Real Estate News & Commentary

The No. 1 Most Overlooked Real Estate Market (Are YOU Missing Out?!)

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A panoramic view of downtown Toledo Ohio's skyline from across the Maumee river at a popular local park. A beautiful blue sky with white clouds for a backdrop.

Let’s talk about the No. 1 market that no one is investing in and why they should.

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OK, guys. Shameless plug warning. I’m going to be a bit biased because I am based in this market. I’ve done a lot of deals in this market, and I feel like a kid in a candy store.

Now, the funny thing is when I started and told people that I’m going to start this great company in Toledo, Ohio, they all laughed me out of the room. They all thought, “What’s this crazy Australian guy doing, and why is he going to Toledo to do real estate?”

The No. 1 Most Overlooked Real Estate Market

Anyway, fast forward six years, and I’m proud to say that I’m kind of the last one laughing. I say that because what I found—what still is the case to this day—is that there’s a lot of individuals who prefer to stay away from tertiary markets. For the last four to six years, there really hasn’t been that much activity in Toledo. The hedge funds have not come into town; they prefer to go into other markets, where I guess they can pump up the projections from a statistical standpoint—things like population growth, employment growth, large employers being in town, and whatnot. So, Toledo has avoided the hedge funds.

Related: Investors: Don’t Compromise Your Numbers Just to Buy Deals in a Hot Market

Let me give you another example: It doesn’t really have that sex appeal in the name. Toledo, Ohio, it’s a pretty small hub and there’s a population of around 510,000 people including the outskirts. As soon as LeBron James went to Cleveland to play basketball, everyone’s in Cleveland. All the companies are there. All the turnkey operators, property management companies, and everyone else are posting online that they want to invest in Cleveland. So, I always like to joke around that every John and his dog went to Cleveland to start a real estate company.

Once again, we in Toledo avoided that competition, too. No one has really been in Toledo to do the things that we’re doing (along with some other companies) out there. Therefore, from that aspect, it has always really stayed under the radar, which you’ll find with a lot of tertiary markets.

Look, I don’t know of any other markets in the country where you can get a better bang for your buck.

map with red location markers

What you are buying in Toledo from a B-class standpoint? If you ignore all the talk online about properties $20-40K being “pig” properties, I can blow that out of the water. Anyone who comes to Toledo and goes through some of these neighborhoods with me, they can check out all the details. You will absolutely be mesmerized. It is unheard of.

In my opinion, whatever you’re buying and whichever price points, take the same amount of money and go somewhere else, and you are buying a C-class or D-class rough, high crime-area property. Here, you are buying a solid asset, in a solid area, where your tenants are blue collar working-class people who are hard pressed for money. As such, they tend to stay and pay their rent.

Some of those key pockets of infrastructure here in Toledo that I think are great are around ProMedica Toledo Hospital, which is the biggest and richest employer in town. They’re heavily gentrifying the area and anything around any ProMedica facility is always great to buy.

Downtown is booming, there are many hotels opening up and bars. This is an exciting time to be in Toledo. That’s at least what the locals tell me because I have not been here as long as they have.

The University of Toledo has 22,000 students and is growing. The city’s great for young families and student rentals. Then we’ve got the Jeep factory, GM Powertrain, and the Chrysler assembly plant—car manufacturers that stayed open during the global financial crisis. A lot of them went bust in Detroit; they didn’t go bust here.

Then we have the Washington Local School District, by far the most desirable school district in all of Toledo. There’s a lot of demand for properties for sale and rent in that area. A sweet spot that we like is the Five Points area. It’s not in the Washington Local School District, but it gets that overflow of great tenants because it’s right next door.

An interesting little fact about these areas is they used to be owner-occupied. But unfortunately a lot of these folks lost their home to foreclosure, so they had to move out. Regardless, they love the area, and the infrastructure supports a demand. They want to stay close to where they work, they want to send their kids to a good school, they want to be close to ProMedica who is gentrifying everything around it, so they decided to rent.

A lot of these people who used to own back in the day are now tenants, so there is a sense of pride and ownership in the community. The areas tend to be well-kept, and the homes are well-kept. It’s hard to find a vacant home, because the neighbors will upkeep the yards.

Related: 5 Reasons the Midwest is Hands Down the Best Place to Invest

I honestly think that Toledo is a hidden gem like no other. I’ve been here for six years now and don’t plan on going anywhere. There has been more talk of people starting to invest in the market. I’m seeing that happen, but it’s still a long way from some of the other markets.

Another thing to keep in mind if you are looking to invest in Toledo is I think it’s strictly a cash flow play. I don’t think you’re going to get any appreciation. If you do, it’s just a cherry on top. Historical trends show about 2 to 3 percent, which is just keeping up with inflation. As much as things are booming here, per se, the market has absolutely nothing compared to some of the others like Florida, Atlanta, and Texas—I mean those markets truly are booming. So it’s pretty flat here when it comes to that. However, once again, I really don’t know of any other market where you can get a better bang for your buck.

That’s me, that’s Toledo, that’s Ohio. I’m biased, and I know it. I would love to hear from you!

Would you choose to invest in a market like Toledo? Why or why not? 

Let’s chat in the comment section!

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.

    Christopher Smith Investor from brentwood, california
    Replied 4 months ago
    Toldeo, isn't that where Corporal Klinger from MASH was from?
    Christopher Smith Investor from brentwood, california
    Replied 4 months ago
    A tushiary market, sounds like it has real potential.
    Kevin M Strong from Lake Tapps, WA
    Replied 4 months ago
    There is a lot of truth to what he is saying. I lived in Cleveland, Ohio for 40 years.
    Sarah Kartsher
    Replied 4 months ago
    I have the same thoughts about a small town in Ohio called Mansfield. Properties in the $50k - $80k range with rents $900 - $1200 a month.
    Ken Seemann from Hernando, Mississippi
    Replied 4 months ago
    Wow. Weird to read about the area I grew up in. I wouldn't have imagined all that about Toledo. And Christopher Smith, yes, Toledo is not only where Klinger was from, it is the place his alter ego Jamie Farr is from. And the hot dog place he always talked about on M*A*S*H, Tony Packos, is a real place as well.
    Jing Shi
    Replied 4 months ago
    Hi Engelo, Any real estate agent and PM you recommend?
    Sharee Hurts from Phoenix, AZ
    Replied 4 months ago
    Engelo, Thanks for that comprehensive overview! Would you recommend Toledo for a new investor who’s out of state?
    Tauheedah Rashid Rental Property Investor
    Replied 4 months ago
    Would love to hear the response to this as well. What is the path you recommend for out of state investors?
    Jason Halka Rental Property Investor
    Replied 4 months ago
    I live 8 min from downtown Toledo. It definitely has the potential to be someone’s real life game of monopoly. There is a ton of potential in BRRRR. An investor would need to be leery of the crime (realtor.com has a crime overlay). A lot of the property will have decent cash flow. The question is can you get high quality tenants in a low SES area? And will a nicer house/multi family destroyed by crime? There are houses you can buy for $2k. Foreclosures for $200. Reminds me of the downtown Detroit market.
    Tim Schroeder Rental Property Investor from Castle Rock, CO
    Replied 4 months ago
    Not sure what to think about the raving positive comment two above mine, written by someone whose account is now CLOSED. Doesn't fill me with comfort. LOL
    Na Rod Investor from Yuma, Arizona
    Replied 4 months ago
    Yup, same here. Pretty annoying actually.
    Joseph Copeland Rental Property Investor from Freeport, FL
    Replied 4 months ago
    LOL
    Ray J. from Gary, IN
    Replied 4 months ago
    Same thing I was thinking. Hahaha
    Maksim Bikmurzin
    Replied 4 months ago
    I'm new in real estate investment. But experienced enough in fishing and hunting. This article looks like successful fisherman sharing the best place for fishing. Moreover, he posted announcements and hung billboards for everybody to come to his lovely hidden spot. Did you ever see that? I didn't.
    Anna Alfano Financial Advisor
    Replied 4 months ago
    You'd think it works the same way in the real estate investing, but when you are a seasoned investor like him - with a legitimate diversified business, recognazied by communities, with other sources of revenue from other channels and in other markets - sharing one small area of potential investment opportunity doesn't take away from him whatsoever. Moreover, he is probably looking to make Toledo mini Cleveland by incentivizing investors to bring money to the area. The moral of the story- at his level, he can share really good insights without loosing the momentum as he's already invested in it, now it's your choice to research more and analyze or pass on it.
    Joshua Feit from Atlanta, GA
    Replied 4 months ago
    The OP seems to be a turnkey operator in Toledo. He wants people to get interested in his 'secret spot' so they will come to him, buy a turnkey property that his company rehabbed, and have them operate it. His goal is to get other people excited about his market!
    Billy Swanzer
    Replied 4 months ago
    Thanks so much for sharing this. I live about an hour and 20 minutes east of Toledo in Amherst, Ohio. I graduated from the University of Toledo back in 2008, but now I’m a full time Realtor here in Amherst. I very much want to transition more into the investment side of real estate but like you said, Cleveland’s competition is pretty high, and that’s where I have been looking since it’s only about 25 minutes away. If you ever have any time, I would love to talk with you and maybe get some advice on how to get my foot in the door. The sky is the limit and I’m ready to work hard. Feel free to contact me. That would be awesome. My email is [email protected]
    Bob M. Rental Property Investor from Saint Louis, MO
    Replied 4 months ago
    How is this advertisement a headlining featured article on BP? I’m all for subtly promoting your business on BP, I know that’s what these articles arereally about..,but you have to provide some education too. Cmon BP.
    Dawn Matze Contractor from Carlsbad, CA
    Replied 4 months ago
    Loved your thoughts. How can I learn more about investments in Toledo? Dawn
    Kevin Miller
    Replied 4 months ago
    That’s awesome, you’re crushing it! I’m heading home to Cali from Detroit now with several offers out in D town. You had me excited until flat appreciation, yikes! Although, maybe a diversification play for my 800k, 1031 acct. Appreciation we’ve been getting in San Diego last few years... I may be calling to do some deals! How’s multi looking?
    Marc Troslen from Pasadena, California
    Replied 4 months ago
    Engelo, to me this is a rare BP article of information I am seeking. Most of the articles don't strike my fancy. How about buy and hold properties without BBBBR or buy and rehab? Is there any actions in good neighborhoods that can be bought with minimal rehab? How are the taxes? Nice Job on the article.
    Arnab Sinha
    Replied 4 months ago
    I am not sold on this market. The population has been steadily declining, 200 jobs added last year (0.06%), the median household income has grown 8% in 17 years, median household value has increased 7% in 16 years.
    Brent Crosby Rental Property Investor from Farmington, UT
    Replied 4 months ago
    Hate to rain on anyone’s parade, but Toledo has a SHRINKING population!!! If you want to invest long term you really need a growing population otherwise your looking at vacancy issues in the future. Never forget the three rules: location, location, location! If more people are moving out than in that tells you what you need to know about the location. Also, many of the comments appear to be artificial. This reads like an add to me using the ‘secret knowledge’ pitch. Of course the big secret is that property is cheap in a city that’s slowly dying. The cash flow miracles promised will eventually dry up if the shrinking population trend continues.
    Vaughn K. from Seattle, WA
    Replied 4 months ago
    Technically, you don't need a growing population... But flat is nice. If a population is declining very slowly, that might be OKAY as well, provided cash flow is super strong. Sharp declines are no good though. Think about it this way: If for every 10 houses that need to get a major rehab every 20-30 years or whatever, 2 are essentially just demoed, and 8 actually get fixed up... As long as 2 households left the city, you're still essentially at "even" on supply and demand. Basically letting the natural cycle of housing degradation take its course. So it's not really that big a deal provided it is slow, and not rapid. There isn't a lot of capital being wasted or lost in such a situation. Now if there were 10 people leaving for every 10 houses that were coming up on their "needing to be rehabbed" stage, then that would essentially mean every house in the city should be left to rot/be removed, which was like Detroit for a couple decades. But the decline in Toledo isn't THAT steep as best as I can tell. It was at one point, as with many midwestern industrial powerhouses after we subbed out all our manufacturing for slave labor wages abroad... But virtually none of those places are shrinking that fast anymore, and many have in fact rounded the corner and are now growing. And finally, one thing to note, is even with many of the midwest cities that showed declines IN THE CITY... Their metro areas actually never declined at all in most cases, they continued to grow the entire time. People just said screw living in the city with their high taxes, crime, government incompetence, etc and moved to the better in every way suburbs. In many areas that show growing CITY populations, their metro area populations aren't climbing much, it's just that people are moving back to the city proper. So it's a lot more complicated than JUST looking at wikipedia and seeing the CITY population went down a couple percent over the last decade. I haven't done the research on Toledo, but I have on other cities, and all the above is relevant stuff to consider.
    Janie Potts Financial Advisor from Athens, GA
    Replied 4 months ago
    Interesting article! I was born & raised in Findlay, Ohio but haven't lived there in 25 years. I had no idea Toledo area was doing so well. Glad to hear it though.
    Jeffrey Bower
    Replied 4 months ago
    I often hear that areas in the midwest and south are good places for investment.
    Taylor Knott from Blue Lake, CA
    Replied 4 months ago
    Wow that is truly crazy. I'm new looking to buy my first property this year. I've been looking and duplexes and 3-1 SFH run $250-$258K average rent being $1000/month $1200 on the higher end. Rent doesn't even cover P and I. Quite odd to see such high valued homes in a low income county that rent for nothing. Cool to see better markets. Thinking out of state or deed auctions.
    John Elliott Investor from Oakland, CA
    Replied 4 months ago
    Sounds like somebody wants to offload their class D/F properties they bought in a city with top 10 crime in the country, hit hard by opiate epidemic , section-8 tenants that will tear the sinks out when they move and leave roach nests for you to clean up and the housing authorities won’t bat an eye. No thanks I think I’ll invest in legitimate economies with room to grow, i,e Texas, Georgia , Florida.
    Dan Rowley Rental Property Investor from Lafayette, CA
    Replied 4 months ago
    If (theoretical) on paper high cash flow is the objective, then maybe this metro will look like a great deal. However, be wary of Toledo (or Detroit or Dayton or Cleveland) or many other of the rust-belt cities that have shrinking and aging populations + urban blight. Do your own homework and look at the demographic data for the city and the specific neighborhood before you act. For me = I'd much prefer modest cash flow in fast growing cities and good neighborhoods where occupancy is high... just my 2 cents.
    Matt NA Investor
    Replied 4 months ago
    Toledo MudHens!