Engelo Rumora blog on 3 property classes to remember when you invest in real estateReal estate experts and investors share many different views when it comes to ranking property and area classes.

Most will rank them on a general scale of Class A through Class C. Others will be a bit more particular and grade them from Class A through Class F.

I prefer to stick with the KISS (Keep It Simple, Stupid) approach and only rank a particular area/property as being either “A, B or C.”

Below I have provided a breakdown of how I classify each property/area of Toledo, Ohio, a market in which I am heavily active.

The Class “A” Property

These are top-of-the-line homes that are very well maintained and possess a “WOW” factor for those who are driving past.

They are newer built properties that are mostly situated on large river-front lots. Class A properties are located in highly desired school districts, are in close proximity to major medical/shopping facilities and have ease of access to all major highways.

These properties are mostly occupied by homeowners, with a minority of them being occupied by tenants. Although cash flow in Class A properties tends to be low, they do offer a potential for growth due to a high demand from homeowners whose decisions tend to be based upon emotion.

The Class “B” Property

I believe that Class B properties should be the bread and butter for every hands-off investor.
These properties can range anywhere from 30 to 60 years old and are mostly occupied by blue-collar, working-class people. For the most part, this area class is very well kept, although every now and then you may come across the odd vacant home that is sitting on an overgrown lot.

The school zones tend be slightly less sought-after, but are within close proximity to all amenities, making the area very similar to Class A.

Class B properties are approximately 50% owner-occupied and 50% investor-owned with tenants.

Due to the opportunity for cash flow, high growth potential and exit strategy offered, Class B properties should be the foundation for every investor looking at building a substantial property portfolio.

The Class “C” Property

There is no doubt that this class contains the highest risk of all, but it also can prove to be the most lucrative investment if you have the right strategy and system in place.

Class C homes are much older than the above classifications, with some of the properties dating as far back as the 1880s. There is a high chance that these properties will show visible deterioration, with a majority of them being boarded up.

These properties are predominantly investor-owned and are occupied by low-income tenants. They offer by far the highest cash flow out of all the classes, but require full-time monitoring and management. The property manager will need to specialize in this particular area, in order for the numbers to work.


A successful and cash-flowing portfolio can be built by acquiring solid Class B properties. Once you have developed a strong foundation with your Class B properties, then you might consider taking on more risk and diversifying which property class you invest in.

By using leverage and diversifying into the Class C area, you will further increase monthly cash flow, which will enable you to grow your portfolio at a quicker rate.

As far as Class A properties go, they should just stay as the “WOW” factor. Instead of just wishing you could live there, you can, once you have built a grand portfolio!

No matter what class you decide to invest in, the most important thing is to have the right property management in place that has your best interests at heart. Smart investors will base their decisions on the numbers in the deal and focus on building a team that can make those numbers work.

Visit Engelo’s site here.

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  • Engelo Rumora

    Engelo Rumora, aka “The Real Estate Dingo," is a successful property investor, motivational speaker and serial entrepreneur who quit school at the age of 14 and played professional soccer at 18. He also is a soon-to-be-published author and aspiring host of his own real estate house flipping show. To date—and against huge odds—Engelo has been involved in over 350 real estate deals worth $50 million in transactions along with successfully founding and running five businesses in Ohio. The most prominent of those is List’n Sell Realty, a Toledo-based discount real estate brokerage offering a “first of its kind” referral program in the nation. Visit www.listnsellrealty.com for more information. You can contact Engelo at engelo@ohiocashflow.com or visit www.ohiocashflow.com.

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