I like your honesty and education about the conditions of the Cleveland properties. I have to say given the older 100+ year old properties plus humidity being near Lake Erie can leave houses in bad shape. Like you mentioned, almost all houses have moisture in the basement which is concerning for rot and mold. As well as questionable structural issues at times. Some homes can be a money pit.
Nice video approach; good pace, seems genuine. I appreciate your willingness to talk about the good and bad in your videos. Having said that, I have a few doubts about what you guys are showing us. I took the time to run your numbers. If one takes into consideration ONLY the factors you guys consider (vacancy, PM, insurance, etc.), my numbers are almost the same (not using BP tools). However, I find this analysis a little over-optimistic. Let's see... After your tour, it seems apparent that it will be necessary to spend some money on refreshing this property if you expect to get $1,400 per unit. Maybe not a lot, but it adds up. And it seems surprising that you can get $1,400 for a 2bed/1bath without central A/C. I may be wrong, so I will trust you guys on that... Most importantly, however, there are "annual", "quarterly", and "seasonal" expenses in running a property (any property) that should be part of the investment consideration. Beyond the 5% you guys allocated for monthly maintenance & repairs of these old properties. For example: (1) annual rental registration ($150 for a duplex in Lakewood-$75 per unit); (2) cost of maintaining an LLC if you run the property through such entity (at least $150/year just to renew the registered agent); (3) seasonal expenses, some of them inevitable like snow removal (especially in the Cleveland area!), but there might also be some landscaping work, especially in Spring, after such a long Winter (and possibly in the Fall as well), and the Fall tune-up of the furnaces - these are all expenses on top the 5% for maintenance & repairs (4) depending on how you get your tenants, there may also be "advertisement expenses". (5) finally, water/sewer bills combined may cost some $120-150/month; in some properties, the cost could be even higher. I wonder how you guys manage to slip the water and sewer bills into the contract if the meters are not separate (in the Cleveland area they normally aren't, separate meters are very, very rare...). Those are things-from the top of my head-that your analysis should consider. Adding all up, the ROI would be considerably lower. In any case, thank you for a very informative video!
Stan, We would be happy to do a virtual tour for you! Or if you decide to come to Cleveland, we will be sure to carve out some time to take you around. Give us a call and we can get you started!
Lakewood is awesome, but there are some fantastic parts of Cleveland that are similar. Kamm's (which is super close and borders Lakewood) is just one example
I like your honesty and education about the conditions of the Cleveland properties. I have to say given the older 100+ year old properties plus humidity being near Lake Erie can leave houses in bad shape. Like you mentioned, almost all houses have moisture in the basement which is concerning for rot and mold. As well as questionable structural issues at times. Some homes can be a money pit.
Well said!
Thank guys. You change my mind. I was about move from MA to Georgia but after watching your video I decided to move to. Ohio
Excellent…let us know how we can help!
Most insurance companies will not cover a fire caused by knob and tube electrical even if you are insured by them
Nice video approach; good pace, seems genuine. I appreciate your willingness to talk about the good and bad in your videos. Having said that, I have a few doubts about what you guys are showing us. I took the time to run your numbers. If one takes into consideration ONLY the factors you guys consider (vacancy, PM, insurance, etc.), my numbers are almost the same (not using BP tools). However, I find this analysis a little over-optimistic. Let's see...
After your tour, it seems apparent that it will be necessary to spend some money on refreshing this property if you expect to get $1,400 per unit. Maybe not a lot, but it adds up.
And it seems surprising that you can get $1,400 for a 2bed/1bath without central A/C. I may be wrong, so I will trust you guys on that...
Most importantly, however, there are "annual", "quarterly", and "seasonal" expenses in running a property (any property) that should be part of the investment consideration. Beyond the 5% you guys allocated for monthly maintenance & repairs of these old properties.
For example:
(1) annual rental registration ($150 for a duplex in Lakewood-$75 per unit);
(2) cost of maintaining an LLC if you run the property through such entity (at least $150/year just to renew the registered agent);
(3) seasonal expenses, some of them inevitable like snow removal (especially in the Cleveland area!), but there might also be some landscaping work, especially in Spring, after such a long Winter (and possibly in the Fall as well), and the Fall tune-up of the furnaces - these are all expenses on top the 5% for maintenance & repairs
(4) depending on how you get your tenants, there may also be "advertisement expenses".
(5) finally, water/sewer bills combined may cost some $120-150/month; in some properties, the cost could be even higher. I wonder how you guys manage to slip the water and sewer bills into the contract if the meters are not separate (in the Cleveland area they normally aren't, separate meters are very, very rare...).
Those are things-from the top of my head-that your analysis should consider. Adding all up, the ROI would be considerably lower.
In any case, thank you for a very informative video!
These are all valid points! We encourage you to run the numbers your way, no two investors are alike. Please let us know if you have any questions
Should I do a virtual walkthrough with a realtor if I live down south. Or should I apply to Cleveland and look at it in person if I'm an investor
Stan,
We would be happy to do a virtual tour for you! Or if you decide to come to Cleveland, we will be sure to carve out some time to take you around. Give us a call and we can get you started!
You need to save wayyy more than .05 for maintenance.
The worst neighborhoods in lakewood are on par with the best areas of cleveland. It's not Cleveland.
Lakewood is awesome, but there are some fantastic parts of Cleveland that are similar. Kamm's (which is super close and borders Lakewood) is just one example