All Forum Posts by: Andrew Fidler

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.

Hi @Sasi Raj I have been busy rolling our property management over to another year, sorry for the delay!

I continue to use ACV coverage on my personal portfolio and have made a couple claims over the past 15 yrs investing in Toledo. 

If you use ACV coverage plan on some legwork to establish the value of the claim (and don't make claims for anything small like a puncture in a roof). The adjuster will not do most of the work (and you don't want them to, your numbers will be far more profitable than theirs).

When you have a claim the issue is you have to establish the scope of the repair, THEN deduct the depreciated value of the items. (I don't know their tables by heart, this is just a ball park)

Hallway floor - 5 yrs old, 20 yr lifespan - you get 75% value

Wiring - 45 yrs old, 50 yr lifespan - 10% value

Drywall - 15 yrs old, 50 yr lifespan - 70% value

So you have to walk the job with the adjuster, define the scope of what they agree is part of the claim, then solicit bids to complete the work, then have the whole project reduced based on the lifespan calculation, and finally get a check.

I have been through about six claims in my portfolio and represented owners in about ten times that amount. In general we ensure the base quotes come through high-dollar restoration companies, we get maybe 65% of that amount, and the whole job is funded through a normal contractor with a few reductions in quality (no new hardwood floors, it becomes LVP for example).

As long as you have an experienced project / property manager on your side you will do nicely on claims.

Lastly, I chose ACV coverage for my portfolio because I am not hand-to-mouth broke...if a claim comes back a few grand short it's not a crisis. Personally, the cheaper coverage has proven appropriate in my case...each investor's position will be different of course!

@Christopher Sandys

I recommend you contact the Lucas  County Health Dept - lead paint program and convey your opinion.

They will share statistical data and analytical data that will debunk your impression of lead paint exposure. 

I am both a property managment broker, property investor, and a state of Ohio licensed lead paint abatement contractor. Meaning my license comes into play after children have been poisoned by lead dust and there is an Ohio (enforced by the Lucas County Health Dept) condemnation order requiring the hazard to be abated or the home will be condemned. (They start out these cases with a ~50 page report documenting the analytical lead levels both in your paint AND in the dust…meaning the minute you receive the report you can never again check off the Lead Paint Disclosure Report as “no reports and no knowledge” when renting or selling.

I am assisting a client presently who passed their City of Toledo Lead Safe Certifiicate in Fall of last year and just this Spring of this year received one of those glorious health dept report  (looonnnggg story).

So, my friend I fully respect your agitation and point of view, I recommend we keep it around the camp fire and not on an online forum for all to read.

Lead paint is a pervasive issue across all cities building during the time of its use (the whole Eastern Sea Board and all industrial centers since 1978…a lot). It’s a major concern and whether we like it or not there is statically significant data showing young children of under privileged families being the  population we find with elevated levels of lead dissolved in their blood. 

Besides the City of Toledo Ordinance…the only mechanism to detect problem properties and lead poisoning hazards is to test children’s blood after exposure (required for all public aid). 

So a doctor walks in the room with you and your child and said “they have  ____ ug/dl blood level of lead, here’s what we can do”.( Hint, it’s not a lot and what is basically effective is incredibly painful for the child. Image hearing that while working your butt off to keep your family afloat while you work your butt off.

The flaw in your argument that we have far lower lead levels NOW than before we discontinued lead paint usage in the country is synonymous with “the presence of OSHA has reduced worker fatalities, it’s only 10,000 a year and that’s totally acceptable from my opinion as an owner of a construction business”. I would advise such an opinion will be both personally litigious if an accident ever occurred at your company.

Epidemiologically speaking there is no safe exposure to lead so you are 100% correct the number keeps being reduced…just don’t expect those reductions to stop anytime soon. As new new studies are conducted showing IQ, emotional, aggression and a many other acute and chronic symptoms, our challenged population face are analyzed and we decide we are still seeing documentable effects.

The lead ordinance isn’t perfect, I fought it the first time and I’m watching it the second time. Don’t get me wrong, my family lives partially on our  personal rental portfolo. 

presently we do not have a better option but it IS a first step. 

I have met the families who have affected children…like it or not in Today’s world we cannot rebut this issue with “it’s costing me $ and I don’t like it”. (Aren’t we always unhappy with the rent rate? It’s an ongoing conversation at LaPlante Real Estate, whatever your properties earn today, another 9% looks much better and you aren’t satisfied till you see that in your checking account) :)

I am sorry you bought one of those properties that need a ton of work to be lead paint certified. My process since the last ordinance era was to only buy properties that could be easily certified…OR were priced properly so I could install vinyl siding / windows and never worry about exterior lead paint again. 

Anyone is welcome to pm me if you have questions, Chris I don’t want to come too hard but we need to be aware that these statements live forever in the digital ether. I am ever vigilant that while presently I haven’t seen personal liability claims originating from child poisoning case but I anticipate once there is an enforced City of Toledo Ordinance, affected children are the low-hanging-fruit for litigation.  
 
Enjoy the holiday weekend everyone!

@Anthony Petrozzella wow a blast from that past, 12 years ago!

SOOOOO somewhere up here in BP land you will find me talking ~2017 about my original section 8 house here in Toledo and projecting that I had collected ~$60,000 in rental income.

Guess what, I STILL have that house rented section 8 to the same resident. I think the original rent rate was around $700/mo so given that and 12 yrs of continuous rental we have now cracked $100,800 in gross income. Sure the house had repairs and maintenance but it's been a solid earner so Section 8 (LMH - Lucas Metro Housing) may be my nemesis with delays and bureaucracy but as long as you push through the silliness it's not bad at all over the long term.

The current rent rate for my area (43612, 3/1 SFH) is $1200/mo.

I do NOT have my resident raised to the market rate or apply aggressive increases...the house is presently rented at $800. 

WHY??? Because the property turns a massive profit without getting greedy. I bought the place back in the good-old-days for $11,500 and learned very early on if you raise rents to "new-condition pricing", residents commonly respond with a host of repair requests seeking like-new condition for their rental.

Real estate is an amazing vehicle to create wealth, I just try to build it slow and steady and not sweat making it aggressively by over-taxing the poor of the community.

(Before someone jumps up here and says "who care's section 8 pays all the rent whatever the price" when you spend a few years participating in the program you will find that voucher amounts vary widely from 100% funded to less than 25% as the residents earn a wage and contribute to their housing. I am careful how the increases in rent affect the resident's living situation followed in turn by the resident's attitude with me - their property manager - and demands for repairs. It comes down to each person's property management theory)

Thanks for asking about this property!

@Josh Smith Property management is my purpose in the Toledo marketplace, I leave the transactions to the excellent agents. Happy to see how we can help!

@Christopher Sandys - 

I don't disagree that the requirement to prepare-for and wipe-test these properties is a burden; the statutory mindset I think you are missing is that rentals are a business and subject to different regulation than private homes (think restaurant health dept regulations vs a private kitchen). That said I was blown away by Andrew Mayle's abilities to request the court system to correct constitutional law and succeed in the last lawsuit; we will see how the 2022 July filing fares.

My position has been the wipe tests are arduous and largely unnecessary provided peeling paint surfaces have been properly cleaned, scraped, and painted. (Section 8 requires zero peeling paint but does not require wipe testing for example). It doesn't sound like your paint job would pass a Section 8 inspection so the needed repair isn't something I would blame on the Toledo lead ordinance...if you bought the property properly then you got a discount at purchase and are simply waiting for Spring to make a repair.

I have been discussing this ordinance since ~2015 and your response is quite understandable. The adjacent City of Maumee (also enacting their own rental property ordinance, about 10x worse than Toledo's, and similarly supported by the mindset that businesses and personal property are not afforded equal protections...that said I am expecting a lawsuit there too) just mailed out post cards to the effect of "Do you know of a blighted, vacant, derelict, or decrepit property? Report it to the city so we can sue them to fix it!"

Toledo would be well advised to use the same approach as this would net both private and investment properties as well as identify those the public identifies as an eye sore.

Parting thought for you - below is a recent lead paint article that was published 1/25/2023 and from my view is the reason we will never see a city devoid of a lead paint ordinance...children are being lead poisoned and this is not a result we can permit or promote as a society (what you permit, you promote).

My personal portfolio is lead-safe certified, the process is pretty simple provided the structure would pass a Sect 8 inspection, and I am very supportive of our LMHA voucher program so they are all renovated to that standard anyway.

https://www.13abc.com/2023/01/...

TOLEDO, Ohio (WTVG) - Toledo City Council passed an ordinance that declared lead a public health emergency and replaced the existing chapter of Toledo Municipal Code with a new one aiming to help those impacted by lead exposure.

According to the World Health Organization, no level of lead exposure is safe and it can have a devastating impact on children. The experts estimate that a million people die from lead posing each year, many of them children.

Councilwoman Dr. Tiffany Whitman says this move has been long in the works. “We want to work with landlords, work with our tenants to make sure that they’re safe and that they’re living in a space that is lead-free,” says Dr. Whitman.

The issue hits close to home for Councilwoman Vanice Williams, as one child at her daycare facility was hospitalized.

“The highest level in Lucas county, that they had ever seen was in a child. She’s five. Well, she’ll be five, come on now she’s a baby,” says Williams.

According to Williams the issue primarily impacts Toledo’s vulnerable communities; black and brown people, and low-income residents.

Williams says the council is addressing this issue to protect the next generation. “

“We need to focus on the little people, our future. And look at the learning deficit that lead poisoning causes, it’s detrimental to our society,” says Williams.

If anyone is experiencing lead exposure, contact Engage Toledo or your council person for assistance.

Hey there Engelo,

I must have missed the offer to buy us out :)

Glad to see you back in our small-large or large-small town!

Looking forward to another great year in Toledo 2023!

Text of the article for those of us who have no interest in paying the Toledo Blade for access...

https://www.toledoblade.com/lo...

A civil lawsuit seeking to block Toledo’s lead ordinance has forced the city to push back its deadline for residential properties to be certified as lead safe as landlords face the potential of $10,000 fines.

After a similar 2016 ordinance was struck down by the court system, Mayor Wade Kapszukiewicz worked with city council to craft an updated version of the Toledo Lead Ordinance, which then passed in December, 2020.

The ordinance requires that owners of 1-4-unit residential rental properties or family childcare homes built before 1978 have their property inspected and certified lead-safe, as well as register their property with the county auditor. Inspections must be completed by a local lead inspector who visually inspects the interior and exterior of the property and collects dust wipes to ensure it’s up to U.S. Environmental Protection Agency standards.

The lawsuit was filed Monday in Lucas County Common Pleas Court.

The city has agreed to not enforce the lead paint ordinance until Aug. 1 after the original deadline to get certified and register properties with the Lucas County auditor was June 30. The ordinance would apply to about 6,000 Toledo properties.

Gretchen DeBacker, the city’s director of marketing and communications, said that the city is still actively working to resolve the issues that have been raised in the complaint.

“The parties have agreed to meet and try to resolve issues that are potentially outstanding in the plaintiff’s claim and trying to avoid any protracted litigation,” she said.

Ms. DeBacker added that even with the deadline, the ordinance “is going to be implemented.”

“Residents and landlords are encouraged to still take steps to ensure that their properties are lead safe and begin the process,” she said.

Judge Gary Cook of Lucas County Court of Common Pleas signed a consent order on Tuesday confirming the deadline extension. The plaintiff, listed as Charmarlyn Strong of Toledo, has agreed not to pursue a temporary restraining order hearing.

Her representation, Perrysburg-based attorney Andrew Mayle, said that he does not believe that the ordinance should be enforced at all, but that the parties agreed that the lawsuit does not need “immediate attention from the court” if the ordinance is not enforced.

Mr. Mayle said that the lawsuit was filed in an effort to bring issues forward before enforcement of the ordinance began.

“We could have sat back and just not complied and waited for them to try to cite somebody and raise this then, but we didn’t think that was the right way to go about it,” Mr. Mayle said. “We just wanted to be upfront. We asked the city to fix it themselves, they did not, so we filed our lawsuit.”

The city and the Toledo-Lucas County Board of Health are the listed defendants.

Along with the complaint Mr. Mayle included a letter from himself to Toledo law director Dale Emch dated for June 21. It asks the city to “restrain the abuse of Toledo’s corporate powers.”

The letter goes on to list three primary issues being alleged with the ordinance: there is no “coherent” penalty for violations, it assumes the health department has “statutory powers” that it does not, and that it offends the “exclusive jurisdiction” of the Toledo Municipal Court. Mr. Mayle called the ordinance a case of “legislative malpractice”.

“If this is truly a public health issue, why are most residences being left out? Why are owner-occupied [units] being left out? Why are big apartment units being left out?” he said. “We think if they’re going to do this to be a level playing field, just make everyone play by the same rules.”

Although there is only one plaintiff listed in the complaint, Mr. Mayle said that the ordinance would likely impact “hundreds or thousands” of property owners, should it go into effect.

Those who don’t comply could be subject to fines of up to $10,000 per unit, according to the ordinance. Mr. Mayle’s letter argues that individuals cannot be in violation of section of the code in question because it “merely describes the process for obtaining a so-called ‘Lead-Safe Certificate.’”

The letter also argues that the health department does not have the ability to issue such a certificate, because it is a “creature of statute with limited enumerated powers.”

The initial deadline only applies to properties in the most at-risk census tracts. According to the ordinance, deadlines are set for units in various tracts on June 30 and Dec. 31 for every year until the end of 2026.

According to Judge Cook’s order, parties must update the court on the status of the issue by late July.

https://www.toledoblade.com/lo...

Well, if the Toledo market hasn't had enough of two prior ordinances and one faceplant in court, we have yet another twist with the Toledo Lead Safe Ordinance.

As stated above, Toledo leadership decided on June 1st to make a newscast declaring that the 2020 lead ordinance deadline of June 30, 2022 was unchanged after Covid and 18 months of inaction from the city and threatened a $10,000 fine for failure to comply by the deadline looming 30 days away.

Well, today we have an article announcing a lawsuit has again been filed against the city, and it must be pretty damning because the city has immediately announced they will not enforce their deadline until August 1st (30 day reprieve).

According to the news article today, we are being told the lead ordinance is still alive and well but enforcement simply isn't going into effect for a while.

What am I personally doing? I'm getting my properties inspected. It's not a real financial crisis unless you have peeling paint everywhere. I've seen this coming for close to a decade, so my portfolio contains a minimum of painted exteriors, painted soffits, original windows, etc. and we’ve been renovating accordingly (vinyl siding, etc).

What remains clear is that the ordinance isn’t going away, even though implementation deadlines are presently fluctuating. The lawsuit will hopefully help fix some of the administrative problems with the ordinance’s implementation… but the ordinance is here to stay and will need to be complied with.

I am most curious how this will affect our lower-end neighborhoods: houses with peeling wood siding and soffit/fascia. These properties have always been challenging, but curious how things will proceed with purchasers knowing that a $30k investment is required on a $20k house. I am seeing prompt compliance within the higher-value areas of Phase 1, and some foot dragging in the poorer areas. The true purpose of the ordinance won't be realized until those property owners who avoid or refuse compliance are challenged to comply.

At the end of the day, having Lead Safe properties improves and preserves the health of our community's children. In my opinion, those who maintain their properties are the same ones who read the news and comply as ordinances occur. We won't have a comprehensive improvement in our children's health, nor the quality of our most challenged neighborhoods, until the ordinance moves beyond those who have now complied through several iterations. Once the ordinance can finally hold our "Catch-22 Housing Providers" accountable we will see a change in the housing stock, rent rate, and the ultimate goal, the lead blood level of the city's children.

(Catch-22 is described in prior posts...it's a $400 property in a $750 neighborhood where the family is living in unsafe or unsanitary conditions and cannot afford to exercise their right to complain or move. If someone like LaPlante Real Estate takes the property over, $40k in repair will be conducted and the property will promptly rent for $795 potentially forcing the family out. Ultimately the elimination of Catch-22 properties is the goal of the ordinance but will result in higher rent rates, increased property values, and forcing more families onto rental assistance.)