All Forum Posts by: Kellan Martz

@Matthew T. Thanks for that info. I was leaning that way myself, glad to see someone has had that experience before me.

Just closed a few weeks ago on my first rental property. SFR in east Cleveland 44128. New roof on the home but most of the property is in average condition. $45k purchase price.

Is the cost of a home warranty worth it, from a company like American Home Shield or Select Home Warranty? The average cost looks to be about $35-50 per month. Anyone with experience, good or bad, care to chime in? Thanks.

Investment Info:

Single-family residence buy & hold investment in Cleveland.

Purchase price: $45,000
Cash invested: $13,000

Single family home in Cleveland, OH 44128.

What made you interested in investing in this type of deal?

Relative low entry cost. Prior experience in real estate and landlord tenant law.

How did you find this deal and how did you negotiate it?

Realtor handled this process.

How did you finance this deal?

Traditional mortgage. 20% down. 1 point in costs, 4.3% interest rate on 30 year.

How did you add value to the deal?

None so far. Will consider changes when the tenants leave (hopefully not for a long time)

What was the outcome?

So far, cash flowing.

Lessons learned? Challenges?

What did I learn?: 1) Be patient. Nothing moves as quickly as you like, especially with a mortgage. But have faith it will get one. 2) Closing costs were a bit higher than expected. I had a budget cushion, so it was fine. But make sure you make room for unexpected costs. 3) I didn't shop around for some mortgage costs that are allowed to be shopped, and you should. I just didn't have time or energy on this smaller deal. 4) Build a good team and respect them.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Wayne Brooks, Azzam Group (realtor). Ivra Basset, Shelter Insurance (insurance broker),

Hi everyone - as they say, slow and steady wins the race and that's the name of the game: SLOW. Part of that is because I'm an impatient person and part of that is because the whole process was relatively slow due to outside factors and people.

Intro: I am a real estate attorney in Los Angeles and have experience in affordable housing development, residential real estate purchase and sale matters, commercial and residential landlord tenant matters etc. I've done this for about 6 years, so I came into this process with a working knowledge. I also had my real estate license for several years but only did a bit of work in that area. Last year I started getting serious on BP, reading more and talking to people, then in March or so, I make the decision to buy. I wanted a market where prices were pretty low, taxes were moderate to low, laws were friendly enough to landlords, etc. I was deciding between Cleveland, Indianapolis, St. Louis, Kansas City, and Memphis. All of these cities made sense in some ways, but at a certain point, I had to get over my analysis paralysis and decided on Cleveland.

Home hunt: I talked to a few realtors in Cleveland and was impressed with Mike Azzam and his agency. He had me work with a realtor in his group named Wayne. I had a very good experience overall with him as well. Being new to this market, it took me some time for us to get in sync with my needs and what was actually available in this area. I appreciated the honesty including zip codes to avoid, the need to increase my budget a bit, etc. We started working together in May 2020 and made about 8-10 offers on properties until this single family home on the east side of Cleveland (zip code 44128) was accepted. The difference in selling agents in Cleveland vs. Los Angeles is noticeable, specifically with the fact that half didn't even respond to questions or offers. In LA, they respond in minutes sometimes.

The house: 3 bedroom, 1 bath, just over 1,000 sq. ft. with tenants in place on a month to month lease. They had been there about 2 years and are staying in the property. I did not use the property manager recommended by my realtor (didn't like the guy or his attitude). Found a few recommendations on BP and signed up with one. The process was pretty simple and so far the PM has been responsive enough and competent. She went out last week to the property and dropped off a welcome package along with an Amazon gift card I bought for the tenants (to try to start out with a good relationship).

The numbers: 13+% cap rate, property taxes $745 per year, tenant pays all utilities, net cash flow $339 per month.

Mortgage: Chemical Bank, friendly but SLOW. I provided everything requested within 24 hours of each request. Underwriting was backed up and took way too long to approve my loan and closing - added about 2 weeks unnecessarily. Not the best rate since it is a small loan, but works for now. Rate is 4.3% with 1 point in costs.

Insurance: I was recommended to call a local agent via BP. Ivra Bassett with Shelter Insurance. I also got quotes from some of the big national names. 100% recommend going with a local person. He made the process simple, got me the rates I needed, visited the property, and also has connections to local people for other services if I need them.

What did I learn?: 1) Be patient. Nothing moves as quickly as you like, especially with a mortgage. But have faith it will get one. 2) Closing costs were a bit higher than expected. I had a budget cushion, so it was fine. But make sure you make room for unexpected costs. 3) I didn't shop around for some mortgage costs that are allowed to be shopped, and you should. I just didn't have time or energy on this smaller deal. 4) Build a good team and respect them. I bought a gift card for both my tenant and my realtor, because I want a great working relationship with them going forward.

If anyone has questions, advice, or comments, I welcome them! I am new to the game so I'd love to hear from experienced people and I'd also love to hear from new people who are thinking about jumping in. Sharing knowledge is what BP is all about. Thanks for reading.

You can generally appeal within a certain time of the new assessment, most of the time the look back seems to be 1-3 years. This all depends on the city you are in, in my experience. Some cities will let you appeal at anytime during the year, other cities have windows of a month or two each year - if you miss the window you need to wait until the following year.  Most taxing authorities will list this info on their websites or call their office to ask. Good luck.

@Nate Klatt Congrats! Renovations look great and that cash flow is great too. I am under contract for a SFR in E. Cleveland as we speak.

Congrats. Good luck on your rental!

Hi all - under contract on my first investment property. Single family home in Cleveland. Would love recommendations on which company you use, which to avoid, and why you like/dislike them.

Also, average yearly cost if you invest in Cleveland would be helpful. Plus what coverages you recommend or think should be avoided. Thanks everyone. Excited to start my personal game of Monopoly!

Hello all:

My offer was accepted last week on a SFR in Cleveland, zip code 44128. This is my first investment property (out of state investor). I am looking for recommendations on a home inspector. I also would like recommendations for a home insurance company. What average costs for an inspection and home insurance do you see?

Separately, any advice on what coverages to get or avoid. And general advice on what mistakes you made on your first (or any) property that I can avoid, please share!

Property: 3 bed, 1 bath, 1050 sq ft, 2 floors, built in the 1940s, new roof. Rented with long term tenants who wish to stay.

Thanks!

@John Koster Thanks. That is very helpful.