All Forum Posts by: Karan Singh

Thanks for sharing your experience. I didn't buy in Cleveland but bought in Indianapolis Class C in 2023. I've had similar experiences with a SFH I've owned for a year, repairs called in 7 times out of 9 months.

I'm not buying anymore Class C properties in Indianapolis or anywhere. I put in 3% for appreciation (which is typical for Indy outside of 2018-2022) and 4% rent increases. I don't know anything about Cleveland. What did you put in for appreciation and rent increases per year when you ran your numbers?

If I were you, I would pause and re-evaluate and not put any offers on Class C properties anymore, especially OOS. I think it's better to have fewer high quality properties than lots of inexpensive ones (all those cap ex, repairs, tenants, PM fees). Could selling off those properties and buying one or two properties in appreciating areas be an option? What about buying near where you live?

Im sorry to hear that, I did consider Indianapolis as well. I don't really consider appreciation as I consider it just a bonus, especially in a cashflow market.

I am definitely going to pause and stabilize before I continue. Majority of my issues were with my prior PM and since switching it has been much better. Although I've still seen some unlucky major repairs, most of my houses are literally running out of things that could break. So like someone else said earlier, it might take 1-2 years for things to stabilize a little.

I live in Tampa so LTR just doesn't work here, some people do rent by room which could have its own issues, but at least this is a market with more qualified tenants where people actually want to live, so I'll consider it. As far as appreciation, and someone can correct me if Im wrong but looking at all the common markets over an 8 year span, its about the same for all of them. However, appreciation on a property in Tampa is of course more cash than a property in Cleveland, but also more to get into it.

To be honest, many of us were influenced by the "cash flow" gurus/agents pushing properties in these areas, and now we're facing the consequences.

It's wise to pause and reassess. Walking away from a property after significant investment is tough, but beware of the sunk cost fallacy. Have you visited all your properties since purchasing them? It's crucial to evaluate each property's long-term viability in person. Develop a turnaround plan for each one and commit to it. Avoid relying on things like hoping that the Fed will lower rates to boost prices—this isn't investing; it's speculative hoping. Stick to your plan. You might need to accept losses on some properties, but sometimes that's the cost of learning.

I'm glad you found a better property manager. Another suggestion is to consider managing the worst properties yourself from out of state. This is more feasible today than ever before. To do this successfully, you'll need to find reliable and cost-effective contractors and tradespeople. This approach can help mitigate losses by increasing your margins. With enough properties, the savings could justify quarterly visits for inspections and lump-sum repairs.

Best of luck and I really hope things work out for you.

1 Vote

Cleveland, Ohio

Quote from @Eric Gerakos:

Quote from @Luka Jozic:

Quote from @Jay Hinrichs:

Quote from @Luka Jozic:

Quote from @Bob Stevens:

Quote from @Luka Jozic:

Hi everyone, I started investing in Cleveland about a year and a half ago and have acquired 6 LTRs (SFH and MFH) using mainly the BRRRR method in C areas. I've done fairly big renovations where in most cases, Im replacing almost everything in/on the house. First year has been tons of learning and despite all the research and preparation I did, I still did mistakes and learned things the hard way. I went with one of the biggest PMs that everybody vouched for, yet it took them forever to even place a tenant, and once they did, the tenants never paid on time. Additionally, despite the houses being newly renovated, every month there were new expenses and something breaking, almost as if they want me to not cashflow. The PM said they don't up-charge, but most repairs and expenses were ridiculously high. The result of this? No cashflow, in fact Im in the negative for almost every property so far, and yes I do put aside money for vacancies, capex, and repairs. I finally switched PMs recently and the new one seems much better but Im still getting pretty frequent repairs though much cheaper than the previous PM. The problem is that in this market, getting $2-300 a month cashflow is about as good as it gets, and one furnace, one turnover or whatever and that takes out the cashflow for that year, or even puts you in the negative.

Lets just say the experience hasn't been great, yet. Im trying to stay hopeful that it will turn around but I just keep receiving blow after blow. Just recently got hit with a 10K sewer line repair. I know, its my fault I didn't inspect the sewer line but in my defense, having such inspection contingencies makes it nearly impossible to find a viable BRRRR deal, as there are several investors lined up ready to pay more, in cash, and no contingencies. Im now starting to doubt wether or not Cleveland is actually a good market to invest in? Majority of the houses are old and require frequent repairs in addition to a poor tenant base that can't pay on time and don't care about their credit. On paper it looks good, but the reality is a different story. Im wondering if other markets might be better, with somewhat newer houses and higher quality tenants? But the thing with those markets are you'd be happy to break even, so even if repairs are less and tenant quality is better, I feel like it would end up being the same result.

For those of you that invest in Cleveland, do you have similar experiences? If not, what do you think you might be doing differently to make it work better?

I TRIED to help you but you " know better". I get on avg 800 per month NET income 15- 20% NET (based on cash purchases) on SF, and more on my duplex's. My maintenance is little to nothing as we do the reno correctly. I also tried to help you with PM I'm aware of them all 99% are terrible and will charge you 3k to replace a furnace when the real cost is about 1600. I just got $900 for a 1 br in East Cleveland. I'm going to get 1500 for a 3 br in Lee Harvard, fully renovated all in 75k, do the math :)

All the best

Im not interested in buying turnkey and also not buying cash, I would run out of money real quick. I need to be doing BRRRR thats the only way to scale somewhat fast. Im glad you're doing good.

but if your negative cash flow your bleeding your money anyways.. instead of buying a property in a better local that is rehabbed better than you can do. And actually being cash positive instead of negative at least your post says your cash negative not making any money so you are eroding your cash by feeding these.. not to mention the incredible risk you take with remote rehab and the time involved .. If your paying cash to buy and rehab then refinancing I get that.. but your still paying for two closing costs. And if you finance the buy then you have money there.. just some things to think about.

Thats fair but Im assuming there is a little bit of a learning curve before you get it right? If I buy turnkey, Im putting 25% down on any property, which is like 30-45K in Cleveland, and Im still at risk of running into issues because we all know that most turnkey properties aren't actually turnkey, they're lipstick on a pig. Im more interested to learn what I can maybe change or improve to make BRRRR strategy work, not change strategy completely where I can buy maybe 1 property a year instead of 3-4.

You’re right. Keep your focus on how many crappy properties you can buy each year, instead of buying fewer but better properties. Focus on “scaling quickly.” Collect properties instead of money. It’s a winning strategy…..

This type of tone and condensing answer is unnecessary. The guy is already losing a lot of money and asking for help. He's been fairly polite in his questions/answers, so if you don't have anything useful to say then perhaps not say anything at all.

2 Votes

Cleveland, Ohio

Is there a filter or reporting system to remove spammers in forums?

I'm noticing real estate agents and some others are spamming every post and it's really ruining the the quality of the discussion.

Every question or discussion ends up being 30 agents spamming with "my market is best". Out of 20-30 replies in a post, 15-20 will be spam. They are so blatant that they copy paste almost the same message.

I've tried reporting these with the current way and it's not having any impact.

8 Votes

Hi @Account Closed,

I was wondering how you fund good general contractors. I've had no luck asking people I know, looking on yelp and asking on BP for recommendations.

I've been asking apartment complex PMs for recommendations but have had 0 luck when I call those GCs as well.

0 Votes

Just buy a 18 month CD from Fidelity. They give 5.35%. That'll get you 10k right there without having to do any work. Then think about the advice given and take your time making the right decision.

6 Votes

Los Angeles County, California

Quote from @Account Closed:

Quote from @Rhyna Orillaneda:

Hi all,

Wanted to get your inputs.

Background about me..

My primary home is in San Jose, Ca which has appreciated a lot. I also converted my garage to an ADU (permitted) and is renting very well.

I’m a busy mom with 2 kids. Part time W2 job. Husband has a full time W2 job.

I have $100,000 to start. My goal is long term. Not much on cash flow.

Choosing between California, Nevada and Arizona.
It would be amazing to have your inputs. I built my ADU through my own research and inputs here and the info here is so amazing!!!

Nice day to all!

Rhyna

I'm in Scottsdale, so I'm biased for Arizona. We moved here from Seattle for a reason . . . investing. We looked at CA and found it wanting for good deals.

Whichever state you decide to invest in, you may want to consider using off market strategies utilizing creative finance. Instead of 20% per property it's closer to 5%. That means your investment dollars are multiplied.

@Account Closed you mentioned you moved to phx and I am curious why. Was the for cheaper primary residence or investments?

How do you like the phx area?
If you had 100k to Invest, which zip codes/cities would you do it in?

Have you invested in multi family In phx? Are you seeing a flood Of new inventory as the news reports are saying?

0 Votes

San Jose, California

Prices are extremely high and interest rates exacerbate the problem.

Deal flow. I am looking for multi family properties in Phoenix area and everything on loop net/zillow are either terrible or over priced.

Knowledge. Not sure what other sites I should look at. Going to begin reaching out to commercial brokers, since I keep hearing there is a flood of inventory coming to the area but it doesn't seem to be effecting prices. The new listings I have seen are laughably expensive (mortgage is 2x rents for example).

CurrentlY in california but refuse to invest here any further due to extreme difficulty in finding contractors and dealing with cities.

7 Votes

Hi @Bonnie Low,

could you please DM the details. I'd love to join.

0 Votes

Milwaukee, Wisconsin

Hello BP Community,

I have a home (CA) in the Stockton/ San Jaoquin county area (specifically tracy) that I'm converting into an Duplex.

I already worked with an architect and had the plans approved by the city.

I'm currently in need of a licensed general contractor and an electrician. I already have a hvac/plumber lined up. I would really appreciate any reliable recommendations. I've found that most yelp reviews for contractors are fake or to few in number to be reliable.

0 Votes

Stockton, California

Quote from @Clayton Silva:

Recently had a mindset shift here in CA when a successful investor told me about how he gets good cashflow in CA. He buys nice homes (700k range and adds ADUs to them for around 100-120k) All in he's at 800k and he will generate between 6-7k/month in gross rent which usually nets him around 1k/month in true cash flow. He also gets to enjoy California's low property taxes and high appreciation which has worked well for him. But I work with investors all over the country that are still getting great cash flow in many markets, they are just getting creative! Personally, I get great cashflow in my NC markets that I invest in, and have gotten to enjoy a lot of the appreciation there as well.

@Clayton Silva

Would you mind sharing more details around how he gets adu build cost that low? I haven't seen anything under 200-250k all in cost

1 Vote

Cedar Rapids, Iowa

All Forum Posts by: Karan Singh

Karan Singh has started 2 posts and replied 12 times.

Post: Experience of OOS investing in Cleveland after 1.5 years.

Post: Experience of OOS investing in Cleveland after 1.5 years.

Post: Filter to remove spammers in forums

Post: Found Deals Off Market - Here's How

Post: What to do with 2 million

Post: CA, Nevada, or Arizona?

Post: What’s keeping you from investing in real estate right now?

Post: Looking to connect with MTR owners or managers in Milwaukee

Post: Reliable Contractor recommendations

Post: Cash Flowing Rental Property Still Exists!!!