All Forum Posts by: Luka Jozic

Hi, I was wondering if anyone knows where to find property tax rates for various Toledo zip codes/neighborhoods? Similar to how The Ultimate Guide to Grading Cleveland Neighborhoods has listed out tax rates for each area, is there something similar for Toledo? Or just anywhere else I can find that information?

Thanks for all the responses. It does sound like it might not be worth it. I spoke to my PM though and they said the area (Newbury Heights) is kind of a hassle to deal with so I decided to pass on this opportunity. 

Quote from @James Wise:

Quote from @Luka Jozic:

Hi everyone,

I am looking for my second deal in Cleveland and looked at a duplex today that had a strange layout in the upstairs unit. Since I saw it over facetime I didn't get a picture or video of it so Im hoping I can explain what it was. So for the upstairs unit the door was at the back of the house separated from the downstairs unit. When you open the door, there is a staircase and at the top of the staircase there is like a little hallway area maybe (12x4 ft) with 3 doors. Note that there is no door at the top of the staircase to reach this little hallway area, the front door to the apartment is at the bottom of the stairs. The first door goes to the bathroom, second one to kitchen, third to living room. Technically the hallway is inside the apartment because the front door is at the bottom at the stairs, but it doesn't feel like it is. It feels like the hallway is still outside the apartment. This is obviously not an ideal setup and would be better if at the top of the stairs, there was a front door and then make that hallway to feel more like inside the apartment and not outside. I hope this makes sense.

If so, my question is simply is it worth converting it in such a way and how much could it possibly be? I know its hard without a picture but Im hoping I can get rough estimates just to know if its worth it. This would mean new flooring in the hallway and paint walls, ceiling, and doors (possibly removing the doors to kitchen and living room). It would also mean putting up a new wall that so that when you come up the stairs, you don't see into the hallway area. And then of course putting a new front door at the top of the stairs. Basically make the hallway be part of the inside of the apartment instead of the current awkward configuration. 

Another question is, would this require any type of permits, and if so how does that work in Cleveland and what does it cost?

 Draw a map/diagram of what you're trying to say.

Here is a diagram I hope this makes more sense. let me know if you have any other questions.

Hi everyone,

I am looking for my second deal in Cleveland and looked at a duplex today that had a strange layout in the upstairs unit. Since I saw it over facetime I didn't get a picture or video of it so Im hoping I can explain what it was. So for the upstairs unit the door was at the back of the house separated from the downstairs unit. When you open the door, there is a staircase and at the top of the staircase there is like a little hallway area maybe (12x4 ft) with 3 doors. Note that there is no door at the top of the staircase to reach this little hallway area, the front door to the apartment is at the bottom of the stairs. The first door goes to the bathroom, second one to kitchen, third to living room. Technically the hallway is inside the apartment because the front door is at the bottom at the stairs, but it doesn't feel like it is. It feels like the hallway is still outside the apartment. This is obviously not an ideal setup and would be better if at the top of the stairs, there was a front door and then make that hallway to feel more like inside the apartment and not outside. I hope this makes sense.

If so, my question is simply is it worth converting it in such a way and how much could it possibly be? I know its hard without a picture but Im hoping I can get rough estimates just to know if its worth it. This would mean new flooring in the hallway and paint walls, ceiling, and doors (possibly removing the doors to kitchen and living room). It would also mean putting up a new wall that so that when you come up the stairs, you don't see into the hallway area. And then of course putting a new front door at the top of the stairs. Basically make the hallway be part of the inside of the apartment instead of the current awkward configuration. 

Another question is, would this require any type of permits, and if so how does that work in Cleveland and what does it cost?

Quote from @Bob Stevens:

Quote from @Luka Jozic:

Quote from @Bob Stevens:

Quote from @Keivan Cross:

Looking for information regarding reassessment properties in Cudell and Old Brooklyn. Market value are extremely low on most properties which will result in a huge spike in property taxes. Can someone shed some light on this? For example,  property #1 is listed at $120k turnkey last sold in 2018 with a market value of $35,000. Will these type of properties most likely reassess at the listing price? 

The taxes will reflect the new price sold, NOTHING you can do about it, still only going to be about 2500, If I recall its 2.5% of value., So with $1300- 1400 in rent (assuming its a 3 br ) sill not a terrible deal. Find cash buyers, this can help resolve the issue, \

Good Luck 

 How does cash buyers resolve the issue?

 Its ALL about knowledge,, when buying a property that needs repairs well there is the PP plus repairs right,so...

Im not sure I follow. Are you saying if you buy a distressed property cash at a lower price, the tax will be assessed based on that purchase price and thus getting lower tax?

Quote from @Bob Stevens:

Quote from @Keivan Cross:

Looking for information regarding reassessment properties in Cudell and Old Brooklyn. Market value are extremely low on most properties which will result in a huge spike in property taxes. Can someone shed some light on this? For example,  property #1 is listed at $120k turnkey last sold in 2018 with a market value of $35,000. Will these type of properties most likely reassess at the listing price? 

The taxes will reflect the new price sold, NOTHING you can do about it, still only going to be about 2500, If I recall its 2.5% of value., So with $1300- 1400 in rent (assuming its a 3 br ) sill not a terrible deal. Find cash buyers, this can help resolve the issue, \

Good Luck 

 How does cash buyers resolve the issue?

Thanks everyone for the responses. I ended up going with simply cleaning up the cabinets and will repaint the countertop with one of those paint kits. I might consider updating the cabinets later on but I feel like they have a few more years to live. 

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Michael P.:

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Dave Poeppelmeier:

If you're looking to simply Buy and Hold, depending on what class of property you're looking at, yes you can find deals right now. If you're looking to BRRRR from out of town, it's difficult but not impossible. You might not be able to get 100% of your money out of properties, but you can get a good chunk. You really do need to bring cash for that right now, otherwise the lender closing costs for the purchase and refinance after is going really hurt your return.

If you do it "on your own" - looking for general contractors or trying to manage your trade-specific contractors (roofing, plumbing, electric, etc), you can get more bang for your buck. A big HOWEVER is that you need to know what you're doing with rehabs so you can keep tabs on the GC/contractors. The second that they know you're out of town or if they sense that you don't know what you're doing (or both), they're going to take you for a ride. It stinks, but that's the way it is. 

If you're still new, then you do need to rely on a Property Manager. With PMs, they manage the project for you, but you're going to pay for that service. But, if you're willing to put the capital in up front, you can find houses that are sitting there right now that need a full cosmetic reno for a lot less than you could last year. You drop $20-30k into it, refinance,  and now you have a solid long term property to hold onto that you know is set for a while. It just depends on how much "work" you want to put in as an investor. 

Very helpful post. What would a BRRRR in Toledo potentially look like number wise? Like example purchase price, rehab cost, ARV, and rent? Is it easier to make it work for SFH or MFH?

SFH brrrr I'm working on now is approximately:

75k purchase

35k reno

150k appraisal

1600 rent

Thanks for responding. But how do those numbers make sense for a BRRRR? If your appraisal is 150K and you leave 30% equity in the deal, your monthly payment should be just over $1000 a month. If rent is $1600, then 10% for PM, some percentage for cap-ex, vacancy and repairs (since its newly rehabbed maybe 15% for all that), that gives you barely $200 cash flow? Am I missing something here?

Not sure what you mean. ARV 150k i pull out 75% or 112.5k. That covers my entire purchase and rehab, so I have a cash flowing rental for "free", no money out of my pocket, isn't that how brrrr works? Then I can repeat the whole process.

I’m getting 11 cap I thought that was pretty good, but I’m open to suggestions

Hmm ok but I mean if you get an appraisal at 150K and you cash out refinance 70%, your mortgage and principal will be roughly $750 a month, your expenses are $600, that leaves you $250 a month in cash flow. Is it really worth all that work for $250 a month? This is where I struggle because for most deals I see, if I wanna pull all my money out, then the cash flow will suck, so it feels like I almost need to leave some money in the deal to get decent cash flow, which I would be ok with. 

 Well it’s a long game, not all based on year 1 pro forma. Part of that payment is principle pay down and each month the principle portion gets larger. Over the years rent will rise. Also if rates (ever) get lower again you can refinance to increase cashflow. Not to mention appreciation over the years. I enjoy it so don’t really feel like work to me, I literally do all of it from my cell phone.

Far enough that is very true. May I ask how big the property is and how many beds and path? Also which zip its in? 1600 sounds awfully high for Toledo. 

Quote from @Michael P.:

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Dave Poeppelmeier:

If you're looking to simply Buy and Hold, depending on what class of property you're looking at, yes you can find deals right now. If you're looking to BRRRR from out of town, it's difficult but not impossible. You might not be able to get 100% of your money out of properties, but you can get a good chunk. You really do need to bring cash for that right now, otherwise the lender closing costs for the purchase and refinance after is going really hurt your return.

If you do it "on your own" - looking for general contractors or trying to manage your trade-specific contractors (roofing, plumbing, electric, etc), you can get more bang for your buck. A big HOWEVER is that you need to know what you're doing with rehabs so you can keep tabs on the GC/contractors. The second that they know you're out of town or if they sense that you don't know what you're doing (or both), they're going to take you for a ride. It stinks, but that's the way it is. 

If you're still new, then you do need to rely on a Property Manager. With PMs, they manage the project for you, but you're going to pay for that service. But, if you're willing to put the capital in up front, you can find houses that are sitting there right now that need a full cosmetic reno for a lot less than you could last year. You drop $20-30k into it, refinance,  and now you have a solid long term property to hold onto that you know is set for a while. It just depends on how much "work" you want to put in as an investor. 

Very helpful post. What would a BRRRR in Toledo potentially look like number wise? Like example purchase price, rehab cost, ARV, and rent? Is it easier to make it work for SFH or MFH?

SFH brrrr I'm working on now is approximately:

75k purchase

35k reno

150k appraisal

1600 rent

Thanks for responding. But how do those numbers make sense for a BRRRR? If your appraisal is 150K and you leave 30% equity in the deal, your monthly payment should be just over $1000 a month. If rent is $1600, then 10% for PM, some percentage for cap-ex, vacancy and repairs (since its newly rehabbed maybe 15% for all that), that gives you barely $200 cash flow? Am I missing something here?

Not sure what you mean. ARV 150k i pull out 75% or 112.5k. That covers my entire purchase and rehab, so I have a cash flowing rental for "free", no money out of my pocket, isn't that how brrrr works? Then I can repeat the whole process.

I’m getting 11 cap I thought that was pretty good, but I’m open to suggestions

Hmm ok but I mean if you get an appraisal at 150K and you cash out refinance 70%, your mortgage and principal will be roughly $750 a month, your expenses are $600, that leaves you $250 a month in cash flow. Is it really worth all that work for $250 a month? This is where I struggle because for most deals I see, if I wanna pull all my money out, then the cash flow will suck, so it feels like I almost need to leave some money in the deal to get decent cash flow, which I would be ok with. 

Quote from @Michael P.:

Quote from @Luka Jozic:

Quote from @Dave Poeppelmeier:

If you're looking to simply Buy and Hold, depending on what class of property you're looking at, yes you can find deals right now. If you're looking to BRRRR from out of town, it's difficult but not impossible. You might not be able to get 100% of your money out of properties, but you can get a good chunk. You really do need to bring cash for that right now, otherwise the lender closing costs for the purchase and refinance after is going really hurt your return.

If you do it "on your own" - looking for general contractors or trying to manage your trade-specific contractors (roofing, plumbing, electric, etc), you can get more bang for your buck. A big HOWEVER is that you need to know what you're doing with rehabs so you can keep tabs on the GC/contractors. The second that they know you're out of town or if they sense that you don't know what you're doing (or both), they're going to take you for a ride. It stinks, but that's the way it is. 

If you're still new, then you do need to rely on a Property Manager. With PMs, they manage the project for you, but you're going to pay for that service. But, if you're willing to put the capital in up front, you can find houses that are sitting there right now that need a full cosmetic reno for a lot less than you could last year. You drop $20-30k into it, refinance,  and now you have a solid long term property to hold onto that you know is set for a while. It just depends on how much "work" you want to put in as an investor. 

Very helpful post. What would a BRRRR in Toledo potentially look like number wise? Like example purchase price, rehab cost, ARV, and rent? Is it easier to make it work for SFH or MFH?

SFH brrrr I'm working on now is approximately:

75k purchase

35k reno

150k appraisal

1600 rent

Thanks for responding. But how do those numbers make sense for a BRRRR? If your appraisal is 150K and you leave 30% equity in the deal, your monthly payment should be just over $1000 a month. If rent is $1600, then 10% for PM, some percentage for cap-ex, vacancy and repairs (since its newly rehabbed maybe 15% for all that), that gives you barely $200 cash flow? Am I missing something here?