All Forum Posts by: Chris Fisher

You're right to be skeptical, it’s definitely more complicated than just paying back taxes and getting a house. In Ohio, tax sales usually happen through an auction process after the county forecloses on the property due to unpaid taxes. You're bidding against others, and winning means you’re essentially buying the title, not just taking over by paying a bill.

The foreclosure part is handled by the county, so you don’t initiate it, but the process can take months. Costs vary, but aside from the back taxes, you’ll need to budget for legal fees, repairs, possible evictions, and title issues, many tax sale properties come with baggage. If someone is still living there, you’ll likely have to go through formal eviction or offer them cash for keys. It's doable, but not quite the "easy win" it sounds like at first.

@Chris Fisher Toledo is like a mini-Detroit.

In Detroit, if you're buying under $50k properties you're either:

1) Buying Class D - good luck!

2) Buying Class C BRRRs that need at least $20k of work

Here's some metrics to consider:

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Hey Chris, welcome to the game. Toledo’s definitely got a lot of cheap properties, and yeah those $50K fixer-uppers can look real tempting. The rent-to-price ratio sounds amazing on paper but the catch is always the neighborhood. 

If it’s rougher areas, you’ve gotta account for stuff like higher vacancy, more repairs, tougher tenants, and probably higher property management costs if you’re outsourcing. That $1200 might look great but it could come with headaches.

BRRRR can work, especially if you're hands-on with rehabs and can get stuff done cheaper, but lenders might not love those neighborhoods and you might run into low appraisals when you try to refi. Definitely worth checking out what other local investors are doing. Some zip codes in Toledo have good cash flow and stable tenants, but some are just cash flow traps.

Welcome to the group!

As you begin diving into the world of real estate investing and start laying the groundwork for your strategy, one of the most important steps you can take early on is to prioritize both tax planning and asset protection. These two elements often get overlooked in the excitement of deal-making, but they play a critical role in the long-term success and sustainability of your investment journey.

A well-thought-out tax strategy helps ensure you're maximizing all available deductions, utilizing the most favorable tax structures, and ultimately keeping more of your hard-earned income. By proactively planning how your investments are taxed, you can significantly reduce your overall tax burden and position yourself for greater financial flexibility.

Equally important is establishing a strong asset protection plan. Real estate investing comes with inherent risks. Lawsuits, liabilities, and creditor claims can quickly jeopardize everything you've worked to build. The right legal structure can help shield your personal assets, reduce your exposure to litigation, and make it more difficult for creditors to gain access to your wealth. Proper planning can also improve your negotiating position in legal disputes and potentially lead to more favorable outcomes.

To navigate these areas effectively, I strongly recommend working with qualified professionals, including a knowledgeable tax advisor who understands real estate and a seasoned asset protection attorney familiar with your specific goals and risk profile. Having the right team in place from the start can save you countless headaches down the road and give you confidence as your portfolio grows.

Wishing you success and smart investing!

Disclaimer: This message is for informational and educational purposes only and should not be considered legal, tax, financial, or investment advice. No attorney-client, fiduciary, or advisory relationship is created by this communication. Always consult with qualified professionals familiar with your specific situation before making any decisions.

Hey Chris! Welcome to the journey!

Toledo's got potential, but I'd be cautious with those sub-50K fixer uppers if you're looking to BRRRR. Most of those are probably in C/D class areas, so you'll need to make sure there's enough resale or appraisal value to actually pull your money back out. Tenant screening is huge in those neighborhoods, and you'll want to confirm that folks are actually paying $1,200 consistently. I'd suggest grabbing rent comps from local property managers, happy to share my contacts if you're interested.