All Forum Posts by: Robert Matelski

But... that $500 referral bonus that Martel pays you (or anyone) who refers them a client who actually closes a deal makes posting about this over and over and over a potentially lucrative side hustle of sorts, no? I am on Martel's email dist list, though I have never bought a property from them (buying TK isn't my investment model, but I do like to keep tabs on all the players in the Cleveland market). Screenshot of what shows up repeatedly in their promotional emails below.

@Ali Boone I think you might be onto something.

JT, first off, your ambition and ability/willingness to dive into this like you've been doing is admirable and sets you apart from at least 95% of the rest of Gen-Z for sure. I actually bought my first property shortly after graduating from high school myself (oddly enough, in Cleveland as well... though two and a half decades before you), and learned so much in the process. I ended up going to college full-time (on a full ride scholarship) at John Carroll University, which is in a suburb of Cleveland, and the part-time job I had at a supermarket at the time was sufficient to qualify for the mortgage, interestingly. I think it's safe to say I was the only JCU freshman who owned his own house (albeit a dumpy house in a rough neighborhood).

I don't usually recommend that young adults should postpone or skip college... but in your situation I think there may be a clear case for an exception. You seem to have the hustle needed to make it, and you've clearly decided there's a [somewhat] specific direction you want to go (real estate). Assuming you can't go to college completely for free, it's not a bad idea to at least do community college courses, which will cost you less than most people spend on dining out in a year and count toward an eventual bachelors degree somewhere (if you can go for free though, via scholarships, you should take advantage of it for sure). While doing the community college thing, you'll have time to work and hustle hustle hustle. You can get your real estate agent's license in OH or FL (it's really not hard at all... a few online courses and a test that you can almost certainly pass on the first try). Or just work for an investor-focused mortgage broker. Or work for an investor. And while you're doing this, start a YouTube channel to share your story and your progress on your journey (I started one a couple years ago myself, and it has been a great learning experience in and of itself). As long as you have a W2 job of some sort you should be able to qualify for a mortgage fairly easily... buy something cheap and house-hack. Feel free to add me as a connection if you'd like and ping me for advice once you start weighing out some more specific alternatives. The world is your oyster, man... go get it.

I think you are being too modest and are underestimating the growth trajectory of the great city of Columbus, Ohio, Brandon! Between having a large state university, an insurance company HQ, and even some retail brands' home bases, why would anyone want to live anywhere OTHER than Columbus in the coming decades?! They even have multiple direct international flights now (to both Toronto AND Cancun)!! At this point I cannot imagine any scenario in which Columbus does not quickly eclipse Chicago... and also NYC, LA, and of course the San Francisco Bay Area. As for Cleveland... well, it's only a matter of time before Columbus annexes that too... which will finally make it a coastal city!

Great post, Rob! I've had my share of ups and downs with the grind of investing in residential real estate, but have had pretty solid success with it overall (continuing to take 3 steps forward and then one or two steps back keeps on moving you forward as long as you stay in the game and keep learning along the way). 

It has definitely been a gradual process, slowly adding a property or two to my portfolio each year, but eventually getting to the point where I am now, with a reasonably substantial portfolio (mostly in Cleveland, like yourself). I am starting to explore other markets as well (mostly in TX and FL), likely following a variation of the same model that has worked well for me in Ohio... assembling a team of sorts, adding a property or two at a time. 

But like you said, there is a lack of scalability in continuing to grow by buying a property or two (or even 3 or 4) at a time. The phrase 'what got you here won't get you there' comes to mind. This is why I am pursuing or exploring other arenas now too. For one thing, I am focusing a lot on investor education (and already getting my feet wet), and the opportunities that can come with that stuff; there is definitely a scalable factor when it comes to that, via things like YouTube, course creation, etc. Secondly, I am starting to consider getting into development (or re-development) in this decade. Whether that takes the shape of developing/subdividing land for residential or industrial purposes, doing some new build projects (say, a development of a dozen new construction SFRs to sell off), or repurposing an old mall or warehouse (or whatever) remains to be seen... but I am currently in investigation mode and the wheels are spinning on the topic for sure!

I'm not sure if it's really 'self-righteous', overly simplified, or just misguided, but it irks me when people say that certain markets (e.g., California, Washington, NYC, Austin, etc.) are "appreciation" markets and other markets (e.g., Detroit, Cleveland, Indianapolis, etc.) are "cash flow" markets. 

If you ask someone who bought a house in most parts of Solano County (wedged between San Francisco/Oakland and wine country) back in 2006 how they're enjoying the appreciation, they'll probably give you a snide answer, since their home is just now barely back to what it was worth 15 years ago. And if you ask someone who bought a house in the Tremont neighborhood of Cleveland a couple decades ago if they regret buying there rather than in an "appreciation market", they'll probably just laugh in your face since their house is worth like 3x what they paid for it.

I find most of the sweeping generalizations to be rather problematic, and the "appreciation market" vs. "cash flow market" thing in particular operates under the assumption that [recent] past performance must be the indicator of future results as well.

@Kyle Jones, @John Ramirez, very much appreciate the offer! Might be pinging you guys with questions as I dig more deeply into the Abilene market.

@Dan Maciejewski, thanks for the tip. I didn't have the Tampa area on my radar but perhaps I should check it out too.

@Shirley Wen, that's great... one of my colleagues (here in the Bay Area) recently bought a rental property in TN as well and she is having success with it so far. 

@Tigran Kalaydzhyan, you're kind of my idol then. I think only New Yorkers can come close to Californians in understanding the pain of living in an outrageous income tax locale! Have you found life in a mid-sized city palatable after living in a major global city? Are you doing real estate full-time at this point?  I'm not sure I would want to leave the W2 world just yet, even if I do relocate to TX, as I am [in theory] in the prime earning years of my career (~10 years post-MBA), so I would probably move to Austin or Dallas if I go that route.

Greetings and Happy New Year, fellow Bigger Pockets members! I am looking to network with anyone in the residential real estate investing food chain throughout Texas and Florida, and would be especially delighted to connect with folks who have personal experience investing in either (or both) of these states. I live in the San Francisco Bay Area, and currently own properties both here and in the greater Cleveland area, so while I am new to these markets I am not new to investing. 

My 2021 plan is to expand into one or more additional markets, focusing on SFRs or potentially small multi-family properties (2-4 units), as buy and hold investments for the long haul. I find TX and FL appealing based on long-term continued growth potential AND the lack of state income tax (I know, I know, as a Californian I am still subject to paying CA state income tax on income derived from tax-free states... but I honestly cannot imagine myself being here forever the way our taxes keep going).

Some of the cities I have been scoping out for strong cash flow potential include Jacksonville, Tallahassee, Abilene, and Wichita Falls, plus a bunch of 'small country town' type places in Texas (e.g., Brownwood). Certainly open to others as well... the year is young and I plan to spend the first sliver of it really getting to know these markets pretty well; I welcome any input anyone may have on these cities or suggestions of others to explore.

(Side note... if you happen to be interested in exploring Cleveland as a market to invest in, feel free to inbox me regarding that topic too, as that's my bread-and-butter market and I have a ton of insight to share.)

Thanks in advance for any tips/info/advice/connections!

Hey Chelsea... from seeing who you worked with to buy your other property recently, it looks like you're working with Haven/Azzam... North Collinwood varies quite a bit, and yes, Haven manages quite a few properties there (including mine). They don't tend to steer their clients majorly wrong so I honestly don't think you need to be too concerned. My North Collinwood properties are solid performers. North Collinwood tends to get better as you progress north/east. Some of the blocks closest to the lake are actually commonly occupied by 6-figure-earning professionals. The difference between a property on Hale Ave. off of E. 140th for example and a property on East Park Dr. off of Lakeshore Blvd. could not be more stark (yet they are both technically North Collinwood). The other commenters probably don't understand how nuanced and variable this neighborhood is. Let google maps (street view) and census data (income, vacancy rate, etc.) be your friend and show you just how bad (or decent) any neighborhood actually is. I have created a map of the Cleveland area that is derived solely from data (rather than anecdotes/opinions) to show risk level for each census tract and would be happy to show you... just inbox me if you're interested.

Hey Carolina... the answer really is "it depends"... and I created a YouTube video specifically on the rather nuanced topic of Cleveland rental property utilities since it comes up rather often... I would be happy to share the link if you inbox me. Generally speaking, for SFRs the tenants pay for all utilities (water/sewer stay in landlord's name but you can bill back to tenants as long as you're not renting to deadbeats), and for Multi-family properties tenants pay for any utilities that have separate meters dedicated for their unit (nearly always electric, and usually gas) and landlord pays anything that is shared (i.e. not separately metered). 

From my perspective, you have to take into account a wide range of parameters to determine the overall grade of an area, using hard and fast verifiable data. The baseline, which would fairly be called a high C grade, would be based on the median value for each parameter (at the MSA or county level), and then a tract that is “better” than the median in each respective parameter would score higher on the grading scale, and a tract that is “worse” than the median in each respective parameter would score lower on the grading scale. (Sort of like a GPA in high school or college, where each “parameter” is basically a course and is graded on a curve with a high C average.)

The grading model that I developed using only objective, measurable data, takes the analysis down to the census tract level. Each census tract in Cuyahoga County was graded using eight parameters, each of which is weighted consistently for each tract in order to ensure complete objectivity and consistency in the process. Each of those parameters, and the respective weighting, is as follows:

1. Median Income (20%)
2. 5-Year Median Income Change (5%)
3. Owner Occupancy Rate (10%)
4. Vacancy Rate (20%)
5. 5-Year Vacancy Rate Change (5%)
6. School District Grade (10%)
7. High School Diploma Holder Rate (15%)
8. Bachelor’s Degree Holder Rate (15%)

I chose NOT to include crime as a parameter in the model, as the measurements of this tend to vary from jurisdiction to jurisdiction, and reporting is not consistent either… but generally speaking crime correlates to the other parameters that ARE included in the model so its exclusion is not particularly problematic.

A few areas within the Cleveland market that are solidly in B territory include all of South Euclid, most of Parma, Parma Heights and Lakewood, much of Cleveland Heights, and portions of Garfield Heights, Shaker Heights, Euclid, Bedford, Bedford Heights, and Maple Heights. (But always keep in mind that even within any of these suburbs not all areas are created equally… some tracts will be B territory, and some will be better or worse.)

If you want to see the full detailed version feel free to inbox me.