All Forum Posts by: Andrew Fidler

@Rebecca G. - I own LaPlante Real Estate located about 2 miles from the Ohio Cashflow offices so that would be a resounding no :)

I did keep my real estate license with Engelo and Ohio Cashflow for a few months when I first started as a realtor so I am reasonably familiar with things over there.

I am a competitor however we have distinct differences from Engelo and both companies respect each other. (That’s chapter 9 - It Doesn’t Matter How Big It Is  and sub chapter There is a big problem with jealousy)  @Engelo Rumora and I don’t spend energy tearing down each other’s buildings, we stay colleagues operating in a town large enough for the two of us. 

I was not asked to make the review nor compensated in anyway. I would hope someone would do the same for me should I ever try for the ultimate and publish a book!

Happy New Year! I am surprised I haven't seen any forum activity yet on Engelo Rumora's recently published book The Raw Truth to Success In Real Estate, available on Amazon. I'm going to post the sections of the book that spoke to me, a fellow real estate professional with over a decade's worth of experience in the Toledo rental property market. There are a hundred other ideas that are waiting to resonate with the reader, regardless of experience level!

This book starts with the classic Engelo disclaimer that you will be told the TRUTH and most people, especially in today's society, are going to get their feathers ruffled. Having spent many hours with Engelo in person I can honestly say that the book is a very professional version of Engelo and you have to be pretty thin skinned to take umbrage. Great Job, @Engelo Rumora 

Don't Be A Lazy A-Hole­
This concept is crucial to success in the business and the reason I read the book on Christmas Eve and am posting the review on January 1st... successful people have a habit of being quite busy! My gold nugget here (I'm paraphrasing): "It's a numbers Game. Spend 14 hours a day, seven days a week, for two years... only THEN will you begin to master real estate. You have to put the hours in!" This is something I wish the professional realtor classes taught. You can't excel in any area of life whether hobby fly fishing or as an electrician without putting the hours in to learn. (See also Outliers - The 10,000 Hour Rule by Malcolm Gladwell)

Cash Is King
I think it's because I started my investment in Toledo rental properties (2009) when banks weren't loaning, prices were crazy-low, and CASH WAS KING that I have always stuck to that method for purchase. I buy properties as-is with quick 7 day closings at prices that reflect a good discount. Be aware that the infamous BRRRRR method has its value in better neighborhoods provided the investor settle down the number of refinance events, or their cashflow will be eviscerated by closing costs and the associated fees. Especially in a hot market; offering a seller simple and speedy terms will move my offer to the front of the pile and always commands a discount. (See also the chapter: "Leverage is for peasants")

Cashflow is Queen
If your portfolio is bringing in cash each month, then you can survive minor expenses and even a few major ones without coming out of pocket, provided the cash isn't withdrawn every month. A BIG lesson is "Have $50-100k saved up before you buy your first property." This saves you from over-buying and being strangled when two major repairs happen at the same time. I assure you, if you allow your cash reserves to dwindle, that's when a sustained cold snap in January ruins two furnaces the same week.

Tell Friends and Family to Screw Off
This is the unspoken reality of the 10,000 hour rule and Engelo's Don't be a Lazy A-hole. Your social circle will change and truly it has to change. In 2009 when I immersed myself in the world of foreclosed real estate, it wasn't a golden age of excitement for me; it was a nose-to-the-grindstone time when the automotive industry laid off young project managers and the market wasn't hiring. Thus, I was choosing to spend effort rehabbing properties on my own faster than my bank accounts could run dry.

Middle-class salaried friends of mine (working normal jobs) who wanted to go out for beers at the pub, were completely mystified why I would buy real estate when the talking heads on the news were telling them the market had crashed and to run away. I quickly realized that my whole perspective changed to focus on my 10,000 hours. All I talked about was real estate (and for those of you who have spent any time with me, it's STILL all I talk about). The point is that I ended up distancing myself from the majority of my old friendships. Most couldn't understand working after the 9-5 grind and some were disdainful of self-managing tenants. You will change who you are as you evolve, it's normal. As Engelo and I can attest, this commitment may keep you pretty isolated outside of your team.

Why Most Realtors Suck
Speaking as a licensed broker who started out as a client of realtors for many purchases, I can attest to the truth in this concept. Successful realtors have their own 10,000 hours committed. This means they have defined their innate success and established the network that helps them become great. Chances are rental real estate isn't their focus, and requests from newbie investors seeking to use a "Million Dollar Club" agent will go unanswered or be marginalized... worse yet, if you are successful in having an agent with dozens of $250k plus SFH sales under their belt, they will be zero help advising the newbie on the purchase of a $60,000 SFH to be used as a rental.

This would be exactly why my brokerage LaPlante Real Estate focuses on investment properties as our core competency, and seeks to attract agents who are passionate about all types of investment properties (SFH, MFH, Commercial). It's difficult for agents in a typical brokerage to have enough of the resources to evaluate potential investments, let alone provide property management services and repairs after sale.

Thinking of getting your realtor's license because you are passionate about investment property??? Read this chapter… he extols it's a sales position with commissions and will require a separate 10,000 hours of focus! Some investors make amazing realtors; some realtors make amazing investors. I can personally say I am a far better investor than I am agent. That's why I co-lead a brokerage and head our division overseeing rehabs, repairs, and my fingerprints are on every challenging job we quote. You do not have to be an agent to be a successful investor. You will want an agent on your team, regardless!

Beware Of The Devil In Disguise
Property Managers Suck! Especially when that PM is the owner who doesn't have the skills to successfully walk the tight rope of Owner vs Tenant while balancing the public interest with fair housing and habitability standards!

A quality property manager can make or break your investment portfolio. I personally operated my portfolio out of necessity and spent the pre-requisite 10,000 hours to learn how to PROFITABLY walk the tight rope. It was after all, 2009, and that's what being broke signs you up for… the third or fourth 10,000 hour commitment. If you aren't going to commit the effort to creating a PM business complete with processes for rent collection, eviction, repair/rehab, and accounting, then spend some time choosing a CAPABLE and ETHICAL property management company!

In closing, Engelo has a solid outline for success in real estate with The Raw Truth. There are chapters on flipping, wholesaling, and negotiating that didn't resonate with me, but may with you! To channel my childhood favorite Reading Rainbow: "…but you don't take my word for it.” Grab yourself a copy! I look forward to hearing your own thoughts about the book and what spoke to you.

43604 is one of the zip codes I own ZERO in. There may be a deal if the houses are properly maintained but the area and prices and month to month leases suggest this is another deal waiting for some poor out of state buyer to ring my phone to bail them out of. 

Be careful. 

@Matthew Amabile

I buy all the time but have seen a spate of really shady wholesale deals coming through the market this year...but sure let’s take a look!

Hi @Aaron Bashore, superb question! 

I have had many experiences with rent-to-own deals as owners transition them over to us for management and have yet to find one which was remotely fair to the tenant/buyer or which concluded with the tenant/buyer becoming a home owner.

These are typically arrangements where guru's at REIA meetings wink and nod and say how great these deals are for investors because "THE LANDLORD DOESN'T HAVE TO PAY TO MAINTAIN THE HOUSE AND THE TENANT ULTIMATELY NEVER BUYS THE PLACE SO YOU GET TO DO IT AGAIN AND AGAIN"

Usually the deal is structured something like: Option to buy the house for the next 5 years for $95k (market value is $60k), pay $4000 cash to secure option, and pay all utilities and perform all repairs under $500, $100 from each rent payment goes to closing costs should house ever close. (Let's also detail that the house was bought for $20k and the owner put $5k into the house to get heat, water, and electricity active but the home but fundamentally the home would fail any basic HUD habitability inspection)

At the end of 5 years the house most likely will still be worth $60k and the tenant will have $6,000 of theoretical equity to purchase the house with the landlord knowing full well any bank will require the buyer/tenant to come out of pocket ~$30k to cover the gap in equity.

I have seen these renew themselves to attempt to help appreciation catch up with the contract price and I have personally met with un-educated tenant/buyers who thought this was a good deal and are furious when they realize they put thousands of dollars down and really can never really purchase the home.

I have walked numerous homes and communicated with the owner to show them what happens when a broke un-skilled tenant "fixes" the house for a few years...if it isn't actually falling apart and many times even if it does they ignore it. 

Lastly it muddies the relationship between landlord and tenant...in the eyes of the law the landlord is liable for the habitability of the property regardless of a separate contract (try to argue with Toledo City Water that the lease specifies the tenant has to pay that bill...try to argue with the Dept of Neighborhoods on a blight citation that the tenant lives there and controls the property and should be the one showing up in court). The lease option / rent to own confuses the owner as to who is actually in charge.

The tenant also gets confused since they are partially empowered as a homeowner...pepto-pink wall paint appeal to the daughter, why not! Three stray cats? Of Course! Demo the bathroom of a standard tub and install some tile and glass block abortion half finished when you finally evict the psuedo-owner/tenant (yes this one happened to me).

In conclusion - I am sure many folks on BP will tout the $$$ they made from lease-options and rent-to-own, I know many in my REIA who have the same position - I have made a solid rental business for over a decade with a simple rental relationship. A clear, no-gimics lease where the tenant performs absolutely zero maintenance and has no authority to change the property and no confusion over who owns and retains responsibility for the habitability and conformance of the property.

My personal opinion is I receive rent income for the rent of the property and there is solid client basis seeking to rent the property, I don't need to use my power as landlord to offer some complicated "buy here, pay here used car lot whose true business is in repo'ing those cars from the poor as soon as they default and restart the process".

Please don't feel this is any form of an attack, I am simply sensitive to the blighted reputation of landlords - contracts such as this are one of the legit reasons the public doesn't like us. :)

Lastly - I have sold several homes to tenants...I set them up with a bank who typically pairs them with a credit repair specialist...the tenant can buy the house at any point when they are ready at the market price whatever that is when they are ready (if the home appreciates then I gain, if the market were to crash like in 2009 by 60% I would decline sale and facilitate the the tenant in purchasing something on the market) . The tenant becomes a home owner receiving all the empowerment our country has in place to help first-time home buyers and I go to a closing at a title company and receive a check. With one stroke of the pen the Tenant becomes Home Owner, simply and in my opinion ETHICALLY. :)

I was invited to the Lead Coalition reveal for the ordinance about a month ago, the third try largely seems to be a reflection of the first. 

I think this ordinance has the proper administration behind it along with new blood on city council, I look forward to seeing the ordinance progress to improving children’s health and moving irresponsible landlords out of the business.  

Matthew I operate in both zip codes daily, I am loading building materials today but will respond to your message! 

@Matthew H Lohens- are you local to Toledo and self managing? 

I would get a team together before I would buy anything.

My findings have been the online data for 43608 is sketchy at best, I have been operating there for over a decade now and a few hundred properties but I stay in the top 20% of the zip code...and that area changes by the block from nice to ok to OMG to “glad I am carrying two firearms today”. 

You do have the correct approach that it’s a cash flow king over there...just avoid the wholesalers and inexperienced realtors who don’t know the area.

Getting a purchase under contract is easy. There are properties for $10k that arent worth a buck and $30k properties that should be worth $10k.  Be very careful is my advice. 

Dave are we cash out refi-ing on a property you already own or trying to get a sale? 

I would avoid hard money if at all possible, it’s the least desirable interest rate this side of a mafia vig. 

@David Denzy - is this a mobile home park?

Gravel roads are frowned upon inside city limits, is this located in a suburb?

I would consider paving the whole park as a equity move or approach our many local banks for custom financing. Where do you bank now? I have leveraged that relationship several times now to land challenging deals!