All Forum Posts by: Robert Matelski

Both Nicholas and Zeman are solid streets. Nicholas off of E. 222nd is somewhat better than Nicholas off of E. 200th. I have a single house on Nicholas and it has been a solid performer.

That is the somewhat better part of Maple Heights. But still not higher than about C+ or so. The area you mentioned is right on the border of Bedford, which helps escalate it a bit.

I just looked up Rehab Kings LLC as an owner in Cuyahoga County... right now they only own a single property in that particular business name. A single house on E 133rd in what's technically Collinwood I guess, but is not at all close to any of the parts of Collinwood that have much rebound potential. This particular property went to the sheriff's sale in 2014. Then it sold for $1,800 on 10/06/2015, then for $10,000 on 09/26/2016, then for $39,000 on 10/18/2016, then for $39,000 on 07/19/2018, then for $2,000 on 02/06/2019, then for $14,000 on 02/20/2019. Though it's not a definite show-stopper for a property to be tossed around like a hot potato and have a bunch of transfers like this, it usually causes me to raise an eyebrow and be at least somewhat suspicious.

For those who have been using leverage to buy rental properties... what interest rate have you been targeting for 15- and 30-year fixed? (Assuming SFR or 2-4 unit, 75% LTV)

I have bought short sales successfully in the Cleveland area (Euclid, and good parts of Cleveland) and elsewhere. Every short sale I have bought has been in decent shape, just in need of some cosmetic work at most. Even the townhouse I live in here in California was a short sale... and I moved in about 3 days after close. You typically get clean title with any short sale. Second (and third and fourth) lienholders will be a part of the negotiation process. In my experience the lienholders who are not first in line are just happy to get anything out of the process, because most likely if it heads to foreclosure (which is almost imminent once a property owner pursues a short sale) the primary lienholder is the only one who will actually get anything out of it. The primary lienholder typically takes the lead in that from what I have seen (most banks have departments dedicated to just doing this). But it is a long, drawn-out process (typically months), which may or may not actually ever close. Now that values are quite a bit higher, it could be tougher, as the comps banks are using when deciding whether to approve the short sale, counter it, etc. are trending higher and higher (but might not be true comps to the property you're trying to buy).

This can't possibly be a serious question, can it? Values in most of the Cleveland area are still below their previous peak values (circa 2006), and one might argue that even those were not crazy values to begin with (except in a few of the rough inner city neighborhoods, and some parts of East Cleveland). In most areas you can still buy a house and achieve the "1% rule". I doubt Cleveland area values will fall again anytime soon. I don't have the hard facts handy at the moment, but isn't the Cleveland market still one of the lowest priced of any major city in the USA?

I have been using Re/Max Haven Realty as my PM for several years, and overall they have been decent. Nothing quite compares to self-managing, in terms of attention to detail, swiftness in turnover, etc., but if you are not going to be local and thus cannot self-manage, Haven is suitable in the Cleveland market.

Soooo... a net loss of 1,062, in a metro area of ~2.75M people hardly seems like cause for major alarm. I would not say the area is hemorrhaging population by any stretch of the imagination. This is more of a very minor paper cut. The region lost .0386% of its population.

The industrial jobs left en masse a while ago, and now there are lots of new jobs in healthcare and other professional sectors... my sense is that those who are leaving these days are less inspired by concerns surrounding employment and more by climate and culture. My hypothesis is that the [extremely small] decline in population in the region is due to a combination of 20-somethings thinking it would be cool to move to NYC, SF, etc., and 60+ year-olds who spent decades shoveling their stoops and scraping ice off of their cars and now want to be in a condo in Boca Raton or Scottsdale.

For reference, in case anyone wants to question where I got the ~2.75M...

Cuyahoga: 1,249,352

Lake: 230,041

Geauga: 93,389

Lorain: 301,356

Medina: 176,395

Portage: 161,419

Summit: 541,781

I think either is fine in the Cleveland market. Personally I have 6 SFRs and 1 duplex in the Cleveland area. I would like to get another duplex or two, but thus far I have not been able to find any more suitable deals on them based on my criteria. Pros and cons of SFRs and MFs (from my perspective) are as follows:

SFR Pros: Less turnover, tenants take care of yard/lawn, more easily able to bill back for water/sewer, easier exit path possible by targeting owner-occupants down the road

SFR Cons: Turnover means you have zero cash flow coming from the property, and one problem tenant can cause you to have many months of zero cash flow coming from the property

MF Pros: More revenue sources (multiple units) so even if you have a turnover you still have some revenue coming in typically, more likely to hear about problems (e.g. tenants love to tell on each other, so if there's someone with a dog who is not supposed to have a dog you will likely hear about it from another tenant)

MF Cons: Typically LL takes care of yard/lawn, often a single water meter so no bill-back possible, greater turnover (though in my one duplex, one of the tenants has been there 10+ years and the other 3+ years), less appealing (though not entirely unappealing) to owner-occupants if you are seeking an exit path eventually

I just looked it up, and it looks like you got a decent deal on the property at least! Once you get them out of there and do some clean-up/renovation (assuming they do not totally trash it on the way out) you can probably flip it and sell to an FHA owner-occupant for $80K+ if you don't want to hold onto it.