All Forum Posts by: Jack Smith

Hey James, that's a big purchase for your first one!  I have concerns about the rent though - $2600 is a miniumum total for both units you have to get, and even then it's a bit skinny for capex, etc.., definately negates any possible house hack.  That said, you may be in a situation where you have to contribute at times, and that's not necessarly a terrible thing as long as you're in it for the long haul.  Over time, rents will increase and with a future refi at a lower rate will help get your costs down.  

Before you do anything else, please get involved with Stark County Real Estate Investors Association (SCREIA.org).  There you can network with other LLs, investors, and even property managers.  Getting involved years ago after my first purchase was the best (and cheaper) investment in myself I ever made.  I would encourage you to read up asap as much as you can on property management (Mike Butler, Brandon Turner, etc... ) before you even consider advertising for tenants.  Check in with Tanya Burleson of Farmers in New Philly for your insurance, she understands rental properties very well.  Get some fair housing training, too!   

@Stephen Meyer - I've got a number of SFRs within walking distance to Aultman.  DM me if you want to learn more about them.  

Quote from @Sarita Upadhyay:

Does anyone have thoughts about the area west of 77 just north of Tuscarawaras St? I'm considering a property in that area. Someone told me to avoid south of 25th St, but not sure if that's only east of 77.

Hi Sarita, 
Yes - the further north and west you can go, the better it gets.  North of 25th gets into Plain Twp, and west of Whipple starts Perry Twp.  You will get away from income taxes and annual registration fees by going to the townships, but your property taxes skyrocket which may offset some of the rent increases.
Back to your question - Harter Heights area is very solid.  I’m in the area around the Fair Grounds and Westbrook Park, great rentals!  In fact I have one listed for sale in that area right now.  Appreciation is occurring and I suspect will continue as the market strengthens.  
Make sure you are using the estimated taxes shown at the Stark auditors site to check on them for next year as there are some significant increases coming!  
If the numbers look good- go for it!  

Quote from @Natalie Voronkova:

Quote from @Nathan Harden:

Quote from @Jack Smith:

Quote from @Nathan Harden:

Quote from @Jack Smith:

For what it's worth... Akron is a very blue city and are not very landlord friendly - source of income protections, etc... Canton is not quite as bad, although they have increased annual fees and initial inspection requirements in the past few years that Akron never put in place.  Evictions are very easy in Canton but can be trickier in Akron, especially over the past year.  Being a part of the local REIAs in both towns can help you understand more of what is going on.  

Look up InvestinStark.com & ACREIA.org for more information!  

Will do, appreciate the response!
do you guys post off market deals on there/is there a better place to find be off market deals in Canton rather than Craigslist or marketplace?

It takes time to build relationships with local wholesalers & tired LLs, where ever you are looking to buy.  

 That fair. I believe that I have talked to you in the past. Since you and I both use Icon for PM. Who do you ask/have walk the off market properties for you?

I am out of state and the only way that I feel that I can get people to walk through the properties are if I find them on market and have Shawna write up the offers.

 I'm glad you are having a good experience with Shawna. I have not, I stated dealing with her manager who I do like. Still open to any PM recommendations if anyone has any.

Hi Natalie, I was only using Icon for leasing purposes after they started up, but for the last few years I've been leasing and managing my own properties. There's been many new PMs around here that have popped up over the last few years. I really only hear mixed reviews, but can't say one way or another personally. Short of coming here and meeting face to face with them and come to a couple local REIA events to discuss, for those who are remote I would suggest getting into some of the NE Ohio REIA facebook groups to get some advice from locals.

Quote from @Jordi Matsumoto:

Thanks, Jack. Insightful! I grew up in North Canton, so am familiar with the area. However, I never got to know much about Canton itself. Are there any employers driving jobs creation downtown? When you say the suburbs, are you referring to Jackson, Plain, North Canton, etc?

Ah, Ok, you have an idea of what we're talking about then.  North Canton is a mess right now, they outsourced their building department and went way off the deep end with controls and penalties.  Apparently they're still looking to recover revenues lost from the Hoover Company.  Alliance is making rumblings of more rental controls coming.  Your best bet are still the Townships - they have the best schools in the county with the least restrictions.  Employment wise, Aultman Hospital is consuming the SW part of Canton and Timken Steel keeps plugging along with some smaller manufacturing companies staying steady, but outside of Aultman I haven't seen any significant job growth or companies moving here, and if they do, they usually aren't coming into the City.  

Quote from @Jordi Matsumoto:

Any opinions on downtown Canton these days? Any gentrification and/or pockets of improvement? 

Hi Jordi, 

The conditions of city neighborhoods have not changed much from opinions previously stated on this thread by my fellow local investors. I don't believe that will change as long as the school system and public safety levels remain some of the worst in the state. Not seeing any real gentrification because of that, IMO.

On the positive side, we do finally have a new Mayor that is actually from the City, but so far he seems to be playing the same games as his predecessors. There’s a huge and badly needed street project coming over the next few years on the main drag in the near west part of town - W. Tusc St - which may actually be the start of something. We have had a pleasant and unexpected surprise of some appreciation over the past ten years in addition to rent increases to over $1k for good SFHs. It still is very possible to find properties that meet the 1% rule without much difficulty; but it’s also tougher now to find a mortgage for anything valued under $100k – regardless of condition or P&L.

To me, the shenanigans Code Enforcement continues to play on a new owner after a sale plus the recent increase on the annual rental registration fee really discourages buying more in the City. This is especially distressing for those of us that used to specifically buy distressed/vacants to rehab and hold. I'm starting to liquidate my city houses in favor of the suburbs.  

Quote from @Su Pak:

NO Pre-Payment Penalty (not allowed in Ohio)

Please explain this... I have more than one loan on my Ohio properties with prepayment penalties... ??  

Quote from @Amanda Gauthier:

Who do you use for PM for your properties?

Quote from @Jack Smith:
Theft is going to happen in this business, at least here and there.  No PM can stop something like what happened to you.  
I've personally known Steve Yoak for a number of years and both he & Kip have reputations as stand-up guys.  That said, they've gone through some huge growth over the last couple years and maybe they're having some growing pains?  Try to work through it with your PM or maybe request a different one?  Pickings are slim around here for good ones, and what makes a good PM for one LL isn't the same criteria as for another.  Just make sure the grass doesn't just look greener before jumping.  
If you need any local boots on the ground, let me know and I can assist, I'm in Akron daily.   

Hi Amanda, I self manage my properties in Akron, Canton, & Massillon.  I also help out of town LLs with consulting services to stay on top of their properties here.  I grew up learning maintenance on properties my parents and grandparents had in Akron, then started buying my own after college.  35 years later, been full time for the last five years or so.  I tried a few different PMs when I was employed but was never happy with any of them; knew I couldn't do any worse... But this business is not for the faint of heart!   

Hi Penny, Congrats for taking the next step!  

I would suggest getting going here for a membership to the Stark County Real Estate Investors Association to start networking at many events throughout the month with local & like minded investors, contractors, realtors, lenders, etc... SCREIA.Org  Even though we are in the neighboring county, we have members in our group from the Wooster area.  We are part of the state association - OREIA.com, which will connect you with many things going on across the state.  There was some mention some investors on starting a Wooster association during the pandemic, but I've not heard anything lately about it.  Great luck and hope to see you at some of our events!  

Quote from @Jeff G.:

@Jack Smith, can you be more specific on the lead laws and income source protection issues?

I don't mind source of income protections, I don't actually care how tenants make rent as long as they do and it's more or less on time. What sort of problems have you run into with assistance programs? The worst I've had to deal with is payment delay the first month a tenant joins an assistance program. It's annoying, but it's not terrible. Generally speaking my tenants communicate so it's not usually a surprise either.

I do network with locals for local advice, which is why I'm genuinely curious about the lead issue and your experience with renter assistance programs causing problems. What's the backstory here?

Check with James Wise's site for his Cleveland LBP requirements summary, it's much more useful than what I can offer as I'm not in the Cleveland market. But our state association - Ohio REIA watches the local cities very closely on these topics so I see the updates. Toledo's regulations are actually much worse, with a number of investors from Toledo PIN suing the city over it.

Income source protection is a reality that continues to spread and I don't care fight windmills; much like the support animal nonsense.  It actually hasn't been an issue with my properties as the only S8 applicants I've received don't qualify anyways.  I really don't have an issue with the concept but I don't like being told I have to deal with the monstrously ineffective and arrogant bureaucracy that AMHA is.  Other area PHAs are much easier to deal with.  

The sum of my gripes are over how difficult some of these cities make it to invest in.  We are the ones coming in and returning dilapidated & distressed houses, some that have been vacant and sources of problems with drugs and squatters for many years, back into functioning homes to communities that desperately needs affordable housing... where we are actually resented by the cities, placing one barrier after the next in front of you... Annual registrations, point of sale inspections, turning a blind eye to the most awful owner occupied housing while being overly strict to investment properties, courts that continue to drag out the eviction process; excruciatingly slow, laborious, and expensive permit processes; evictions that continue to be granted one extension after the next... these are the difficulties you run into in those cities.  And I fully get it that other areas may be much worse than we have.  But when you deal with communities that are more LL friendly, it's like night and day to do business.  They want us there to improve their community, and it shows.