All Forum Posts by: Don Petrasek

I have had 4 single families lead certified and paid $315 each with a multi property discount. All passed without any major issue.  Note that all have vinyl replacement windows and doors & I made sure there was no peeling paint anywhere prior to the testing. I also cleaned all the windows and doors just before tester came to property.  That required some effort ( did it myself). I actually wound up taking care of a bunch of other minor things while preparing the property for lead testing (e g junk removal) so it turned into an opportunity to take care of punch-list items I’d been putting off.

Overall the process was much easier than I expected.  

@Dave Stokley do you know anyone who has applied for and received the $500 incentive in the last 6 months or so?  I had heard about that in an investor group meeting last year in the Spring but understood that there were limited funds available which were almost gone (expected to be used before the first set of zip code deadlines)

@Yehuda Wexler in the Seller's market that we are in it's challenging to find and get a good two family under contract even when you are working with an agent, much less without one.  A good investment focused agent can help by directing you to lenders who are experienced working with buyers purchasing a two family as their first house, help you identify areas to look in based on your qualifications, provide feedback on rents and potential appreciation and most importantly act as your advocate during the offer/escrow process making sure that your interests are represented.  

A good buyers agent oftentimes can get information from the listing agent that will help make sure your offer is competitive without overpaying......or make it stand out in a multiple offer situation so that you have a better chance of the Seller accepting it.  There's really no benefit to not using an agent as a buyer particularly as a first time buyer. 

Definitely start by contacting the city of Cleveland Building Department for guidance on how to make the 3rd floor unit legal.  It does go beyond adding additional utility meters.  Things like renter egress (their ability to get out in the event of a fire) are considered and depending on the property layout it may not even be possible to have the 3rd unit.  If that's the case, you should be able to at least use it as additional living space for the 2nd floor tenant which will help bump that rent rate up. Also make sure your insurance company is good with whatever you do.  More than one insurance agent has told me that just because I have a policy on a house doesn't mean they're going to pay every claim....you have to make sure you aren't doing something that goes outside of your coverage. 

To stay under $100k and be turnkey, you'll have to be looking in some of the most challenging areas to manage property in the area (pretty much city of Cleveland).  I don't typically recommend this as a starting point for new investors....its easy to get scared or frustrated if you run into issues immediately.  Once you have some experience it will be a lot easier to take things in stride and then you can look at that type of investment to diversify your portfolio.  You should consider adjusting your bar to under $200k as a starting point.  That will allow you to purchase a property that's more likely to be stable- and a better first experience. 

You can also try Dan Mytnick at JAM Tree and Shrub.  440-454-4726 

@Linzey Ledesma I have 4 properties of my own in the 44111 zip code and usually am there with my investor clients a couple times a week so know the area very well.  Reach out if you still need help. 

@Leo Powell the lead safe certification is not a point of sale requirement.  Its a requirement related to rental registration ( from CLE ordinance:  related to rental registration, certain residential rental units required to be certified lead-safe, lead hazards and ­­­­lead poisoning prevention).

If you are buying a rental, you should confirm that the property is registered as a rental and that the lead safe certification is done (not all zip codes are due at this point though - deadlines go thru March 2023).  If its not, you'll have to do it or you won't be able to evict.  Housing court won't accept properties that aren't registered with a lead safe certification. 

And if it’s a condo that you’re looking at, you’re going to have to see if the condo rules prohibit short term leasing (most that I’ve seen do). I just got a letter from the condo association of a condo that I own saying that they found some units advertised as Airbnb, that it was a violation of bylaws and that they would be pursuing owners starting with a cease and desist. Condo association are watching for it and/or get reports from other owners.

@Barry Robinholt   congratulations on your decision to begin a real estate portfolio.  Living in your first purchase and then converting it to a rental is a great strategy particularly if you have friends/family that will move in with you and pay you rent. 

The first step is to get pre-approved for a mortgage.  Once you do this, you'll know what price range you can safely look in.  At that point, an agent can help you identify the areas that fit your price range and strategy to turn the home into a rental.  That will likely narrow it down to a few neighborhoods that you can investigate and decide whether or not you'd be comfortable there.  At that point, you can focus on finding the right house.  

Even though you'll be living in the home, I'd evaluate it as a rental since your strategy involves turning it into one in a short period of time.  You don't want to buy something and then find yourself with negative cashflow when you go to rent it in 1-2 years. 

@Dale Nesmith Where are you seeing these ads? Tax delinquencies in Cuyahoga County are sold off by the county to a third party. Yes you can set up a payment plan with the third party - their business model is to set up payment streams (with an 18% interest rate if I'm not mistaken which will negatively impact your ROI) secured by delinquent tax certificates (that they can foreclose in if payments aren't received). But there's no guarantee that they'll set up a plan for every property (nothing says they have to as far as I know) and the county has the right to keep any property out of the delinquent tax certificate sales to third parties....and foreclose on their own if they choose to. Or the third party could choose to foreclose immediately.

You should be closing on any property you buy through a legitimate title/escrow company.  Having all liens/assessments paid in full at closing and the property being eligible for title insurance is included in every standard purchase agreement that I've ever seen.  

Reach out to any title company in the area, they can explain further....or a real estate attorney before you consider buying on the terms you describe.  Nothing wrong with buying properties that are behind on taxes, have liens or other issues that effect title.....just as long as you have them covered off at closing.