$1,500 Toledo Land Bank House to $1,300/Mo Rental, 7 Years Later, Before & After Pics

Derek DeVerna · 2026-10-28T07:18:30-07:00

Investment Info:Single-family buy & hold, Toledo, OH. Purchase $1,500 | Rehab $87,812 | All-in $92,231, cash | Rent $1,300/moWhat made you interested in investing in this type of deal?This was my first deal after moving home to Toledo to go into business for myself full-time. I wanted a project that would challenge me and force me to build a large team of reliable vendors and contractors.How did you find this deal and how did you negotiate it?I found this Lucas County Land Bank listing on the MLS and represented myself as the buyer's agent.How did you finance this deal?Cash. This property is free and clear.How did you add value to the deal?Pulled permits, added a full bath, and spent $86 per square foot to rehab the entire house top to bottom. 25 contractors tried out on this deal alone.What was the outcome?Same residents since April 2020, great stewards whose care keeps adding value. Average cash flow of about $12,400 a year from 2021 through 2025.Lessons learned? Challenges?Despite going over budget ($48K estimated, $92.2K all-in before move-in), I refused to sacrifice the quality of the final product. Ultimately, that allowed us to attract very high-quality residents. This is still a core philosophy of the business today.This house became the foundation of the 100-unit portfolio we manage today through our licensed Ohio brokerage. We still use many of the vendors, suppliers and systems developed on this first deal, though they've been refined over the years.

Simon W.Business Member

Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 688 votes

4d

Great breakdown, Derek. The number I'd pull out is the all-in, because it's what makes the return real. $12,400 a year on $92,231 is about 13.4% cash on cash, with no loan involved.

On the books, the $1,500 purchase plus the $87,812 rehab (and the closing and carrying costs that took it to $92,231) is generally all basis, not expense. Less land, that gets depreciated over 27.5 years, which is roughly $3,350 a year if land is small. So the tax return on that $12,400 of cash flow likely showed closer to $9,000 of income. Some of the rehab, like appliances or flooring, may have been shorter-lived property, which would have sped that up.

The lesson I'd take for anyone reading: with 25 contractors on one house, a project ledger by trade is what lets you separate repairs from improvements at the time instead of guessing later. Going from a $48k estimate to $87.8k is a lot easier to learn from when every invoice has a home.

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Derek DeVerna
OP
Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
2d
@Simon W.
You are on point. Your numbers line up closely with what our CPA actually filed.
We tracked the whole rehab in a project ledger, every one of the 25 contractors, so separating repairs from improvements was straightforward when it came time to file.
With this being said, our accounting systems have grown leaps and bounds since this first Toledo deal. When looking back through the ledger it is so much busier/disorganized than our 2026 ledgers. I did not think about this improvement initially and am glad your post encouraged me to do so.
I'm curious about your take. Now that the accelerated portion is behind us and depreciation drops to $2,324 a year, taxable income climbs. Do you see value in continuing to hold this property long term, or would you be more inclined to 1031 into the next project when the tenants finally do move out?
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Simon W.Business Member
Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 688 votes
2d
Glad it lined up with what your CPA filed, and good to hear the ledger held up.
On hold vs. 1031, I wouldn't let the depreciation drop drive it by itself. Going from the accelerated years down to $2,324 a year adds a few thousand of taxable income, which is usually a few hundred to maybe a thousand in actual tax depending on your bracket. That's real, but it's small next to the return on your equity. If the house is worth, say, $160,000 today and throws off $12,400, that's under 8% on equity sitting there free and clear.
The thing people miss with a 1031 is that it doesn't reset your depreciation. Your low adjusted basis carries into the new property and that piece keeps depreciating on the old schedule. You only get a fresh 27.5 years on the new money or debt you add, so the exchange usually works best when you're trading up into something bigger with leverage.
If you'd hold it long term anyway, the basis step-up for heirs is the other side of the math. Since the tenants moving out is your trigger, I'd run both versions with your CPA when that happens.
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Jimmy Samaha

Staten Island, NY · Member since 2013 · 131 posts · 66 votes

3d

Nice work, Derek. Same residents since April 2020 is probably the biggest reason this one performs the way it does. $1,300 a month is $15,600 a year, so $12,400 of cash flow means you kept about 80 percent of the rent, which only happens when there's no vacancy and no turnover cost for years.

For anyone reading who wants to copy the deal, I'd still underwrite a new one with a real vacancy and turnover cushion instead of expecting to keep 80 percent of the rent. The long term tenant is something you earned by doing the rehab right, but it's not something you can count on going in.

Also a good reminder that a $48K estimate turned into $92K all in. Plenty of people would have cut corners at that point, and it sounds like finishing it properly is what paid off.

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Derek DeVerna
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Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
2d
I appreciate you taking the time to break down the numbers. You're absolutely right, nobody should count on a resident staying seven years, and anyone underwriting a deal like this should build in a real vacancy and turnover cushion.
The quality of the rehab is a big part of why they've stayed. We redid nearly everything in this house up front, so things are newer and don't break down often. That has kept maintenance costs low and the residents very content.
Even seven years later, they'd have a hard time finding a comparable rental at that price point. I haven’t increased the rent more than one time in that seven year span. They are great tenants and care for the house. This is much more valuable than the few extra bucks we would make with yearly increases.
What vacancy and turnover cushion do you usually build into your underwriting in your preferred market? + What is your preferred market?
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Ashish AcharyaBusiness Member

CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes

3d

Derek, this is a great example of how the right amount of work can completely change a property. Going from a $1,500 purchase to a fully renovated $1,300/month rental is pretty impressive.

One thing I'd add as you scale from this first deal toward 100 units is to keep a close eye on the tax side of all that renovation spending. With $87K+ going into the property, making sure improvements, repairs, and other project costs are being tracked correctly can make a meaningful difference to your depreciation and future basis.

I'd also start looking at each property's after-tax return, not just cash flow. What works on a $92K all-cash SFR can look very different as you move into larger acquisitions, and that's where depreciation and cost-seg opportunities can become more meaningful.

Great first deal, and clearly the systems you built around it ended up being worth as much as the property itself.

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Derek DeVerna
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Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
2d
Ashish, thank you for taking the time to read through and reply to this post. Your experienced insight from a tax perspective is well received and appreciated.
We currently control 100 rental units at 97.9% occupancy as of 11-1-26.
You are 100% correct in that improved/refined accounting systems have made all the difference in growing the portfolio, as well as taking advantage of all the tax incentives long term buy and hold real estate investments offer.
I took your advice and ran the after-tax numbers on this property. Here is the after-tax cash flow and return on the $92,231 all-in for the last 4 years:
2022 - $9,816 (10.6%)
2023 - $9,696 (10.5%)
2024 - $10,707 (11.6%)
2025 - $10,674 (11.6%)
The numbers look good, but in reality I still have not recouped my initial investment. Even after nearly 7 years of solid/consistent rental income.
At what purchase price do you start recommending a cost seg study to your clients?
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Andrew FidlerBusiness Member

Real Estate Broker · Toledo, OH · Member since 2011 · 386 posts · 434 votes

3d

@Derek DeVerna - Quite the project to bite off first-time through, my friend!

It's been 15 yrs since I did a Lucas County Land Bank deal, I just put an offer in for one two weeks ago and can't say I came away feeling the reception (and promised financial colonoscopy) was worth it.

Sure, I would have landed a $20k property for $5k but the title would have been been encumbered until I passed their hoops and interestingly enough my "I own a property management company we will be using contractors and pull permits" was met with a demand I was to identify who was going to be working and how much I was paying them...this was at the time of the first offer. (Contractors and pricing aren't solidified until the day I want the work started and the contractor's schedule and budget are in line with my own)

I concluded I will stay with my usual...avoid bureaucracy because the simplicity gives you the same savings without the headache.

Derek - if you had just purchased the house outright how many upgrades would you had declined because you didn't have the Land Bank as an overseeing partner?

You can DSCR the cash back out of the property I'm quite sure, a financier should be excited to see all those permits pulled!

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Derek DeVerna
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Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
1d
It is unfortunate your Land Bank experience didn't go well. That organization should be delighted to have a local investor/broker with your experience and skill buying one of their properties. That's as close to a guaranteed successful rehab as you'll find in Toledo. Your track record is proven and they are foolish not to have made the process easier for you.
This was my first and only Land Bank deal. We've looked at others since, but none of them have been worth making offers on.
In 2019, I was in my mid-20s and coming from the Cincinnati market, where we did bigger rehab projects. That's all I knew, so naturally I tried to replicate the Cincy system on my first Toledo deal. Honestly, I did a lot more work on this house than the Land Bank required. This is undoubtedly why the rehab budget blew up. My rehab strategy has since changed and is now more in harmony with the Toledo rental market.
On the DSCR idea, at this point in my career I'm very debt averse. I see debt as a villain and am forcing myself to pay off all outstanding loans before acquiring any new properties. That's why I haven't added any units to my personal portfolio since 2021.
In our business, we have an ever-increasing range of expenses and one single source of revenue. Avoiding debt has helped me cope with this hard truth.
How much time did it take you to prepare everything for your Land Bank offer?
Do they allow you to make the case for your offer in person at their weekly Thursday meeting? Or is it decided only on the documents you submit to their listing agent?
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Jay HinrichsBusiness Member

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

2d

nice work keep stacking up those paid for properties thats the way to true wealth and financial freedom IMHO.. at least at those price points.

I have been funding investors in Toledo for years both for retail and investor flips and for BRRR for their own portfolios.. Nice under the radar market in my mind.

I was there in Sept. for the first time which is unusual for me I usually travel to the markets I am going to be providing capital for a few times a year however my current clients there are so solid I just did not really see the need until this year.

Impression: Toledo is MUCH bigger than I had imagined I did not realize the size of the MSA and did not realize its anchored by Stellantis. Plus only 45 minutes to Detroit airport which other than the massive construction currently is a pretty nice airport to fly in and out of with a ton of connections.

I also fund investors that need capital for foreclosure ( True court house steps buying) and these tax sales were no loans can be made we do that in a capital partner JV set up been doing it for decades I like that end of the business as well.

Keep up the good work..

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Derek DeVerna
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Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
1d
Agreed, stacking paid-off properties is much less stressful.
Toledo is a solid, affordable market. Geography works to our advantage. I-75 and I-90 are two major thoroughfares that reach a lot of the country and give the area access to many other markets.
The city is big enough to have multiple options. As certain zips/areas have gotten overly expensive, we have been able to replace them with new neighborhoods that we still feel comfortable working in.
I have never done a tax foreclosure deal and would genuinely enjoy learning how to build a system to take advantage of those opportunities.
Have your investors been successful acquiring tax sale deals in Lucas County?
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BJ Everson

Realtor · Columbus, Franklin County · Member since 2026 · 45 posts · 11 votes

2d

Great breakdown, Derek. Thanks for posting real numbers seven years in. The point I'd underline for newer investors is your reply about doing the rehab right once: mechanicals, roof, plumbing. In my own value-add rentals, the houses that got a cheap rehab are the ones that eat cash flow at every turnover. I'm curious how you think about return on equity on a paid-off house like this now. Do you keep it free and clear, or pull equity to fund the next acquisition?

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Derek DeVerna
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Real Estate Broker · Toledo, OH · Member since 2019 · 63 posts · 73 votes
9h
Yes, completely free and clear. My entire personal portfolio will be free and clear before my next acquisition.
Debt was a valuable tool early in my career. I did not realize how dangerous debt was until after reading Dave Ramsey’s books at 30 years old. When you are young, ambitious, and have had a little success, banks will give you as much money/debt as needed in order to completely ruin everything you've built.
I have not acquired any new properties for my personal portfolio since 2021, as I've been strictly focused strictly on debt paydown and building the brokerage business. Mainly helping out-of-state investors do deals in Toledo. That allows me to continue practicing the art of long-term buy and hold deals without taking on any additional debt load or loan obligations. It also allows me to keep a loyal construction team for turning properties over efficiently.
In my experience, a cheap rehab almost always leads to a subpar applicant pool to select a tenant from. Is this framework consistent with your market?
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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes

10h

Great share!

Now share more about how you scaled to 100 units in 7 years...

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$1,500 Toledo Land Bank House to $1,300/Mo Rental, 7 Years Later, Before & After Pics

$1,500 Toledo Land Bank House to $1,300/Mo Rental, 7 Years Later, Before & After Pics

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