Toledo, OH Lucas County on Top AGAIN for Rental Investments

[Adam A.]

Toledo has been mentioned 3-4 times in USA Today and Wall Street Journal in the last few years for rental investments. Another article has just been published in the Toledo Blade:

Toledo, OH Lucas County great for rental investment.

Adam Atassi

[Andrew Fidler]

@Adam A. Buddy you beat me to the punch!

I always love it when I have my wife send me articles validating what I've been doing for the past seven years...helps her think I'm just that little bit less crazy!

Also note how the article is talking about returns on $88k average priced properties and getting 15%...draw that value down to a zip code with $30-50k houses and you really have something worth bragging about!

"Toledo...it's where all your money needs to be!"

@Engelo Rumora (What do you think Engelo, we have a tag line :)  )

[Adam A.]

@Andrew Fidler LOL.. We're married to the same wife!!

Just wait until the lead ordinance goes in effect. A lot of OLDER investors are planning on selling off. 

[Candace Postell]

Awesome!!

[Adam A.]

Lucas County/Toledo, OH ranked # 5 !!

[Andrew Fidler]

The lead law is just another hoop to jump through. We have an active effort forming a lawsuit to fight it...and I am keeping my places inspection ready so I can comply if we lose. 

As I said to our PIN group (Property Investor's Network) in March, at worst the lead law is a momentary headache, a month's revenue in size. It won't bankrupt me and if other investors run for the hills that's just another buying opportunity :)

[Engelo Rumora]

Originally posted by @Andrew Fidler:

@Adam A. Buddy you beat me to the punch!

I always love it when I have my wife send me articles validating what I've been doing for the past seven years...helps her think I'm just that little bit less crazy!

Also note how the article is talking about returns on $88k average priced properties and getting 15%...draw that value down to a zip code with $30-50k houses and you really have something worth bragging about!

"Toledo...it's where all your money needs to be!"

@Engelo Rumora (What do you think Engelo, we have a tag line :)  )

This is HUGE news guys but something that you guys have known forever and this is the #1 reason why I moved to Toledo when 4 years ago.

By far the best "Bang for your Buck" market in the country. 

Hands down...

Here is my tag line when I run for mayor lol

"Making Toledo Better Together" hehe

Andrew,

Let's do a double espresso soon.

Thanks

[Engelo Rumora]

Originally posted by @Andrew Fidler:

The lead law is just another hoop to jump through. We have an active effort forming a lawsuit to fight it...and I am keeping my places inspection ready so I can comply if we lose. 

As I said to our PIN group (Property Investor's Network) in March, at worst the lead law is a momentary headache, a month's revenue in size. It won't bankrupt me and if other investors run for the hills that's just another buying opportunity :)

I spoke to @Adam A. about this in person and might be interested in throwing some big $$$ behind it.

I want to be the face of the argument for publicity purposes lol

My team is advising me not to do it, but this is a fight I wouldn't mind picking.

One thing tho, I have felt a lack of respect from local Toledo investors for sometime now so that is the only thing holding me back.

Talk to me Andrew :)

[Adam A.]

I've done my research right after they passed the ordinance and I'm convinced that there is no legal way to repeal it. Rochester has even tougher lead ordinance for the last 11 years. So is Baltimore, New York, Detroit, Philly and Cleveland.

When I compared Toledo's to other above cities, I found it to be easier to comply. Also, the atmosphere in Columbus that the new lead law trend will be imposed statewide. We don't want the state to impose their laws. They are a lot tougher. In addition, we don't want ABLE (non-profit org.) to go after landlords for lead issues. 

The only way to deal with this ordinance is to make it more sensible:  test between tenants (or every 3 years) and waive the $50 a day fine for 60 days when violations are issued.

Just my 0.02 cents.   

[Andrew Fidler]

@Adam A. Actually the attorney has a few good points which we will discuss during the April meeting. We won't be discussing the suit publically until the first phase has passed PIN and the initial funding has been committed and the suit filed. Then we follow up with a GoFundMe site and officially seek support and funding.

A lot is hinging on the April 11th lead paint meeting, whether the ordinance does become more reasonable and whether they push back implementation a few years or if they are keeping the Sept deadline and potential fines. (I am of the conviction that we are nearing the point where we need to stop asking for the ordinance to be reasonable and it's time the sue for reasonability. No one is challenging that lead paint needs to be controlled and we are behind keeping properties safe and we fully agree that deadbeat landlords need to be pursued...however the law is excessive in several capacities.)

I'd like to know why the existing and currently quite active Neighbor Works (blight, neglect, abandonment, disrepair  violations) can't pursue properties with peeling exterior paint...immediately attacking half of the problem for the lead paint law (exterior vs interior) and I would expect 80% of the real problem landlords here in Toledo. (If the exterior is crap then we expect the interior is similarly crap). The major difference is that this would apply to ALL PROPERTIES that the inspector drove by, not just the magical "1-4 unit rentals" that are the target of the witch hunt.

Unfortunately as happens far too often with ordinances, the good owners are the ones impacted...it won't be till the city finds the ones hiding that a real improvement will be realized for our city's children...that will only happen when the last leg of the law has started (enforcement) and even then only when the city can identify a rental (if the house is held in an individual's name and the tax bill gets mailed to the house on the county records it will look just like an owner occupied house).

[Adam A.]

@Andrew Fidler You've listed a lot good points and I agree with most of them. I will list the top 4 adjustments that were discussed with the city and might change:

1) Implementation over 3 years period with houses built before 1940 first, second 1941-1960 and third 1961-1978. Or start with the worst zip codes = the map is almost the same as Asthma cases. 

2) Test between tenancy or 3 years whichever is first. 

3) Delay the $50 a day fine for 30-60 days after issuing violations. This was agreed on when I discussed it with council Sykes in the last Lead Task Force meeting.

4) An extension will be granted but I'm not sure for how long. 

Just to let you know that the city can find rental properties, even hidden, through the water bill which stays in the owner's name.

You've mentioned many details I would prefer not to discuss publicly, however, I'm available privately anytime. 

Adam Atassi

[Douglas Bradford]

I do have a question about this lead business.  If instead of renting a small house, can an owner/landlord enter a land contract deal with a "buyer" with the stipulation that the deed will transfer when, say, 20% equity is reached by buyer?  In this manner the transaction is a sale, rather than a rental.  The water meter remains in deed holder's name for a while, but in court, if the City of Toledo tried to fine the Seller, the court would need to look at the contract which is basically a purchase agreement (I know, I know--the Housing Court in Toledo is very anti-landlord).  The Purchase Agreement/land contract could even be recorded in Lucas County (at the time of the agreement signing, the Seller could have the Buyer sign and notarize a Quit Claim Deed back to Seller in the event the Buyer does not perform).   In reading Toledo's Ordinance, I don't see the logic of the 1 to 4 units; does that mean in a six unit the children are deemed "safe" by the City? Or if the house was sold outright, the children are also safe?  I comply with the Federal Government's rules as to possible lead, with the booklets, etc.  I just think this push by Toledo is another "tax" cash grab.

[Andrew Fidler]

Hi Doug,

Absolutely let me know what you find out as you dig deeper into the idea...this is one I would want a lawyer involved to be safe. You would want to compare the cost of being covert to the cost of complaince. 

HOWEVER- I am officially on the record stating I wouldn't do anything until after the November elections. Do not comply and don't structure any legal silliness until we know if the authority for lead paint enforcement is at the state or local level and especially until after we have city elections so we can change the wash here in Toledo. 

If the state loses there will be a lawsuit suing for authority. If the city loses they will sue to pursue authority. 

If the investor community decides there is a case to pursue they will sue and get counter sued. 

If the elections result in reasonable political leadership everything will change by the June 30th deadline. 

I councel a wait-and-see approach. 

Andrew 

[Adam A.]

@Douglas Bradford Here is a clarification: Land Contracts are exempt from the Ordinance. However, rent to own is not.  I would check with a real estate attorney about the difference compared to your proposal. If you don't know an attorney, let me know.

As far as the Ordinance itself with a ll the due respect to Andrew, I have a different view. While other investors/landlords are running scared from it, I find it easier to comply and more economically sound than to fight it.

About 10-12 years ago, Toledo came up with an Ordinance to not allow more than 3 non-related tenants to occupy a house. That was placed due to a lot of residents complaining about renting to students especially around UT.  Toledo REIA fight the Ordinance legally all the way to the Ohio Supreme Court, even though it was thought to be a slam dunk due to it's unconstitutionality.  After all, how can ask if 2 people are married or not? This is against the Fair Housing Act. 2 Days before the case was supposed to be heard by the Ohio Supreme Court, the Toledo City withdrew the entire Ordinance!! However, a couple months they reintroduced it.  Unfortunately,  Toledo REIA wasted about $50,000 and had to start all over again. My point is, the city has deeper pockets.

Toledo is a blue collar town  and we have not had a republican mayor in about 35 years. The only candidate that's running for mayor and opposes the ordinance is Tom Wisniewski (Republican).  I wouldn't bet on city council to strike the ordinance because it was passed 10-0 the first time and 10-1 for the amendment.

The new proposed amendment by  State Rep. Merrin scares me more than the ordinance, if it passes. It proposes to strip the power from the city and give it  to the state. ODH and lead state laws are more stringent than the ordinance, unfortunately. 

Why only 1-4 units have to comply and not 5 or more? According to data and experience of other cities that have such ordinances (Baltimore, Rochester, etc.), the vast majority of lead poisoning occur in SFH and duplexes.  

IMO, if you want to invest in the Toledo market which is one of the top 5 nationwide, do NOT let this ordinance prevent you. 

Adam Atassi 

[Andrew Fidler]

...Adam sells lead inspection services to Toledo investors and I can only fathom is hoping for a role in Toledo politics as he is 150% on the side of the city and the lead inspection process and has continued to stay there regardless of data, reason, or current events. 

[Adam A.]

I'm a real estate investor and a landlord. I became an inspector to learn more about the ordinance.  I'm very blessed as I'm already about 90% retired and not even 52 years old or have kids to worry about. I could careless which way the ordinance goes. I mainly volunteer doing other things and manage my investments.  I just enjoy to be involved helping other investors to reduce their burden of financial hardship and advise them how easy it is to comply.  

LOL... I have no desire of getting involved in politics. At least I don't jump party lines for personal gain.

Adam Atassi

[Engelo Rumora]

Can I run for mayor? Haha

How much cheese do I need throw at it? lol

Spoke to my attorney yesterday about causing a stir with the lead stuff.

We are still considering.

Need tons respect from the Toledo folk tho 😀