Toledo, OH

[Shane Miller]

We are new to real estate investing and are considering the Toledo, OH market. Does anyone know about how long it takes to rent in this market? We are looking at properties in the 43612 zip.

[Adam A.]

@Ryan Pyle - It was a report on WTOL channel 11 news.

[Ryan Pyle]

@Adam A., thanks for the link. Sounds like it's not likely, just a worst case scenario possibility. And it's 10 years out. I guess that's incentive for all of us to have our properties paid off by then so we could easily absorb such a fiasco! 

[Adam A.]

@Ryan Pyle - There was another report on channel 13 new I think that didn't mention the 10 years plan but something about voting sometimes this September.

I wish the headache would be limited to water and not lead base paint targeting SFR. I don't understand if the children is the concern, owner occupants and multifamily more that 2 units kids do NOT matter!!

When the ordinance includes all properties built before 78 the fight and cost to remedy will be spread cheaper. Or, the issue will be put to voters and let Lucas county or the entire Ohio state residents decide just like the smoking ban.   

[Ryan Pyle]

@Adam A.- as a multi-family owner I am thankful that we are excluded. :) But, I also own many SFR's and am slightly annoyed, although if your house is well-kept it won't actually be that huge a deal. I've been through swipe tests before (LMHA used to make us do them) and as long as you prep the house properly (don't let the tenants do it) you will be fine.

My main beef with the whole thing is that the current laws and awareness campaigns are working just fine. As I've stated before, we went from 14% positive > 10 microliters in 1997, down to 7% in  2000, 4% in 2003, 2% in 2006, and less than 1% in 2014! Progress has been made. And I do agree with you that targeting less than half of the housing stock is not addressing the problem. For all we know the problem may NOT be landlord-owned houses, it could be owner occupied. We landlords are held to very high standards with Section 8 inspections, lead paint disclosures, etc. Home owners aren't. I'd love to see the statistical evidence city council has showing that landlord-owned houses are the problem. 

[Adam A.]

@Ryan Pyle "My main beef with the whole thing is that the current laws and awareness campaigns are working just fine."

You've nailed just right. 

When I was at the hearing last Monday speaker attorney Mark Davis mentioned an article in the Blade that a child was tested over 5 parts for lead. However, the house was tested negative and it was the grandparent owner occupant house that caused the contamination.  

So, can you please explain the procedure to prep, swipe and test? 

[Rob Badhorn]

@Ryan Pyle  Thanks for the Stats.   I hadn't seen those before and would like to see the owner occupied as you mention.  

I agree if your homes are well maintained its not an issue, but more paperwork.

Your Comment: "I've been through swipe tests before (LMHA used to make us do them) and as long as you prep the house properly (don't let the tenants do it) you will be fine."  What company do you use to prep your houses?  Or how do you do it your self?  

Thanks!  Rob

[Ryan Pyle]

Here is a pretty good video explaining: https://www.youtube.com/watch?v=L2iZqWrpyzc

Basically, to prep you need to clean the house from top to bottom (literally, start high and work your way down as dust will fall down). Make sure all windows are very clean. It's a good idea to paint the insides of the windows a day before the test. Also, clean your floors. Vacuum  carpets in several directions with a HEPA vacuum. Mop all non-carpeted floors with clean water and soap. Again, this should all be done as close to the testing date as possible. They also told me to lay down mulch all around the house where there isn't grass. As long as there's no exposed soil, it's a visual pass.

I have no idea if they will change the tests, but it sounds like this is how they are doing it in Rochester and Cleveland right now.  

[Ryan Pyle]

@Rob Badhorn- my maintenance staff does it.

[Rob Badhorn]

@Ryan Pyle  Thanks Ryan!

[Engelo Rumora]

Originally posted by @Ryan Pyle:

@Fawaz Alkhaleefah, with Section 8 your lease determines who pays the utilities. HUD has allowances for each utility that you pay that you can build into the rent. The allowances can be found at www.lucasmha.org. For single family houses in Toledo it is typical that the tenant pays gas and electric. Each landlord differs as to how they handle water. I have found it better in the long run for me to pay water and build it into the rent. Sometimes the tenants use more than what I built in, sometimes they use less. But I don't have any issues collecting water bills. Ask most landlords who make tenants pay for water what their #1 headache is and they will most likely tell you, "collecting water bills."

@Adam A., please point to where you found that Toledo water bills will triple. They have been climbing steadily since 2011, and are scheduled to continue to increase through 2018. However, I haven't seen anywhere that they will triple from where they are now. The last I saw they will go up "in 2016 and 2017 by 13.2 percent each year. In 2018, it is scheduled to jump another 4.5 percent," according to the Toledo Blade.

Ryan and Adam,

Stop scaring people you trouble makers :)

haha

[Fawaz Alkhaleefah]

Engelo Rumora Ryan Pyle hah! ;) But it doesn't apply for Multi-family Ryan says :) so i don't have to be scared that much.

[Fawaz Alkhaleefah]

Jim Moody
Adam A. Ryan Pyle

Question guys!
How much section 8 property rent cost with four units?

I mean .

How much approximately rent worth for each unit?

1/1 - $ .... A month

2/1 - $ ..... A month

Is it possible to reach 14% net yield?

First unit is (2/1)

2nd , 3rd , 4rd units (1/1)

The property in 43620.

Thanks in advance.

[Ryan Pyle]

@Fawaz Alkhaleefah, I can't really answer that question based on the info you gave. It depends on the utility layout (who pays gas, electric, water, sewer, trash), and are cooking, heating, cooling and water heating gas or electric? Also the condition of the property and surrounding properties make a huge difference. 

I think 14% net yield is not achievable by an out of state investor over the long term. You may have years here and there where you do much better than that, but you will also have years where you are negative cash flow (replace roof, HVAC, big turnover, bad vacancy year, etc.). When you have to pay a management fee on top of that, I think you should be happy with 8% over the long haul. Just my opinion. 

[Fawaz Alkhaleefah]

Hi there

Guys do recommend any property insurance company in Toledo?

Please suggest.

[Jim Moody]

You may have to go with an Ohio fair plan policy...most insurance companies in Toledo are shying away from vacant and work needed homes

[Engelo Rumora]

Originally posted by @Fawaz Alkhaleefah:

Hi there

Guys do recommend any property insurance company in Toledo?

Please suggest.

Affinity group based in Kansas City.

All of my properties are insured by the along with our investors.

They have been great thus far.

Much success

[Fawaz Alkhaleefah]

Jim Moody i want to go for the insurance after the necessary maintenance and the filling:) .. Any idea for their prices?

[Fawaz Alkhaleefah]

Engelo Rumora great , I'll check their website soon , thanks Engrlo :)

[Ryan Pyle]

@Fawaz Alkhaleefah I use Matt Vierk at State Farm. They've been pretty aggressive in the rental market lately.

[Fawaz Alkhaleefah]

Ryan Pyle aggressive?? Which one? Matt Vierk? Or you mean Affinity?

[Ryan Pyle]

State Farm Insurance has been aggressive in their pricing. Matt Vierk is a State Farm agent.

[Fawaz Alkhaleefah]

Ryan Pyle oh i see , well thanks :)

[Adam A.]

UPDATE - The Toledo city council will vote on current version of the lead paint legislation  next Tuesday 7/19.  Council Sandy Spang and Rob Ludeman would like to introduce an alternative piece of legislation.  The legislation would get into effect in 12 months and would be much simpler which includes:

• 1-4 units and daycare centers
• Require a VISUAL inspection on the interior, the exterior and the drip line only. If the owner fails the visual inspection, they are required to provide a lead safe certificate by an independent lead inspector.
•   All visual inspections will be conducted by the Health Department.
• Enhanced lead educational material will created and widely distributed at daycare centers, pediatrician offices, natal units in hospitals, etc.
• The "Disclosures of Information on Lead-Based Paint and/or Lead-Based Paint Hazards"  must be signed and filed with the Health Department.

[Ryan Pyle]

@Adam A., thanks for the update! Would this also eliminate the upfront registration fees?

[Adam A.]

@Ryan Pyle I'm not sure if filing the "Signed Disclosure" would include the registration or not. I would know more in the next meeting on Tuesday. My guess, there will be some kind of fee, if the Health Department will be conducting the visual inspection. However, at least no expensive dust testing.