$45,900 duplex: No, that's not a typo

Just what is the Cleveland-L.A. connection?

Sunday's Business section had an unusual color advertisement nestled among the usual high-end fare: a rehabbed, renter-occupied 3,377-square-foot duplex for sale at $45,900. Yes, $45,900.

Seems the ad for investment property in Cleveland drew some eyeballs and even a few calls to Vadim Klein of Cleveland Restoration Group asking if the price on the five-bedroom, two-bathroom house was a typo or misprint.

Nope. According to Klein, about 50% of their investor clients have come from California since the outfit launched early this year. The company tailors its sales to investors, buying bank-owned homes and doing work, from face-lift to complete renovation  for rental, before reselling. So far, they've turned around close to 200 homes.

Who else is buying Cleveland? Klein says another 20% of their clients are from the U.K.

His biggest challenge right now, he says, is making people believe the prices. Perhaps he should preface his ads with the words: NO JOKE.

--Lauren Beale

Thoughts? Comments?

Photo: A Halloween day street scene in Cleveland, Ohio. Credit: Carolyn Cole / Los Angeles Times

Comments

[Inland Empire]

Does the ad also state the cost of winter heating bills? Might not be a bargain after all.

[Tim K.]

It really is amazing that they have to go all the way out to California to find people who so out of touch with the local real estate realities that they believe $45K is a bargain for a home.

Clearly, it's not, otherwise local people would be buying these places to live in or rent out. Maybe all it takes are a few Californians stupid enough to believe they are smarter than the average Ohioan.

[LeftLA]

Where have you been? This has been going on in Cleveland, Detroit, Indianapolis and Kansas City for several years.

[ckomel]

DataQuick October numbers are coming up in a few days. Please don't forget to post it instead of this nonsense. I really value the opinions of this blog's followers who gathered thanks to Peter's interesting and RELEVANT postings.

I can get a house in Sri Lanka for $5K. Big Deal. But I live in California.

I am not trying to be cruel, I just do not want to lose this important source of information on California housing market.

Sincerely,

[Bubblewatcher]

My brother just closed on a house 20 minutes outside of Wisconsin. 4 bedrooms, 2 1/2 baths, a nice lawn, a fabulous school district...$205K.

This only seems freaky until I consider that $200K would have gotten you a pretty nice condo in West Hollywood, and $400K a small house in Venice, up to about 8 years ago. And of course may well again, at the rate things are going.

[eprobert]

No offence to Hong & Beale, but this blog kind of sucks right now. Both of you guys are great writers, but what made it so interesting and lively in the past was Pete Viles' personal angle and interesting commentary on the data. We might not all have agreed that the Bob Hope foreclosure was relevant, but at least he put a spin on it. That's what blogging is all about - unbiased sources presented with a biased commentary.

What you guys are offering here is the same-ol same-old "dead trees" coverage shortened to a blog format.

[desmo]

eprobert,

With all the posts trying to get this blog back to something worth reading the new guys will ignore everybody, keep writing about worthless celebrity's and bottom calling until they get fired.

[fezco]

eprobert,
Let's cut Lauren and PeterH some slack. I have seen some improvement with Lauren's blogging, and I expect PeteH (although Bullish) commentary to improve as well. I think Pete had plenty o' practice and, yes I miss him too. Hey at least this blog still exists and Lauren wasn't downsized. The question is, 'Where's the Beef,' Lefty, FM71, Laker??.... I don't as many posts from our best commentators.

[Octogenarian]

I agree that this blog has really gone down the tubes. We were interested in housing trends in L.A.--not random stories culled from the internet that happen to involve a house. Still, if one of the two current writers must take this blog over, Peter Hong's posts are a lot better than Lauren Beale's irrelevant posts.

[sandiegan]

Location. Location. Location.

It's in Cleveland.

You really don't have to leave CA to get a cheap place.

Here's a CA coastal duplex for $134K.
4bds/2bas/2200sqft total:
http://sfbay.craigslist.org/eby/reo/915251654.html

Here's an actual 3/2 SFH in San Diego, CA for...$50K!
http://www.realtor.com/search/listingdetail.aspx?loc=San+Diego%2cCA&ml=8&mxp=300000&typ=1&sby=1&sid=e7ba761b3e7d432f9707841cd164a1f2&lid=1102580320&lsn=1&srcnt=873

BTW: What happened to the weekly housingtracker.net post?

[Ken]

Is this just the start of another future housing bubble. Those far away investors will dump those properties as soon as they see they a.) aren't going to make any cash or b.) prices start dipping again in future years.

[Name]

That's because all the best commenters left with the good blogging. Feel free to do the same yourself. I believe our old host was kind enough to provide a list of sources for his information before jumping ship, look that up and off you go just like me.

Deleting bookmark from 'daily' folder now...

Name

[Steve]

I would not touch a dump in Cleveland if it was free. I am buying SFDs in Colorado now that I can rent with a 20% positive and rent the day I close. Dumps like this in Detroit and Cleveland are now the ghetos of the midwest.

[Cleveland Restoration Group]

The connection between LA and Cleveland is that California investors are buying properties in Cleveland. As difficult as that may be for you to believe, it's true. These investors are looking to diversify their holdings. The bulk of our clients are out of town investors, most of them from California. In addition, we do have a number of local Clevelanders investing in these properties. The current market climate has pushed people towards investing in tangible assets - which would include investment properties These are afforadable, well built homes (not dumps) which have been rehabbed. The other reality of the current market, especially in Cleveland, is that there is an increase in the number of renters. People are either being foreclosed out of their homes or are unable to buy because of constricting lending markets. Our hope is to provide investors from all over with an affordable, quality asset and to help restore Cleveland and its neighborhoods one house at a time.

[Cindy]

I have a place in southeast Missouri (80 miles south of St. Louis) in the foothills of the Ozarks for sale. It is 4,000 sq ft on 30 acres with stocked fishing ponds. It has 4 bedrooms, 4 bathrooms, 2 kitchens, two living rooms, indoor pool, etc... My parents are moving to northeast Arkansas to live with me because they are not in good health. We are asking $315,000.00 (negotialble).

[inland empire]

Why purchase these properties because it is a places to park your money. Why not is because there is no real market in these city only speculator who have not been to Cleveland or Detriot and saw how bad it really is. I agree with others this blog has jumb the shark. I never realize how good an editor Peter was..

[Crash and Burn]

Should it say " No Joke" or "No Jobs"?

Perhaps all of those projections of Baby Boomers flocking to Florida and Arizona were way off base.

Cleveland, and the rest of the great rustbelt, the retirement capital of America and California? It has a type of indisputable logic. Seeing rain in the summertime could be quite a novelty for Californians, and what's that white stuff? I though they just had that on the ski slopes.

But seriously, I think we should force every single realtor, homeowner, and perspective homebuyer in California to sit down with her eyes pried open (ala Clockwork Orange) and have to look at these prices in the rest of the country. How can LA be 10X Cleveland. If you make 150K per year here to afford a house, you would only have to have to make 15K per year there to buy the same house. Hmmm. Instead of working 30 years and retiring in SoCal, we can now work 3 years in SoCal and retire in Cleveland?

[Sayonara Leawood]

I recently relocated back to LA from Kansas City, after living there several years. I chuckle to myself when I hear people say "hey, I can buy a house on an 5 acres of land for 200K in the Midwest with a trout pond, etc...I'm outta here!" If relocating, I'd strongly suggest renting before you buy, just to see if its a cultural fit. After watching my son get endlessly bullied because he was not into local sports, enduring icy winters with months of gray landscape, frozen pipes, unbearably humid summers, not much to do but watch sports, shop and eat; not to mention the Fraternity/Sorority culture prevalent in the workplace, I'll be blessed if I never set foot in that place again for the rest of my life. Sorry; perhaps the Midwest is a great choice for some, but for my family, we all relieved to finally get out. Just my opinion and experience, and be very careful what you step into if its unfamiliar territory. There is a reason those prices low.