All Forum Posts by: Angela Harding

Great advise Michael Smythe. 

My addition to the topic: 

Do not use referrals from anyone that is getting paid a fee to advertise companies. I have seen James Wise refer people to companies in Toledo and when I sent an email about stopping the fraud in Toledo they sent me a form to pay a large fee to advertise. The company that was recommended was a company that got tons of people into bad investments. Nothing against James Wise, just make sure you do your own research, I'm sure they have good people too. 

You need to contact these companies yourself and interview them. Go to Cleveland and meet the broker personally. If the broker will not give you the time of day, move on. If there is no broker, move on. In Ohio a property management company must be a licensed broker to run a management company. 

1. check public records to see how many evictions they file monthly. 

2. request references

3. ask for references from contractors that they use that are licensed. 

4. check reviews . don't look for 5 stars, but look for reviews from other investors. Read tenant reviews but know tenants put bad reviews up when they are being evicted. So look for some good reviews from tenants also. 

5. look up the state license- make sure the company name is the same as the license.

6. look for a company with in house maintenance with certifications. 

7. beware of companies that have full fledged maintenance companies that are seperate entities. 

8. ask for a copy of the workmans comp insurance endorsement. 

9. ask if employees are on payroll and covered by work mans comp.

10 request a copy of liability insurance and E an O insurance. 

11. most of ohio has led base certifications, ask about the lead requirements and how they handle them. 

12. ask if the units are inspected annually and by who? ask if you receive pictures of any units during inspection as well as any work performed. 

13. ask for a copy of the policy and procedures for leasing units and the written standard qualification practices. 

14. ask how many units they have in management and how many staff they have and what positions they hold. On average there should be one employee in the office per every 75 units. 

15. ask what software they use and look up the software to see if you like it. 

16. review a copy of the management agreement.

Most importantly, go visit the city and management offices. 

Cleveland and Toledo are both very difficult cities to find good management in. 

I'm doing more research because I do not understand how the SEC or Licensing bureaus are also not involved. How there may not be some fraud here. Here is what I understood has happened. Hughes Private Capital offered a fund which was Guardian Fund LLC that purchased properties. They have unsecured creditors of over 5 million dollars and secured creditors as either loans on properties and/or owners of properties. They have several other LLC's such as Home Partners that purchased properties at low prices and then quit claimed them to Guardian and then Guardian sold them to people who needed to 1031 exchange money into another property. The properties I am seeing in this situation in Toledo have been sold to the 1031 exchange buyers at extreme prices. One of the homes was bought for $25,000 and exchanged for $134,000. Property being worth around $35,000. Krch Realty managed these homes in several states. They are now out of business. Instead of owners receiving their own rents, they pooled the money for all investors and divided it out according to the percentage of their investment. They were receiving decent funds then a bunch of properties ended up vacant and one of the big money backers pulled his money and now its a cluster mess. People are now locating their properties and trying to find people to manage or even if they have tenants, who is paying, who is not and finding the homes to be in sub par condition. That is the information I have at this time. But I had seen a previous post in 2019 i believe about investing in this fund on here. Was wondering if anyone else on here had more information.

Continued.. so the work upfront and be preventative . Most importantly use a good software system that tenants can communicate through with work orders and auto pay. That takes away from being interrupted through out the day and rent collection. 

Good reply. You are right. Do your work up front. Establish good relationships and processes and it shouldn’t be a hassle. But good properties do the w

If you can find a good PM then they will be worth their cost. They will find great tenants, reduce turnover, and keep your property value high. If you choose one that is more reactive than proactive it could cost more than 10%. Make sure whoever you hire has great written procedures and inspects the properties by yearly. Make sure they use licensed contractors when appropriate and not a sub maintenance company that they own. Poor maintenance is a way a PM can cost you money. 

If you are moving it from a personal name to an LLC there is an exemption form for taxes you also have to fill out and file along with transferring the deed. The type of deed is important also. I use a warranty deed on the majority of my transfers. Just be sure you don't do something that voids your title insurance.

As the Guardian Fund LLC bankruptcy continues, we have been getting several calls regarding properties that owners are just now figuring out are titled in their trusts. If there is anyone that has been a victim here and needs help in Toledo or Cleveland feel free to give me a call. We are working to help people evaluate their situation and manage properties while these court actions are in process. If anyone also has updates please feel free to let us know what is going on here. It is just so disappointing how Ohio always ends up in the middle of peoples get rich quick investment ideas.

Cool! Good time to do that. 

Sorry I missed so much on this thread. Good conversations here. 

1. JD Martin .... I too would say no one can manage my properties as well as I do. You must be someone with really good experience. I do not see that much. I see more investors who start out good but then acquire too many properties to handle by themselves. It becomes a job and they lack the "processes" to keep them full, or keep maintenance up. 

2. Real estate as passive income can be true. But there are not many property managers out there who really make this happen well. Growth can be cruel to us. I would say my owners have a choice. Some like to be really involved in decisions, others I have not talked to in a couple years. They monitor their statements like they would any other investment.  Some I see once a year and they come to walk through all their properties and make a list of upgrades they may want to do over the next year. 

3. Toledo and the upcoming lead laws. They are still working on "what type of testing, how and who" will be done. Last meeting I went to council was not in favor with how the legislation is written and wanted to make the public more involved, more meetings, more access for those who work during the day, better meeting places and get people involved with groups in each sector of Toledo. I think we still have a long way to go on this. With that said, I speak from experience when I say if you have your properties meet a certain standard with no peeling paint and they are cleaned properly after turn overs, lead testing is not that bad. When the government kept houses in property management we addressed any peeling paint first then we had the full blown lead tests done. (We had 50-60 houses a month coming into inventory) an average of 10-12 a month being tested for lead. We were really concerned at first but as we saw the test come in with just a few things such as the garages, or front door casing, some window casings, and the remediation was small, we realized it was all about prevention and up keep. I have been involved with tenants ordering lead based on my properties now and we were fine. 

4. Angelo.... I didn't know you were doing property management now. Did you guys end up getting your broker's license? Good comment on not bashing property managers but I have to say there are many who deserve it. 

I myself am only investing in single family real estate for cash flow. If and when I decide to invest in something else, it will be another business where the need is high. 

I also like rental properties because it helps me control my tax bracket. If I watch when I acquire and add on improvements I can really off set some taxes with my businesses. I also live in some of my rentals for 2 out of 5 years and then sell them and take the profits tax free. I'm not someone who doesn't want to pay taxes. When you make money you have to. However, I like staying ahead of the came and not giving it all away. I don't know of any other investments that offer control like that. 

Great info and conversations here!

I will completely disagree with the above. I do believe they will pass some sort of lead legislation but after attending a couple meetings I believe they will pass something fair. I also believe it is advantageous to force some people here, both investors and home owners to address their peeling paint. It will help values in the area. It will help the blight we still suffer from and the city will get more active with grant programs to help. I have 200 houses in management. The portfolios we built for investors all make over 20% easily and I will be the first to volunteer for the lead testing. From the beginning we have maintained our homes without allowing peeling paint, if we had to do paint we did it properly using tarps and cloths to prevent paint from getting into the ground. 

What makes good returns in Toledo is buying right, prevention on maintenance (doing your rehab right and not cutting corners) and long term tenants. I have already had tenants contact the health department requesting the free lead inspection and came through with flying colors. I have managed all Fannie Mae and Freddie Mac properties that required lead based inspection on every rental property with children under 8 years old and not one house had any more work on it than our standard turn overs or base requirements as a property manager. 

My last point is to contradict the statement that less money is made with property management than self managing. If you have a good manager you will make more money with management than if you self manage. It is about the process we have in place that creates faster turns, longer term tenants, higher rents and less maintenance. And a good process includes passing on fees to tenants and enforcing them instead of always billing the owner.