All Forum Posts by: Adam A.

@Engelo Rumora - Unfortunately, most of the houses that will be dumped on the market are in areas not worth investing in.   

I wouldn't dare bashing PMs especially you.. Just let me know when it's close to pack my toothbrush and European Speedo :) ... 

@Phillip Weickert - Hello Philip - I highly recommend the local Toledo REIA which meets the 2nd of Tuesday of Every month. Here is the link for more info: Local Toledo REIA.

Also, @Engelo Rumora heads a local monthly Meetup for under 40 real estate investors which passed my prime :) ...  

@Angela Harding It's no longer good enough to have no peeling paint as the case in all your properties. The new ordinance will enforce going from passing the visual inspection stated now to 12 dust samples testing and that's where the issue is.  Dust contaminated with lead could be from poor house upkeep, children toys made in China, exterior emission if the property is located by a highway, or transfer from another owner occupant as in the case of the kid's grandparent house as the story listed in the Toledo Blade newspaper.  

I'm not against PM companies at all as you get what you pay for and I happen to manage my own to save money at this time. However, when I'm ready to live in my tent in Fiji, I will look you up :)... 

@Scott Rudd - There is always risk in investing. I'm not a fan of REITS due to their lower return of usually about 7-8% and maintenance fees. Turn Key properties is usually an investor who buys a distressed property, rehab it, sell it at a higher price regardless of Federal or State banking laws because it's a cash transaction then find a renter and mannage it for the buyer at a monthly charge. 

Since most of these transactions are cash only and don't involve financing, banking, appraisal, etc. they don't have to follow Federal laws about waiting 90-180 days for 20% max. higher reselling profit. 

It's a win-win situation for the seller due to many advantages: The buyer might not be aware of the actual rehab and the quality of job done. The value of the property could be sold for a lot of profit without knowing the actual cost or any disclosures done to the house. For example, the investor bought the house for $15,000 and spent $7,000 to fix up with cosmetic (which we call lipstic) to make it appealing and sold it for the going value of the neighborhood of $70,000. Six months after the renter moved in and things started to break and you end up paying twice to fix it.

I only buy houses in my local area since I know the market and local laws which are constantly changing. If I were you, I would search a local turn key company with a solid long history. Or, I would buy the house and hire a good contractor to fix it which will save you a lot of $$$$ and then hire a property management to rent it out. 

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"PASSIVE INCOME":

According to IRS, as long as you do "White Collar" job managing the property it's considered passive income. White Collar: hiring a contractor, showing a property to a potential renters, evicting a tenant, any aspect of paperwork such as collecting rent. On the other hand, it's no longer passive income if you become involved in "Blue Collar" job such as: mowing the lawn, changing a light bulb.       

@Scott Rudd @Angela Harding 

The days of 18%-25% return COC in Toledo are over with the new city ordinance once enforced. Also, most likely you'll get about 8%-11% with PM involved and I highly doubt 18%-25% unless you're managing it yourself.

Even 8-11% is pending the new law: 

CLICK HERE READ ABOUT THE NEW LEAD BASE RENTAL LAW IN TOLEDO

@Engelo Rumora @Rob Badhorn @Fawaz Alkhaleefah @Ryan Phillips @Ryan Pyle 

 ALERT!! Here is the new DRAFT TOLED LEAD BASE LAW

@Ryan Pyle I agree with you. They're in the process of hearing and taking in consideration all the obstacles including hiring a 3rd party for inspections. The panel which in favor of this ordinance which includes 2 attorneys at the hearing yesterday were playing adding new jobs to Toledo and economic growth cars!! The estimate is 45,000-55,000 affected rentals before 1979 that's not counting owner occupant.   

The other alternative is to register all rentals at $45 each a year and have landlords voluntarily certified for free as lead inspectors by Federal grant. Then randomly inspect 10-15% of the rental units.  The problem is if the unit passes visually, 12 dust samples will be collected. If 50% of them failed, then the unit has to be corrected. Lead base dust could be found in the house due to toys made in China or contaminants from another owner occupant house. Exterior soil samples within 3 feet of the house has to be also collected and this could a contamination from emission being close to a highway. One of the issues is still to agree on is at what level lead is safe for children 5 or 0? 

It's a huge and ugly can of worm that's going to affect the Toledo area economically for several years to come, if the ordinance passes without any compromise.     

@Rob Badhorn One of the city councils stated that landlords should know better that it's an investment. This ordinance is just like if the hot water breaks down and the landlord is responsible to fix it. Anna Mills, president of REIA response to his ignorant comment was perfect when shen said that according to HUD guideline disclosure lead base poisoning is also a result of bad house upkeep by the tenant.

 It's really important to attend those hearings and voice out any concerns. City councils don't have a clue except that landlords are harming children and that's how this snowball started in Rochester, NY 10 years ago.     

@Engelo Rumora I totally agree. 

@Rob Badhorn Unfortunately, the advocacy groups and especially the majority of city council look at it as a landlord and racial injustice issue. What a shame that one of the city council had to mention something about it yesterday.

@Engelo Rumora I was at the hearing yesterday which went on for about 3.5 hours. The council will pass a law no doubt to protect children under 6 who are affected the most by lead poison. A testimony from an expert from the the University of Ohio based on assumption shows that about 3400 African-American children could be affected but not positively tested for lead poison. On the other hand, a city council noted that lest than 0.01% tested positive in Toledo.

The HUD guidelines is to have less than 20 parts per million or billion (I'm not sure) of lead for children under 6. But CDC recommendation is below 10 and the city is 5 but advocacy groups asking 0.

There was an article in the Toledo Blade newspaper recently about a case of a child lead poison and when the rental house was tested it was negative. It turned out the his grandparents owner occupant house where the problem existed as the kid was spending most of his time. 

We all love children and want to shelter them. At the same time, this law is targeting landlords of SFH and duplexes of 1 and 2 units only. However, how about large apartment units and owner occupant homes built before 1978? Don't the children in these buildings count?

I encourage everyone to attend the city council hearing as they want to our input and implement and adjust the ordinance before a final decision.