At 20/20 Real Estate, we supply Cleveland and Akron turnkey properties in three broad demographic levels:
Class A investment properties typically range in price between $100,000 and $175,000 and are located in suburbs where the neighborhoods are predominantly owner occupants and are in better school districts.
Class B turnkey rental properties typically range in price between $50,000 and $100,000 and are located in suburbs where the neighborhoods are a mixture of tenants and owner occupants.
Class C real estate investment properties typically range in price between $30,000 and $50,000 and are located in suburbs where the neighborhoods are predominantly tenant occupiers in subsidized housing.
CLASS A RENTAL PROPERTIES
Location: Suburbs where the neighborhoods are predominantly owner occupants and are in better school districts.
Property Values: Typically range between $100,000 and $175,000.
Monthly Rents & Cap Rates: Rents range from $1,200 to $2,000. Cap rates typically range between 8-10%, with higher cash on cash return when leverage is applied.
Refurbishments: Finishes are of a higher quality to suit the occupant level and demographic.
Tenant Pool: Tenants in these residential investment properties are often upper middle-class families with above average income. Class A tenants tend to be very stable, non-transient and tenancies are often renewed over many years.
Financing: Lenders currently offer financing on most Class A assets.
Exit Strategy: These tenants can qualify for mortgages and thus be converted to end-buyers. Lease option strategies are also popular and such arrangements present a mutually beneficial strategy for both parties. Alternatively, upon turnover, Class A assets can be prepared for retail sale and so achieve top market sale prices.
CLASS B RENTAL PROPERTIES
Location: Suburbs where neighborhoods are a mixture of tenants and owner occupants.
Property Values: Typically range between $50,000 and $100,000.
Monthly Rents & Cap Rates: Rents range from $850 to $1,200. Cap rates typically range between 10-12%.
Refurbishments: The value added work and finishes are of a high quality rental grade. We systematically use the popular paint color, carpets, flooring, finishes, etc on all Class B assets, which helps to attract good tenants and fast tenant placement.
Tenant Pool: Often lower middle-class income level families. Occupants are non-transient, where tenancies average 3+/- years. Tenants in these turnkey rental properties are often middle-class families with average income levels. Class B tenants tend to be non-transient.
Financing: Investment property in the $50,000 to $75,000 bracket are typically cash acquisitions. However, asset-based lenders exist and a purchase of 3 or more of these properties will usually qualify for financing. Class B real estate investment properties which are priced in the $75,000 to $100,000 bracket will usually qualify for conventional financing.
Exit Strategy: Class B assets are investor favorites due to their location in solid neighborhoods and the relatively high local rents that they command. By the very nature of their performance, these assets will continue to be popular and the rental returns can attract other investors at market prevailing cap rates in years to come. Also, as lending guidelines continue to loosen, this tenant base may also convert to first time buyers, as a mutually beneficial exit strategy.
Lease option strategies can apply.
CLASS C RENTAL PROPERTIES
Location: Neighborhoods which are made up predominantly of tenant occupiers.
Property Values: Typically range between $30,000 and $50,000.
Monthly Rents & Cap Rates: Rents range from $650 to $950. Cap rates typically range between 12-14%.
Refurbishments: Mechanicals and major items are typically addressed. Finishes are of lower quality rental grade – enough to pass a section 8 government housing inspection.
Tenant Pool: Tenants in these rental investment properties a often low income and government subsidized.
Financing: N/A. Cash only.
Exit Strategy: Class C assets typically offer the lowest entry price and can offer the highest cap rates, if managed properly. As such, they can attract investors at market prevailing cap rates in the future.