All Forum Posts by: Bob Collett

@Joel Fine as you know, all city of Cleveland rental properties are slated to be inspected annually and subject to violations. They hired 33 new inspectors last year for this purpise. 

@Marc Winter in addition, we do have some communities charging an extra $100 or $150 in addition to the normal rental registration fee, if the owner lives outside of the county.

@Gwen Fyfe i appreciate you concern. However, so many of these houses are supplied by lead supply lines in street and infrastructure. This would be on the city water department, yet they focus on rental property owners. Why should this burden to deal with lead fall upon the current inventor who may have only owned the house for a year? I am curious to know if you own any older homes in Cleveland. Would you personally be ok with a $20,000 lead mediation bill on a property worth $40,000?

Hi All

A few weeks ago, the owner of a property I manage received a "ticket" from the city of Cleveland because the tenant did not properly place the trash basket out in front of the house.  The city sent a "ticket" for $100.  The owner was quite upset, insisting on knowing who was going to pay the ticket.  The tenants had already moved out, so my first thought was to tell the owner that of course, the owner would have to pay the ticket.  Since this was not a sophisticated owner, I decided to simply pay the ticket out of my own pocket rather that go round and round.

Now today, I get a "complaint and Affidvit" from the city of Garfield Heights.  The city issued a ticket for $150 for failure to bring the empty trash bin back in, within 12 hours.  I called the city of Garfield Heights, and they told me that the fine is waiverable by paying $180.  Upon further investigation, the city advised me that there have been three similar complaints on three separate occasions, resulting in three separate fines of $180 each.  Understand that the violation is failure to bring an empty trash bin in from the tree lawn within 12 hours.

I spoke with our Councilman at Garfield Heights and he explained that they are not allowed to issue a citation to the resident, so they go after the owner for housing violations which is criminal court.

On another subject, the city of Cleveland is on the verge of passing an ordinance that would pass the burden of proof to the owner, to prove that their house is lead free.  So first, you would be required to hire a lead specialist to test and certify... then if they find lead, your would be required to hire a certified lead mitigation specialist to remove all the lead.  

My point here is simply to let investors know that there is more to investing in Cleveland area real estate than meets the eye.

Ask your real estate agent to search bank owned and HUD owned houses.

Mark

I have done a few. One was a 400k property which i sold as the realtor for about $220k as short sale. I am working one right now in Garfield Heights. 

During the height of the mortgage housing crisis, banks really did not have systems in place to deal with short sales and were making it up as they went alone; often pulling the carpet out from under the seller at the last minute.

They are a lot of work; the seller has to be willing to cooperate by providing info and follow instructions, the buyer needs to be patient and have cash, and the realtor needs to have experience.

I would be happy to take a few questions.

Bob

Where is the house? Zip code.

Is there a question?

@Cal C. - The Seller generally pays the sales commission.  The amount of that commission is always a negotiation between the seller and his agent.  You as a Buyer is never a party to that negotiation.  Even if the Agent dropped the commission to 3%, that savings would go 100% to the seller.  You are not a party to the commission paid by the seller to the Agent. 

As others on this post have advised, it is best for a Buyer to focus on matter's of importance to the Buyer... essential price and financing, days to close, repairs, etc.

On a rare, rare occasion, I might offer to drop my commission to make a deal happen.  I recall once time dropping my commission to zero to help everybody out.  But again, the Buyer had nothing to do with that decision.  My client (the seller) needed a break, and I was in a position to give him one.

An agent can legally and by definition, only represent one party to a transaction.  Virtually all of the BP comments here have agreed in unison that the Seller's agent (based upon the facts as reported by you) acted ethically, properly, and i the best interest of his client (the Seller)

The lesson here for you Cal, is that next time, you should probably work with a Buyer's Agent to represent your best interest.  Too many times, investors think that by contacting the listing agent directly, they can save the commission for themselves.  This is misguided thinking.  Once again, if there is no commission, that does not mean that the Buyer should get a better deal.  It may seem that way to you, but that is not the real world.

When a Seller goes "By Owner", He or She is not doing it so they can split the commission savings with the Buyer.  They are doing it to put the commission savings in their own pocket.

Cal, best of luck going forward.

Bob Collett

@Emily Baratta - I was just getting ready to write a post on Cleveland Rentals and mandatory inspections, and I saw your post.  I decided this would be a good place to drop my post.

First... there are no "mandatory inspections" in the City of Cleveland... sort of.  There is however a requirement to register all rental properties. The registration will eventually trigger an inspection. Over the past year or so, the city of Cleveland hired 35 new inspectors just to do rental property inspections. Some inspections have industry background... but some I have had, are sort of like 30 day wonders, seemingly having taken a crash course on rental inspections. I literally had one inspector just walk around the property and name property components... "ok, this is the hot water tank... these are glass block windows... here is the breaker panel... it was crazy. 

I have also noticed that certain inspectors have their hot items.  One inspector, loves tuck pointing. He crawls behind the bushes and always finds something that needs tuck pointing.

In general, inspections are a good thing that can help to protect the housing stock.  But the problem in my opinion, is that the motivation seems to be political. In my opinion, nobody in government (or anywhere else) is smart enough to anticipate the unforeseen consequences of there "mandates"

So here is what is going on now.

A new proposed ordinance will is going to

• Put the burden of certifying that rental properties are "lead-safe"
• Double the cost of the annual rental registration from $35 per unit to $70 per unit
• Require landlords to put the lead status of the property into a searchable data base.
• All tenants to terminate leases and/or suspend some or all rent payments if the property has lead hazards.
• Fines for landlords who do not show their property to be lead-safe.

According to today's Plain Dealer article; the city has inspected 10,000 properties in 2018; and found 10% to have lead violations. The city of Cleveland has an estimated 92,000 rental properties.

The city already does what they call voluntary inspection of rental homes that are registered... but I have never been given the chance to say no thank you... I am not volunteering. The city is also currently doing random lead dust tests.

All this said, I would still prefer a rental property on the west side of Cleveland (44141, 44135, 44144, 44109 and 44102) than most of the inner ring east side suburbs. JUST BE ABSOLUTELY CERTAIN, NOT TO BUY ANY PROPERTY IN CLEVELAND PROPER WITHOUT GETTING A PROFESSIONAL LEAD INSPECTION FROM A CERTIFIED INSPECTOR. The lead-safe certification is proposed to be good for 20 years.

Charlene

$300 monthly return on $80k is about 4% ROI. Does that include debt service or are you a cash buyer?

Bob