All Forum Posts by: Andrew Fidler

Anyone who is interested...it's a setting called Mute User under your notifications. 

@James Wise Nothing personal I'm sure your drip campaign of multiple posts a day drives newbies to you in droves but those of us who prefer more personalized dialogue it's just daily spam from a site we enjoy being part of. 

:)

@Moderators How do we "Unfollow" or "Unsubscibe" so we don't get multiple alerts for the daily spam post listing every city in Ohio? Do we have to simply turn off our notifications by town so we are unplugged from BP?

It's getting to that point for me.

Adding...turn over and vacancy seem to be the big topics that BP doesn't discuss.

SURE a C- property looks like a winner on paper. $800/mo for $40k is 2% rule, that's crazy!!!

Longevity in the property is where the reality comes into play.

If you have a resident renting for 12 months and they pay the whole amount but move out, you will have to repair the property back to that top-of-the-market $800 range to be competitive. Figure a few grand to paint rooms, replace carpet in a room, deep clean and spruce the property, replace a fixture or two, etc.

If you have to replace your resident annually the $9600 total income will get a gut punch.

The true value of the higher-end neighborhoods is residents know if they move out of the home they have it's a challenge to find another, especially if they have been there a few years and have a competitively rewarding rent rate.

All this really is is basic economics...sell ten custom widgets for $1000 or 100 standard widgets for $100 each. The income is the same, the difference is how hard you work to achieve it.

Parting thought, I also purposefully lag the top of the rental market in my personal portfolio...if a property I have owned for 4 years was rented at $900 and has a good resident then even though the value of that property may be $1250 I am still going to put this specific resident at $1050 so both the resident and my portfolio are winners each year and we have incentive to keep it that way.

@Dave Dumoulin Hey thank you for focusing on Toledo Dave!

Defining the class of the neighborhoods is the tough one to start that grade C out for...I have some clients unused to the mid-west who are used to high-end suburbs who consider our better areas a B- area.

Personally, I classify the C- anything I verify I have easy access to my spare magazine before I enter a vacant property. B grade property walks are attended by my children to run around and tell me which bedrooms they would pick if it was their home.

43605, 43608, 43609 are the popular zipcodes for bottom-budget value purchases...I manage a ton in these areas and my personal portfolio contained over 40 43608 properties at the peak. 

20% of these properties will be crazy money earners, 20% will be astounding money pits, and 60% will fare average.

I have evolved into the nicer 43612/43613 for my personal portfolio and find the properties earn consistently and far smoother than my 43608 houses. ($80k renting for $1200 vs $40k renting for $800 multiplied by the ratio above vs boring consistency of the nicer area) 

Oh and I have zero excitement for apartments. I have been investing in Toledo, OH since 2009 and owned 2-12 unit buildings and find they are way too hyped (read lots of guys from BP want to pay too much for them) and the reality is residents in Toledo are ultimately seeking a house with a yard and a garage so as soon as a resident improves their financial situation they move into a house. Additionally Section 8 owns a ton of apartment complexes so there is aggressive competition when compared to the single family vouchers that are very commonly available to us small-time housing providers.

Love to talk Toledo, again thank you for the interest!

@Sean Doyle - Toledo is the only city I operate in. I have found enough business and made enough money not to need to expand outside of this market.

Section 8 is a whole different ball game but I find the program is unique in that it's a 3-party relationship adding the variable of a government agency. The ways around that are to build a business around supporting their voucher and inspection program and spending no small amount of effort ensuring they are smoothly servicing your rentals. 

I also advise participating in regular meetings with them. Ours is Lucas County Housing (LMH, previously LMHA). I serve on committees when able, and generally be understanding that a program aligned with our federal HUD is going to have it's inefficiencies. The result is we have supervisors and executives we can reach out to assist us if a property is truly being ignored by a case manager.

Is it work? Hell, yes. This is the foundation of why LaPlante Real Estate is based in portfolio management and property management... my personal portfolio started in 2009 and I find the majority tends to be Section 8. 

Does it make money? Well, my original SFH purchased in 2010 still has its original S8 resident. I believe it started at $700/mo in the good old days of the recession and is now up to $1000 (undervalue about $150 for that area). The resident is great and the rent rate reflects that.

BiggerPockets has a TON of misconceptions about renting. The first misconception is that you can declare a property headed onto the market only S8 eligible, refusing to consider traditional applicants. The second that the ~$1400 face value of a 3 bedroom voucher is going to get you that rent rate). It's not that different from a normal rent increase. Very commonly the resident pays a portion of the rent so your rent increase will affect their budget and their lives. 

It's not free government money being given to careless, loafing, dead end residents. @James Wise gonna have to disagree with the "lie cheat steal" concept regarding residents.

Any resident has the potential to be less than desirable. In my 15 yrs investing in Toledo, operating S8 rentals, I have not found a statistical difference between normal and subsidized residents. If anything, when you accept rentals in the higher-end neighborhoods, the rent rate exceeds the voucher limit, meaning the resident has to have their own income in order to qualify. These I have found are real, striving parents, working their butts off to provide the best housing and school system for their children.

My ethos in this approach is exactly why we at LaPlante refer to them as Residents, as we consider "Tenant and Landlord" to be dated terms and rife with negative emotion. We spend our time here in Toledo providing responsibly managed housing and treating our residents with the respect any of us on this forum would appreciate. 

 $80k are the renovated prices as long as you are shopping around a bit. I also manage for some folks who buy $100k and rent for $1400 so there are a few ways to make the numbers work.

This is a snapshot of Zillow...in the nicer areas you can buy most anywhere since you are sniping the rental-grade properties amongst the owner-occupied prices.

@Michael P. Nope, I am down to one house in that zip code!

When you can sell a 43608 and buy 75% of a 43612 with 75% of the income but enjoy a higher class of residents with double the rental demand it's a solid strategy.

I wouldn't say 43608 (or 43605 / 43609 and a few others) doesn't make money...it's that your portfolio of ten properties runs about a 40% chance of any property being rented for 8 months, requires an eviction and full rehab (the bane of realized income). A game of wack-a-mole.

The more stable areas (a solid B vs a C-) experience for more engagement by the residents to want to stay in their home since they are reasonably hard to find and qualify for.

Hope you are doing well my friend!

https://www.toledoblade.com/opinion/editorials/2023/12/12/ed...

(Text of article posted below)

It's nice to see Toledo made the national scene...Realtor.com Forecast of 2024 Top Housing Markets - Toledo #1

Well, Realtor.com is more bullish on our coming real estate year than I am. I anticipated a strong but stagnant year for growth (Typical Toledo, right? We lag the market's highs and lows, just plodding along with consistent returns.)

I have agree with the author that Toledo real estate is priced very competitively nationally and our rental returns exceed the 1% rule frequently. I spent 2022/2023 purchasing single family homes in my preferred investment corridor within 43612/43613 zipcodes. $80k will net you $1200/mo.

That said I am of the opinion that rent rates (up significantly since Covid) are plateauing, I don't expect to see them climb significantly higher.

Regardless, factor my position of being a cash-in-hand personality who doesn't much care if the hype is telling us to buy-buy-buy or run for the hills. I invest where it makes cents and the news either validates me (yeah!) or doesn't (like the talking heads know the future).

I look forward to a stable year in 2024, with growth according to the article below!

DEC 12, 2023

Good news for Greater Toledo homeowners and all concerned with prosperity here comes from Realtor.com’s forecast for 2024.

Economists for the largest online real estate website predict Toledo will be the hottest home market in the nation next year.

Affordability and stability are behind the Realtor.com projection of 8.3 percent price gain for Toledo homes in 2024. Toledo’s median home list price of $200,000 is less than half the national average while price volatility has been muted compared to the wild fluctuations in much of the country. The real estate website expects Toledo home sales to increase by 14 percent next year, because the lure of low-cost housing has sparked a surge of buyers.

Both buyers looking for a place to live and investors planning to renovate and rent find Toledo attractive, according to the real estate website. The hot-housing markets, according to Realtor.com, include Los Angeles and San Diego where median home prices top a million dollars and Grand Rapids, Mich.; Rochester, N.Y., and Springfield, Mass., where prices are much lower but still well above Toledo.

The significant boost in pay won by United Auto Workers members at Stellantis and General Motors in Toledo and rippling out into the auto-manufacturing supply chain boosts buying power in the local economy and is surely behind the economic projections of real estate sales growth exceeding all but one of the top 10 markets. Even if California will not relent on adjusting emission control standards, and the more than 1,000 supplemental workers at the Stellantis Toledo Jeep plant who are expected to rise to full-time permanent status are laid off, on balance, local incomes are rising.

For the vast majority of individuals, a home is the largest single investment of a lifetime. The financial net worth of residents who own a home is much higher than those who do not. In many locations, including some of the other hot-housing market cities, appreciation has made homes unaffordable to those who don’t own a house they can sell for the funds needed to make a move. Toledo housing is affordable to a much higher percentage of the work force than the average city. This fact will help every employer in the region keep and attract the employees needed to make them successful.

The Realtor.com analysis of Toledo notes that we’ve seen our “share of troubles over the past few decades,” but the real estate market has remained resilient with good options in the city and the suburbs. This assessment is another powerful lure to attract people and investment dollars. Declining local economies invariably hurt home values. Resilient real estate markets are safe for investment, and it’s tremendously important that Toledo keep that label through policies like the proposed lead law that match standards in nearby suburbs and comparable Ohio cities.

Toledo is the only Ohio city in the hot-housing market top 10, and Grand Rapids is the only Michigan location on the list. The attention is invaluable to Toledo, and the analysis is reassuring to local homeowners and potential buyers and a great benefit to local economic development.

City leaders must work diligently to take advantage of the positive notice and make reality match the prediction.

@James Wise yeah I have to agree, $700 range for a single family home. My 4-unit ownership has been a few years but was $1100 fully loaded.

@Douglas Furia - all depends on the asset class however...there are neighborhoods in Toledo have personally proven aren't worth investing in.