Hi BP. This post is my first action towards building a real estate portfolio, so please be forgiving if I sound like an idiot.
My father in-law owns a property his son has been living in for the last 10 years. The house will be vacant soon, and he’s looking to dump the property.
This house is a 3/1 with an unfinished basement and all utilities work. I think I would only need to replace carpets and clean the hell out of it for it to be rent ready.
Fully rehabbed houses in this particular neighborhood on the east side of Flint, MI are on the market between 30-40k.
I have gently probed him to see what his desires are with the house. Turns out, he just wants to be rid of it, and is willing to sell the house to me with no money down and seller financing (he is retired and doesn’t really need the money.
I believe this property will easily rent for 600$
My primary questions are these:
If we came to an agreement, what players would I need to round up to make this happen? I was thinking an RE attorney, inspectors, contractors.
Do I need a REA to represent me on the sale?
Should I avoid investing in a C class neighborhood as my first property? This is a neighborhood that my wife and I lived in 20 somethings, so I know the area well.
Any other responses/advice are greatly appreciated!
No money down no interest and a reasonable monthly payment half the Projected rent Or less is a no brainer .
@Dennis M. That’s kind of what I was thinking too! Seems like an extremely low risk opportunity to get myself into the game a bit! Thanks for the reply!
You don't need an agent unless he has one. The players you mentioned should suffice.
Sounds like a great starter deal esp. since you know (and are presumably comfortable with) the n'hood.
The only other thing that came to mind was the water situation in Flint. Has that been resolved?
@Mark Durham Thanks for the reply! Oddly enough, I hadn’t thought of that as a factor yet! It’s still pretty up on the air as to wether it is “fixed” or not. Some say the problem was taken care of back in 2017, but folks are still using filters provided by the gov’t for drinking water. Laundry, showers, dishwashing, etc. are good to go. As my brother is living in the house currently, he provided me this answer. I will definitely do some more digging. Thanks for that perspective of things!!! Easy to forget about when you are so close to the issue...
ALWAYS remember to cross every T & dot every I on every deal. Do as much due diligence as you possibly can (without getting Paralysis of Analysis) on every deal.
It's usually when you forget something, or get a little lazy, that something comes back to bite you on a deal.
I'm sure this was answered before, but you don't need an RE attorney unless you wanted one. I'm not sure your level of comfort with handling the transaction on your own, otherwise you could just do a FSBO with a Title company. Yes always get a property inspector (around $150) and a contractor/repair person.
I own rentals around that area and yes C class over there is great. All I own is C class.
@Alex Flores Thanks! I think I’m going to use an attorneyTo protect both of us, and as a learning experience for me. I have been studying real estate now for about four months, but have zero real life experience with it.
I’m very excited for this opportunity! Zero down payment and zero interest rate can do crazy things to your cash on cash return!
It’s good to hear that this opportunity is in a good area for investing. I am very familiar with the area. If you ever need any boots on the ground, feel free to reach out to me!
@David Bowles First American title over in the gateway plaza off hill and Grand Blanc road has a for sale by owner packet with purchase agreement etc. an attorney would be best to draw up a land contract but the title company has that stuff as well. PM me location of house. Most rents are higher than 600, just depends on where it is at.
@Pamela Morrison Awesome info! That’s the title company I plan to check out as it is the one we used to purchase our home. I was thinking 600 as a bottom line rent should be easy to get, I’ll send you the info!
I agree with @Pamela Morrison . I have a 3 bd 1 bth in Flint Township and recently finished a lease at almost $800 so definitely don't sell yourself short. Although, it was completely renovated not too long ago so they were basically getting a new house. I may even be able to get a bit more next time around if I don't sell it instead. Let me know when you want to grow your portfolio. :)
But this sounds like a great opportunity for you so good luck!
@Canneton Howard thank you so much! Hearing back from everybody on this forum has made me realize that maybe I’m not as crazy as my friends and family think I am! Do you work deals often in Flint? If you had asked my wife, we will be ready to grow our portfolio when we are already rich and financially free! She is still struggling with taking on risk, and managing it well for profit. That said, when we buy this house, I know that if we see success, I will be ready to buy the next one!
I figure real estate is much like having a child, no one is ever “ready “. I think I’m about as ready as I’ll ever be! Let’s take a look down the rabbit hole…
Hey @David Bowles ,
No problem! I have received a lot of help from people here so keep asking away.
I have two other renovation projects that are close to finishing up in Mt. Morris but eventually I would like to move my portfolio closer to where I currently live in Logan Ut.
My wife was very scared going into this as well because her parents had some bad business experiences in the past but we talked a lot about that even though there is risk in doing real estate (or any other business) there is also risk in doing nothing.
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