All Forum Posts by: Robert Matelski

I'm going to field a guess you're talking about 10317. You can try filing a complaint with the City of Cleveland Building & Housing Dept. using this form: http://www.city.cleveland.oh.u... (but good luck getting them to actually deal with it LOL).

More likely than not, you'll just have to wait it out. The fact that it hasn't been foreclosed on from the existing mortgage means the bank probably has done a drive-by assessment and just doesn't even want it. Eventually it will end up in the tax foreclosure auction, at which most likely nobody will buy it, and it will then end up going to the land bank by default. Then they will make the call as to whether it's in such bad shape that it should be torn down, or if it should be offered for sale to someone who will promise to rehab it.

This is all just part of the territory when buying sub-$10K houses in D or F class neighborhoods in Cleveland in this day and age.

There is a TON of demand for rentals in Euclid (and most other suburbs of Cleveland). If the property is priced properly and managed properly, it will rent relatively quickly. The listings that have been up for months are either over-priced for the quality/condition/size of the house/unit, or are managed poorly (e.g., tough for prospective tenants to even get a showing, managers not processing applications in a timely manner, etc.) -- most likely a combination of both. My last turnover in Euclid (on Nicholas Avenue near Euclid High School) was on the market for a week before a qualified tenant was approved and paid her security deposit (Jan. 2020).

Originally posted by @Steven Gesis:

Investment Info:

Large multi-family (5+ units) commercial investment investment in Cleveland.

Purchase price: $850,000
Cash invested: $600,000

Contributors:
Matthew Fritz

A success story for Multi-Family, repositioned the asset, modernized with new kitchens, bathrooms, flooring, paint and much more. Pet-friendly community right outside of the urban core.

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

Right outside of Urban Core - It was something no one else wanted to tackle

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

On-Market Deal

How did you finance this deal?

Conventional Bank Lending (Local Bank)

How did you add value to the deal?

We completely renovated the interior of the property inside and out

We added some modernized signage, we did something unique and painted a giant mural on the building highlighting its proximity to all major venues around town.

We added a dog park. We repaved the drive and parking lot. Cleaned up the exterior, painted the perimeter fence, installed EV, Installed NEW LED Lighting, New HD Security Cameras.

Modernized interior common areas and all the interiors of units with quartz, tile, more.

What was the outcome?

We have an unbelievable response for applications and it has been a huge success

Lessons learned? Challenges?

This building was old........ the lesson learned was budget, budget, and budget..... construction overruns are always a lesson learned, but here it was a challenge due to the age of the building, but we pulled it off.

 Nice job! That's at E. 55th and Payne, right? I've always thought that was a cool building.

So far I've had 2 of my Cleveland proper properties get the random inspection... both passed with no issues. I think as long as a house is properly maintained in general it is unlikely to fail. If one's property has peeling paint, gutters with saplings growing, loose railings, majorly cracked up driveways/walks, and other slummy type characteristics it's more likely to fail. I had to laugh that they did a lead dust test at the most recent house of mine that they inspected... which was built in 1991. I thought about writing a letter to the mayor of Cleveland asking them to please not waste money testing for lead on houses built a decade after lead paint was discontinued/outlawed... but decided not to because that might make me a target for retaliation in the future LOL 

If you love living in Cleveland then stay in Cleveland for sure. There are tons of investors literally all over the world who are fawning over the Cleveland market in 2020 and wishing they could be physically closer to more easily get in on the excellent opportunities there... you've got a huge leg up on so many since you are already there and you like it there! And you have a pretty solid income.

With a credit score in the neighborhood of 600 you actually can usually qualify for an FHA mortgage (though you won't get the best rate, it won't really be that huge of a difference in terms of monthly payment). My advice is to save $$$ for a few more months then in the summer this year get pre-approved for a loan and have your favorite licensed real estate agent start showing you properties. If you're doing FHA you can get in with a down payment of 3.5% plus closing costs... though in a lot of cases you can get the seller to pay at least some, if not all, of the closing costs, especially if you are paying the full asking price and the property has been on the market for a while. Try to find a duplex in good condition in a C-type (or even low B-type) area. Even better if it happens to have one vacant unit and one occupied unit. It has to be in good condition to qualify for FHA but it is ok if the fixtures and finishes are old and dated. Try to stick with duplexes priced at about $100K or less for your first one... you can still find these in places like Garfield Heights, Newburgh Heights, or in Cleveland proper in neighborhoods like North Collinwood (off of Lakeshore Blvd., east of E. 152nd) or maybe Old Brooklyn if you're lucky. The rent from the other unit will cover most if not all of your housing expenses, and you can keep saving more from your job AND building up your credit by paying your mortgage payment on time for a year or two, then you can move out of the place, rent the unit you have been living in, and buy something else (which will be easier the next time around since you will have saved a lot more money and you will have a better credit score by then). Then do it over and over until you have like 10 duplexes.

I would recommend you hire a Cleveland area property manager ASAP and put this into their hands. They can properly secure the house following the tenants' departure, winterize it, coordinate utility account transfers, and source vendors to address anything that needs to be done to the house prior to marketing it for another tenant. Trying to manage this yourself is basically an open invitation for pretty big problems (e.g. break-ins/vandalism, frozen pipes/water damage, etc.) -- failing to hire a property manager in an effort to save some $$$ when you're not local AND you're not intimately familiar with the market is almost always a penny-wise, pound-foolish move.

Hey Jordan, welcome to the site. I live in California, but I have been investing in the Cleveland area for years. I currently own 8 rental properties there.

I've gathered a ton of information on investing in the Cleveland area, and would be happy to share it with you if you are interested. It includes, among other things, a comprehensive map of the Cleveland area, grading each area from A+ down to F, using a consistent, objective and transparent methodology using publicly available data rather than a broad-brush subjective approach. Cleveland and its suburbs have a huge range of quality when it comes to neighborhoods, and this can be one of the things that makes or breaks you. Feel free to add me as a connection and drop me a private message.

I have been having Re/Max Haven Realty manage my properties since 2015 and have found them acceptable. They are fair and honest overall. Sometimes they don't do stuff quite as fast as I would like, but that is probably true of pretty much any sizable PM enterprise in the Cleveland market.

This sounds like they are talking about basement windows. I'm assuming you replaced the windows of the house (most likely wood double hung, which is what the majority of Cleveland houses had originally) with vinyl replacement windows... but did you touch the basement windows? I doubt the city would want you to install glass block windows in any location other than the basement as they pose a risk in a fire since you cannot open or break them to get out of the house. And $2,340 isn't really that bad to satisfy the city's demand. Installing glass block basement windows ordinarily would not be quite that expensive (unless you have a ton of them), but just be glad that's all they are calling for. 

@Jad Boudiab - Thanks for the explanation of your comps timing, that makes a significant difference, and thanks for humoring my feedback.

@Art Perkitny - Thanks for the thorough explanation on the modifiable areal unit problem... this is something I have sort of understood and have been long troubled by, but I never knew it actually had a name! Also thanks for listing out the metrics that you used in your own grading model... these aren't too far off from what I used in mine (albeit in a less sophisticated manner than you).