flooding the area and all of the local investors actively scarfing up properties, why are there still so many abandoned houses?   Because there are too many investors?   Without OSSI, would Cleveland investors really pick up all the slack?  The numbers say, "no". 

Blaming blight on people who invest in your community (successfully or not) is ridiculous and the last thing Cleveland needs is more regulation.   

Hi Jim!

My dad is a retired Architect from Lakewood who may have a few recommendations for you.  I will ask him tomorrow.  Also, I think I know your brother Ken?   We were in the same class at LHS, but met out in Los Angeles.

Cheers,

John

Interesting graphs.   Definitely useful information.  However, as a Cleveland investor who grew up in the area, I would like to point out that there seems to be city/county differences in the statistics listed, where sometimes county information is presented as city information.   There is a big difference between Cleveland proper and the county as a whole.   Without looking up the actual numbers of today, here is the difference based on the above graphs.

Cleveland City 

 - Population - 386,000

 - Median Price - 55K 

Cuyahoga County 

 - Population - 1,250,000

 - Median Price - 155K

I suspect the other statistics such as job growth and unemployment may be switched and/or conflated as well.   Just a heads up for those in active research.

@Sinan M. Feel free to join.  

Los Angeles investors who invest in Cleveland are meeting for happy hour to talk real estate.  Join us if you want to mingle with other new and experienced investors.  This is just an informal hang out.  No presentations will be given.

EP & LP Rooftop Bar 

603 N. La Cienega West Hollywood, CA 90069

I agree with all that is being said about Euclid.  With Amazon coming, the he logic is sound, but I have read twice now that Euclid actually depreciated last year and was the only Cleveland neighborhood to do so.  Can anyone back this up?  Is that true?  Doesn't make sense to me.