Cleveland, OH Mixed-Use Value Add

Project Location:

3240 W 98th St, Cleveland, OH 44102, USA

About The Project:

A 17 Unit mixed-use building (residential & retail) in Cleveland, OH that requires cosmetic upgrades to increase in rents and revenues. We will acquire the building do a complete cosmetic renovation turning this into a modern and fully updated property. that is close to everything making a draw for the local area and a cash cow for everyone involved.

The Cleveland multifamily market is experiencing robust rent growth, outpacing national averages, and strong absorption rates, making it an attractive environment for investment. Through our analysis and underwriting of the project and area, we have decided on a strategic implementation of a diversified rental model, with a focus on higher-yield strategies like insurance and corporate housing, to unlock the full potential of this asset, as well as a mix of 30% of the units being utilized as affordable housing so as to give hardworking families and individuals an opportunity to live in a property they may not regularly be able to afford. This blended mixed-strategy approach does two things: one, it allows for a guaranteed, steady, and predictable revenue stream that pays top of the market, while two, it allows for giving back to those in need. The remaining units will all be split up and utilized for corporate, insurance relocation, and co-living rental units. The mix of these four strategies creates a strong, stable, and high-revenue-generating asset that pays its owners/shareholders an amazing rental yield and ROI for years to come and that also gives off amazing tax benefits that one could never get without owning real estate as an investment.

Property Overview

The subject property is a 17 Unit, (14 residential & 3 retail) two-story, 13,000 SF mixed-use building constructed in 1928 and partialy renovated in 2022-2023. It is located in the Cudell neighborhood on Cleveland's West Side, a very walkable area with excellent access to public transportation and major employment hubs.

Property Details

Property & Area Details:

Named for the broad thoroughfare wending south from Lake Erie, West Boulevard offers residents a park-like feel with mature landscaping and spacious lawns. Described by locals as a "front porch" neighborhood, homes for rent include charming one- and two-story dwellings dating from the early 1900s. Hardly hidden, but a neighborhood gem all the same, Halloran Park features the city's first water playground and provides the area's only ice skating rink.

Residents of West Boulevard shop at the neighborhood Berea Road/West 117th shopping complex where suburban style meets local convenience. Neighborhood dining includes Mexican, Cambodian, and German eateries. At the Happy Dog, diners get to choose from among 50 different hot dog toppings.

Value-Add Opportunity

The property is currently 100% occupied, but residential rents are significantly below market rates. This presents an immediate opportunity to increase rental income and drive a higher NOI. The flexible zoning also allows for potential future redevelopment or reconfiguration to further enhance value.

Market Analysis

The Cleveland multifamily market is demonstrating significant strength and resilience, positioning it as a prime target for investment. The market is characterized by strong rent growth, high occupancy rates, and a robust development pipeline, all of which signal a healthy and expanding rental market.

Macroeconomic Environment

Cleveland's economy is supported by a diverse range of industries, with the education and health services sector being a primary driver of job growth. In 2024, the metro area added 2,900 net jobs, and the unemployment rate stood at a stable 4.6% in January 2025. This economic stability provides a solid foundation for the housing market.

Multifamily Market Performance

The Cleveland multifamily market is outperforming national benchmarks in several key areas:

• Rent Growth: Year-over-year rent growth in Cleveland is 4.4%, more than double the national average of 1.2%.

• Occupancy: The market-wide occupancy rate is 94.7%, slightly above the national average of 94.5%.

• Absorption: The market absorbed 1,500 units over the past year, a rate 30% higher than pre-pandemic levels.

Rental Strategy Analysis

A key component of this investment analysis is the evaluation of various rental strategies to determine the optimal approach for maximizing returns. Five distinct strategies were modeled and compared:

1. Traditional Long-Term Rentals: Standard 12-month leases for unfurnished units.

2. Corporate Housing: Furnished units leased to corporate clients for extended stays (30+ days).

3. Insurance Relocation Housing: Furnished units provided to individuals displaced by disasters, with rent paid by insurance companies.

4. Co-living: Renting individual rooms within shared apartments.

5. Mixed Strategy: A blended approach combining all four strategies across different units in the building.

Detailed Strategy Breakdown

Traditional Long-Term Rental

This strategy serves as the baseline for comparison. It offers stable, predictable income with lower operational complexity. However, it also provides the lowest potential returns. The pro-forma analysis shows a potential NOI of $194,516 and a cap rate of 13.0%.

Corporate Housing

This strategy targets business travelers and relocating employees, commanding a significant rental premium. While vacancy rates are higher, the increased rental income results in a projected NOI of $228,297 and a cap rate of 15.3%.

Insurance Relocation Housing

This is the most lucrative strategy, with the highest rental premiums and lowest vacancy risk due to direct payments from insurance companies. This model is projected to generate an NOI of $308,952, a cap rate of 20.7%, and a cash-on-cash return of 60.0%. This strategy requires establishing relationships with insurance companies and maintaining high-quality furnished units.

Co-living

This strategy involves converting larger apartments into shared living spaces, which can increase the number of tenants and overall rental income per square foot. While the per-room rent is lower, the increased density can be profitable. The projected NOI for this strategy is $141,390, with a cap rate of 9.5%.

Mixed Strategy

A blended approach offers a balanced risk-return profile. By diversifying the rental strategies across the building, the property can capture the high returns of niche markets while maintaining a stable base of traditional tenants. The mixed-strategy model projects an NOI of $202,960 and a cap rate of 13.6%.

Summary of Financial Performance

The following table summarizes the key financial metrics for each of the five rental strategies analyzed:

Financial Waterfall Analysis

The following waterfall chart illustrates the breakdown of income and expenses for the highest-performing strategy, Insurance Relocation Housing:

This chart clearly shows how the gross rental income is impacted by vacancy and operating expenses to arrive at the final Net Operating Income (NOI). Although the insurance relocation rentals show higher revenue, following the mixed model is by far a much more stable and predictable structure to utilize and is the reason we have leaned heavily in that direction. Reserving specific units for specific strategies is a much smarter, safer, and more balanced route to take. This decision comes from experience as well as current market conditions and demand.

Location Data

• "B-" Rating for Zip Code on Niche

Investment Overview:

Why Invest in 3240 W 98th St, Cleveland, OH 44102?

• Strong Cash Flow: backed by a strong rental market and rental strategy

• Value-Add Rental Play: with the ability to improve each unit cosmetically, increase traditional rents, and begin to transition 75% of the building into corporate, insurance relocation & co-living rental units.

• No HOA

• Regular Passive Monthly Income: rent distributed directly to your account—no lockup, peer-to-peer liquidity

• Ability to Trade or Sell your Tokens: peer-to-peer or on the Secondary Market

• Documented transparency: every report and contract available for review

• Professional oversight & management by active management company specializing in vacation & corporate rentals

• Fractional Access of Ownership: Own a piece of the next project in Fractional Syndication's real estate evolution starting at just $500 per token.

3240 W 98th Financials & Projections: (5-7 year holding period)

• Projected Profit at Sale: $2,138,860.32

• Acquisition Price: $1,495,000

• Property taxes: $28,747

• Projected Annual Gross Rents: $293,000

• Projected Cash Flow: $16,089.25 (per month) / $193,071 (per year)

• Projected NOI: $16,089.25 (per month) / $193,071 (per year)

• IRR (Per Year): 15.74%

• Cash-on-Cash Return: 126.56%

• Projected Rental Yield: 18.55% (Gross) / 11.87% (Net)

• Purchase Capitalization Rate: 12.91%

• Projected Rental Appreciation: 4.4%

Estimated Project “Go-Live” Date (Projected): TBD

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