All Forum Posts by: Jeff G.

I'm an out-of-state investor. It seems that Akron is a good cash-flow market. What are your rule of thumb areas that you stay away from? Also, what are your pro tips for tenant screening from afar?

What are your tips for starting out with the BRRRR strategy remotely? I'm likely going to BRRRR out-of-state. Yes, I'm aware the 1970's called and their interest rates are back — I'm factoring this into my numbers. Yes, I have David Greene's book on Out-of-State investing. I'm re-reading it now. But the book can't possibly cover everything, so I want to get a discussion going.

Assuming you're hundreds of miles away:

* How do you know what areas to avoid in a city? (Walk the area virtually with Google maps?)
* What is the line between "poor area" that will cash-flow vs. hellhole that will see your property destroyed? (No Flint, Michigan-like areas!)
* How do you know a *real* rock star agent from a pretender?
* How do you vet your PM?

* In general, how do you not get screwed?
* What are red flags to look for?

@Remington Lyman, that makes sense unfortunately. How do I learn to eyeball that? Keep in mind I'm several states away. I assume someone somewhere has a handful of rules of thumb written down that are reasonably accurate for this kind of thing.

@Kim Meredith Hampton, wait, what? So, you go through that process and Section 8 eventually starts to pay you for your new tenant and then won't give you any of the arrearage?

I have my eye on the Cleveland and Akron OH markets for my first rental property. I'm out-of-state, in CT where properties are more expensive and property taxes are extremely high. Those markets caught my eye, not just because of relatively low property prices but because it looks like it would be straightforward to convert the properties to Section 8 rentals and make significantly above market rents in some zip codes. However, I know darned well that appearances can be deceiving.

Can someone please tell me what I don't know — but should — about Section 8 rentals in Ohio?

I've collected the following nuggets of information about Section 8:

* I can't have a property pre-approved for Section 8, I have to wait until I have an otherwise qualified Section 8 applicant in the pipeline.
* The initial approval process takes 1-2 months. So either the property is vacant for 1-2 months OR a Section 8 tenant is coming in to replace a standard tenant.
* Section 8 requires additional inspections.
* Vouchers are sized to bedroom count based upon family size.

These parts more or less make sense. But, now I'm hearing rumors that despite the "fair market rents" published on the Section 8 site it's entirely possible to NOT get anything like the published maximum. Is that accurate and, if so, how do I know enough information ahead of time to factor that into my numbers? My basic plan was to take the published maximum and shave off $50-$100 and target that price point. Now I'm questioning my underlying assumptions. I could really use some clarity here.

Quote from @Tim Delaney:

@Jeff G. I would suggest you re-examine how you are deciding on a market to invest in. I would hope that you used some metric or data point to decide that you were interested in Cleveland in the first place. Don’t then run away because a few people anecdotally said you can’t make money if it snows. I invest in Buffalo, not far from Cleveland, and do well. Not many people are aware, but it snows pretty heavily in Buffalo too 🤣

That's Interesting. I had thought about Syracuse, NY because of the potential for student rentals. That was the other area besides Cleveland where conservative numbers seemed to work well and I could more than one multifamily with my budget.

A recession is inevitable eventaully. So, I'm basically looking for recession proof housing. In my mind that's low income or student housing. I welcome other views though. If anyone here has an example of another niche doing well regardless of the ups and downs of the economy, I'm all ears.

Quote from @Paul Camuto:

Quote from @Jeff G.:

I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."

What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?

 Why are you looking at Cleveland when you are in CT? Have you been onsite to the area? There are no deals that cash flow in CT? I live in NJ very similar to the prices of CT and can find entry homes for under 200K that cash flow in good areas. Why are you looking outside of where you live?

Because, it looks like I might be able buy more properties in OH than CT. That might mean higher cash flow, assuming there isn't something I'm not seeing. So, my question about the snowbelt was more me seeing if this was a more significant factor than was obvious. I wanted to be sure my back of the napkin analysis wasn't misleading me.

I would rather have more properties because it distributes my risk. Turnover hurts less the more doors I have, etc. As for why OH instead of my own back yard. Well, CT is a very blue state. Therefore, taxes are needlessly high. Many property owners pay more in property taxes than they do their mortgages; it's ridiculous.

I have family in MI, so I have driven through parts of OH. Obviously passing through via the Interstate, just stopping for gas, or stopping for food in Sandusky on my way to Cedar Point isn't the same thing as thoroughly driving an area and getting a sense of the neighborhoods. I do intend to drive the area before I start buying up properties there.

Right now, I'm just crunching numbers for things I see on Zillow, using The Ultimate Guide to Grading Cleveland Neighborhoods as a very rough guide, and trying to be as methodical about this as possible.

I'm looking at Cleveland, OH and a bit farther south to Akron, OH for my first rentals. I'm primarily interested in multifamily rentals. My concern is, it looks like Cleveland is part of the Snowbelt. I've seen warnings in other BP posts to the effect, "no matter how good the cash flow looks on paper, if it's in the Snowbelt you will lose money."

What is the situation like on the ground? How badly am I likely to get burned by snow removal costs if I buy in Cleveland? Is Akron better in this regard?

I've got one. I wasn't the landlord, I was the tenant!

I woke up one morning and took a shower only to notice that I didn't have any hot water. Now the hot water tank had been a bit iffy over the past few weeks and so it wasn't too surprising. Not a big deal. I was going to let the landlord know the next time I saw him in person that I suspected the hot water heater was on its last leg. I finished my morning routine and headed out the door to work. The next morning was the same deal: a cold shower. Now this was unusual, up to that point there had only been short periods without hot water. So, I run down to the basement to check on the hot water heater and end up in knee deep water. Bonus... it smelled like raw sewage. Mystery solved.

I called the landlord who promptly called Roto-Rooter. It took them an hour but they eventually pull the cause of the clog from the sewer pipe: an used tampon. At this point, I called my (then) wife and say, "honey, you can't blame this one on me...." and explain the situation.

Dead silence.

With obvious confusion in her voice she says, "But... the box says flushable." The landlord and I both had a laugh.

The whole situation sucked but he knew we weren't being malicious. He spent the next few hours pumping the water out of the basement and then a bit more time with a shop vac and a mop cleaning things up. He was wearing giant rubber boots (waders?) the entire time.

The poor guy was sick for about 2 weeks after that. I felt so bad.

I bought a house in a nearby historic district. The house is in really good shape but it needs a lot of little things done to it. Some of the work I can do myself, but not as much as I would like. Because it's in a historic district, anything "visible from the road" has to be cleared with the city. Most of the work is straightforward minor adjustments to the floor plan. But some work requires specialists: adding timbers to the garage to increase its load bearing capacity so that it can become a practical storage area, possibly converting the building from fuel oil to natural gas, etc.

I'm looking for someone who can help me manage this process and get the right contractors for each task. Any suggestions?