All Forum Posts by: Brian Ploszay

Ohio is a state that has some cheap housing and "on paper" some good rental returns.  But keep in mind many of their cities are declining areas.  Youngstown especially.  But also Toledo, Cleveland and Dayton.  Clearly Columbus is the place to invest.  The City has a large university and is the Capitol.  

Someone suggested giving this tenant an option to re-rent.  Don't do it.  They have proven to be a difficult tenant.

I would talk to an eviction attorney regarding this.   And whether collecting that rent is compatible with your getting them out.  Time to threaten them with an eviction, which would inhibit their future ability to rent apartments.

You mentioned you are from California.  The turn key home "industry" is selling to California residents the most.  Why?  Your real estate market is lopsided because of intense restrictions on building new housing stock.  That is the reason for the high prices (low supply), not the sunny weather.

I'd stay in your backyard because California has strong real estate.  Your cash flow will be more break even, but in the long run, traditionally there was appreciation.

Turn key rentals are something that you have to be very careful.  Often a home in a declining area is sold to you, with a decent initial cash flow.  But there are hidden costs.  Mostly repairs.  And especially the turnover costs when the property becomes vacant.  Avoid class C properties and properties in economically declining areas.

Declining areas are more prevalent in the Midwest - the so called rust belt towns.

There are two platforms that I know to sell portfolios.  One is a major brokerage who does single family rental portfolio brokerage.  The other is Roofstock.   That being said, I've always thought the best way to liquidate houses is to get them vacant, cleaned, painted, repaired and then sell.  Works well, expect perhaps for class C properties.

Sure, it is nice to keep everything in perfect order, but you'll lose out as a landlord fixing this stuff.   A cheaper way would be to break out a few errant sections and do repair concrete work.  And that would not be $5000.  

I tend to do the bigger investments only when I sell a property.  Without enough information, it seems to be a basic rental house with the one car garage port.  

PM me.  I have a key contact in that local market for that type of investment.  I"ll pass his contact info to you.

None of this will happen.  Because it can't happen.  Because it would never work.  The article is alarmist.

Providing adequate housing is something that Government simply isn't good at doing.  Inherently there will be a shortage of quality housing.   The market, or at times a private/government partnership leads to better housing choices and opportunities.

More interesting, the article mentioned Minneapolis banning the use of credit scores.  And Seattle banning the use of criminal records.  Others are calling for "sealing" eviction records.

When the government prevents private landlords from protecting their assets and forces losses onto them, a very predictable event occurs:  disinvestment.  The result is that housing opportunities and quality decrease.

The overall goal is good:  Create good, affordable, safe and fair housing.  But don't try to achieve this with bad policy.  Luckily, various trade organizations including local Realtors, are in favor of sensible laws that protect both the tenants and the providers of the housing stock.

From what I've seen in my market, turnkeys are poor investments.  I might even have stronger words for some - toxic investments and even scams.

Here's the recipe:  Take one newbie California investor* who can't find a cash flow property in their state.  Take a property in the midwest in a lower middle class, even declining neighborhood.  Buy it out of foreclosure, make repairs, put a tenant and then mark the price up.  What can go wrong?  Repairs and evictions.  High cost of turnovers for single family houses.  And probably an illiquid investment that might sell for less when you're ready to exit. 

That might be an expensive fix.  Try to get the current owner to chip in / repair.  Can it still be rented?  Yes, but the problem isn't going away.  This will be a long term capital expense

Do Both.

Start out slow, purchase one property.  Also continue to pay off student loans.   Good job on your savings and your ambitions.

PS - NYC real estate is both expensive and highly regulated.  Take your time, getting to know the rules and the market.  There are some cheaper areas outside of NYC that you might want to consider.