James Wise and BiggerPockets Redlining?!?!?!

https://www.citylab.com/equity/2018/11/redlining-cleveland-investors-home-prices/574153/

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Anthony Gayden:

I saw this article while browsing the web today.

The blog, posted on the real-estate investment platform BiggerPockets, shows how Wise grades real estate for investors, grouping Cleveland’s neighborhoods into four color-coded categories: “A Neighborhoods,”shaded dark green; “B Neighborhoods”shaded light green; “C Neighborhoods,” shaded yellow; and “D/F Neighborhoods” shaded red.

Wise’s maps ring eerily similar to redlining maps, the color-grading system used by the Home Owners Loan Corporation (HOLC), the National Association of Real Estate Boards, and the Federal Housing Administration (FHA) in the early-to-mid 20th century to demarcate which neighborhoods were worthy of property investment. Redlining was technically outlawed by the 1968 Fair Housing Act because it facilitated racial and economic segregation in many U.S. cities, segregation that persists.

Thanks for posting this Anthony. I spoke to that reporter a week or two ago & was wondering what type of nonsense he'd post when he published his article. I checked google a few times but didn't see it until I got a BP keyword alert. It was clear from the beginning of the call that he was an extremist & was hell bent on painting me as a racist despite facts to the contrary. The guy has no knowledge of the Real Estate Industry, he couldn't comprehend that the income of a tenant base had a direct effect on the risk of the investment.

21 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

7y

interesting article. thanks for posting.

1 Reply

Dave DeMarco

Rental Property Investor · Pittsboro, NC · Member since 2016 · 97 posts · 85 votes

7y

Wow James, congrats on single-handedly re-segregating Cleveland! You evil bastard! :)

It is VERY interesting and really no surprise at all that his map matches so closely. James you cannot let this stand (IMO). Any plan to defend yourself against this demonization or are you going to let it go?

5 Reply

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Dave DeMarco:

Wow James, congrats on single-handedly re-segregating Cleveland! You evil bastard! :)

It is VERY interesting and really no surprise at all that his map matches so closely. James you cannot let this stand (IMO). Any plan to defend yourself against this demonization or are you going to let it go?

Haven't decided. It'd be tough to have a conversation with those that agree with an article from a guy like that. It's clear that the purpose of The Ultimate Guide to Grading Cleveland Neighborhoods is completely lost on him. I don't think he'd understand enough about the topic to even engage in a productive discussion. It'd be much like trying to teach your dog algebra. Just wouldn't make sense.

6 Reply

Dave DeMarco

Rental Property Investor · Pittsboro, NC · Member since 2016 · 97 posts · 85 votes

7y

I understand the dilemma James. I would be (just me) formulating a "worst-case" plan if I were you. In the current climate, plus the power of the internet, these things can get out of hand quickly regardless of the fact that this is not your intent or doing.

3 Reply

James Galla

Attorney · Akron, OH · Member since 2016 · 535 posts · 389 votes

7y

I'm very familiar with redlining. It's not Jame's fault that bank in the day, the banks created an inherently economically-lower tier of properties. Unfortunately, the after-effects of redlining are alive and well and impact many investors today, but that is something we all have to live with when assessing the viability of an investment property. Ultimately, I feel that if enough flippers get in the picture, the market value and investment stability of the redlined neighborhoods can eventually normalize.

4 Reply

Account Closed

Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes

7y

Unfortunately its not just redlining but could fall under "disparate impact" an unintentional discrimination .Once Hud gets involved even though no fault, fines and legal expenses could be significant if complaints are made.

Joel Fine

Rental Property Investor · Leander, TX · Member since 2018 · 183 posts · 264 votes

7y

Pointing out uncomfortable facts makes some people scream "racist." I hope you do defend yourself from this BS, @James Wise. Your "Ultimate Guide to Grading Cleveland Neighborhoods" is, hands down, the most useful web page I have ever run across. If web pages could be worn out from overuse, yours would be in need of serious rehab by now ;)

10 Reply

Dennis M.

Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes

7y

Sadly some people see “race “in everything Facts don’t care about feelings and that’s upsetting to some people I guess. I can’t see how Statistics are racist .I prefer to see things for what they are and not just through a black and white lens

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

7y

I think that it is a good thing to reflect on what investment can do to an area - both good and bad. And while I have no dog in this fight, I think the article makes some interesting points.

If it were me, I would ignore the article and not get into a dog fight - but that is me.....

3 Reply

Kristopher HanksPro Member

Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes

7y

A desperate article by a desperate journalist. Needed a story and decided to find something that could be twisted into racial profiling. Sad.

4 Reply

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Dave DeMarco:

I understand the dilemma James. I would be (just me) formulating a "worst-case" plan if I were you. In the current climate, plus the power of the internet, these things can get out of hand quickly regardless of the fact that this is not your intent or doing.

ehh, I am not really all that worried about it. I am no stranger to viral exposure having gone viral several times with both positive & negative reactions from the general public each time. Real Estate Investors have always been and will always be vilified by some members of the general public not matter what we do. Being one of the most well known Investors in my market it comes with the territory.

4 Reply

Dave DeMarco

Rental Property Investor · Pittsboro, NC · Member since 2016 · 97 posts · 85 votes

7y

Good to hear James. Sorry this happened to you.

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Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Alex P.:

So making observations on more or less profitable areas is racist if the demographics aren't weighted the same? What a joke.

This is what happens when everyone gets a trophy.

15 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

7y

Originally posted by @James Wise:

Originally posted by @Alex P.:

So making observations on more or less profitable areas is racist if the demographics aren't weighted the same? What a joke.

This is what happens when everyone gets a trophy.

I can remember after the GFC when there were huge note pools being sold.. the big buyers would say any state Except OHIO and Michigan.. .. so they were redlining entire states.. I know when I had some credit lines with community banks in the deep south they used our facility to check the CRA box.. they liked us as borrowers and got the benefit of that stability yet making loans in areas that they would not really like to make them..

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1 Reply

Steve K.

Honolulu, HI · Member since 2017 · 247 posts · 315 votes

7y

Originally posted by @Dennis M.:

Sadly some people see “race “in everything Facts don’t care about feelings and that’s upsetting to some people I guess. I can’t see how Statistics are racist .I prefer to see things for what they are and not just through a black and white lens

watch out, @dennis m, now someone is going to write an article calling you and BP racist

LOL

Ned J.Pro Member

Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes

7y

We have a saying in my line of work..."don't feed the crazy"....... so James if I were you, I would not engage ANYONE associated with this article and reaction....you wont "win" and all you do is feed their craziness by engaging in the fight at all

3 Reply

Tony Wood

Member since 2018 · 4 posts · 3 votes

7y

Nothing the media or government does these days shocks me anymore. Their agenda is to divide us all and make themselves look relevant and we need them. Imagine a world without the media and politicians. Pretty peaceful huh? On the business side if that, numbers don't lie. If my market research indicates certain areas are investment worthy and others aren't, I really could care less about the racial demographics.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

7y

Jim is not redlining he is simply drawing lines on a map and describing neighborhoods based on age and theft and school data.. I suspect.

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Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Joel Fine:

Pointing out uncomfortable facts makes some people scream "racist." I hope you do defend yourself from this BS, @James Wise. Your "Ultimate Guide to Grading Cleveland Neighborhoods" is, hands down, the most useful web page I have ever run across. If web pages could be worn out from overuse, yours would be in need of serious rehab by now ;)

Thanks Joel. Glad the guide has helped you with your investing. I wrote the Guide almost 4 years ago & have received almost exclusively positive praise for it. This journalist & a few other in his circle on Twitter are extreme outliers. It's pretty clear from the tone of his article that he is part of the camp that vilifies all Real Estate Investors for simply being Real Estate Investors.

5 Reply

Frank Wolter

Rental Property Investor · Cleveland, OH · Member since 2018 · 191 posts · 432 votes

7y

@Anthony Gayden it is helpful in determining areas to buy and beneficial to investors. But as realtors they are held to laws and regulations. This seems to be a violation of redlining or definitely at least in the gray area for sure where most tend to live in. BUT as an investor I see other out of state investors buying in E.C. . Someone should be able to say something about that. We all know locally that that's one of the worst places to invest. This is exactly why I don't get my license.

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Kristopher Hanks:

A desperate article by a desperate journalist. Needed a story and decided to find something that could be twisted into racial profiling. Sad.

Fake News always trying to stir the pot for the attention &/or click bait...Sad.

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

7y

Originally posted by @Jay Hinrichs:

Jim is not redlining he is simply drawing lines on a map and describing neighborhoods based on age and theft and school data.. I suspect.

To bad that presenting the facts as they are is to offensive for those in the everyone deserves gets a trophy camp.