All Forum Posts by: Ed W.

@Ben Layman @Tim Herman

Tim Herman is correct just on the general principle; i.e., those taxes that you are using are way too low. I've been an investor in Columbus Metro over 30 years (hundreds of properties all over the area) and taxes in the county tend to be about 2.1% - 2.5% per year based on ARV in most areas. The taxes vary due to school and other levies that pass or fail in the various areas. Yes, I know, the county does not use my formula but as a quick, down and dirty, rough approximation it will get you much closer to the truth than you are using. It sometimes takes a few years for the county to make the adjustments from what the taxes were at the time of purchase but, bad luck, our triennial reassessment is coming shortly. I see at least $3900 - $4200 in your future. (Note, the Hilltop has changed pretty dramatically over the past 5 or 6 years so if my estimate is off, then I'm underestimating, but I'd still bet $50 I'm pretty close and a whole lot closer than the number you are using.)

Near Grove City, OH, a seller gave me $500 to take her property.  On Fifth Ave, in Columbus, OH - I honestly don't quite recall but I either bought it for $200 and sold it for $500 or bought it for $500 and sold it for $800.

@Qasim Naeem  You've certainly earned my respect (not that you need it) for being so frank about your errors.  One of the most important lessons here for you and for others is that this is a very unforgiving business. The costs of mistakes often have thousands of dollars associated with them and you cannot rely upon anyone but yourself to determine value (and how condition, location, and other factors can affect that value). It is a mistake to rely upon real estate agents for this.  Even the most honest can make mistakes and, unfortunately, my experience is that most don't have the knowledge to make the determinations that an inspector, for example, would have and, at least some of them will care a lot more about the commission and what happens to you after the sale.  I had an agent tell me one time that house identical to all the other houses on the street was worth what all of the others were worth (about $200k) but I was certain it was worth about $40 - $50k less.  Time proved me to be correct.  If you can't afford to fly to protect your potential investment, I strongly urge you to not purchase.

@Garreton Smith

@Steven Foster Wilson gave you some sound ideas and one of them is along the same track that I thought while reading your post.  I differ with Mr. Wilson in that I believe having partners creates a host of problems I don't want to deal with, primarily that if they do something bad or wrong or illegal - you, most often, end up paying for their sins, not to mention business philosophy differences you may well encounter and the heated arguments - and worse (court battles, etc.) that follow.

You can avoid most of the problems by getting a "partner" (in the sense of someone to financially help you with the problem) to give you a loan that not only has the normal interest benefit (the interest rate should be above market because of the serious problem and as an indictment) but also the benefit of part of the profit of the transaction (25%, 50%, ????).  The loan confers no ownership (and, therefore, no partnership UNLESS NY law by statute or court precedent deems it so) and thereby lessens your liability.  You DEFINITELY need a competent attorney who deals with commercial issues of this type - not just any attorney.  You can also get a regular partner and pray - it is easier than what I've suggested - but I'm not much into prayer when it comes to business.  I work very hard to avoid problems by putting the correct structures and docs and precautions in place upfront.

What follows is speculation from a non-attorney.  Common sense would suggest that if they were too busy to do the work, they should return the fee.  Assuming you are being accurate and left no pertinent details out of your account, the fact that they kept your money, did not do the work and, in essence, placed you in a position of getting a judgment against you might rise to the level of malpractice something they could be sanctioned for and for which they may have insurance coverage for.  I strongly urge you to discuss the matter with one or more organizations that can hold attorneys to account.  I'm not sure which of these is the right one for this but if you call one they can direct you to the correct one.  Ohio Bar Association, Columbus Bar Association, Ohio Supreme Court (Office of Disciplinary Counsel).  I'd personally call the last on the list first but, again, that is with me having no special knowledge in this area.

"Goal: Under 500 crimes in the previous year."

@Jorge Abreu Thank you for an approach that is very helpful but I'm struggling with the quote above.  How are you defining crimes?  Why doesn't the population of a city factor into the equation?  Should a city/metro area of 1,000,000 be judged with the same number as a city or metro area with 3,000,000?

@Adam Feick

Would you please also share the other Columbus area meetups and how to find them?

Thank you.

You don't specifically detail your real estate experience and I am a strong advocate of self-management when at all possible (rental experience, good legal guidance, a good understanding of tenant psychology - at a minimum) but you couldn't pay me to have a rental in New York.  The laws so strongly favor tenants that I frankly couldn't put up with landlording there.  Though I have managed a rental in Bayonne, it's been long enough ago that I don't recall how lopsided -if at all -the landlord-tenant laws are in NJ and, of course, they could be worse today than they were then.  

If you are willing to do the hard work of truly vetting a rental manager, you may be better off in the midwest somewhere unless NJ laws are not strongly biased towards tenants and the numbers work. 

Your possibility of making a profit under these circumstances (distance, limited budget, lack of knowledge, lack of experience, reliance upon people you do not know and will not be able to trust) is no more than 5% at best, and likely closer to 1%.  Stated differently, your chance of losing money on this is 95% or higher because you are relying upon pure dumb luck to make your profit.  

I've not heard of ADU's in Columbus or, for that matter, Ohio. That doesn't mean they don't exist but those that do exist are most likely illegal, at least in most (if not all) Central Ohio counties (and probably the entire state). The counties I am most familiar with, Franklin (Columbus) and those counties that surround Franklin, have zoning laws and land use codes and, if the property is in a subdivision, many of those have restrictions as well.

Find some Columbus SF addresses on Zillow and look them up on the Franklin County Auditor website.  Those that have 510 as the land use code can only have 1 unit on the parcel.  If you ignore the restriction, you have to make the conversion without permits which is dangerous in terms of health and safety and in terms of your financial health - the city can force you to remove the improvements and, in one case I am familiar with, to tear down the entire illegal structure.  Also, if you let any person sleep in that illegal setup, if someone is injured or killed within it, it is almost certain your insurance will deny the claim.  All in all, I can think of no good reason to try this, though I run across similar at least several times a year.

Though I have great confidence in what I wrote above, it is not necessary to rely on my experience or my self-perceived knowledge. Call a couple of the code enforcement offices in the area and let them tell you what is and is not legal. Not being truly familiar with the concept of ADU's, there is a very small chance that I may be giving you a bum steer.