Newbie from Detroit area

10 Replies

Good morning everyone,

I've been a follower of bigger pockets for years but have finally decided to take my first step to break into real estate. I currently live near Detroit Michigan and moved back here about a year ago after doing 10 years in the army. I'm about to do my first deal so I'm going to lay out the details below and if you guys have any tips I would greatly appreciate it. I'm looking forward to learning from you all!

I'm going to be buying a three bedroom two bath 1,000 ft ranch for 49k. Everything seems to be in decent condition other than some mold on the tile floor in the basement which is being cleaned right now and I planned on ripping up the floor anyway. I inspected the walls in the basement and the mold hasn't spread anywhere else so I think it was just a leak from a pipe maybe. All the comps in the area are going from anywhere around 95 to 120k. The biggest thing I think that's going to help it is new siding. It currently has fiber cement board that is an ugly green and old windows. I'm a siding installer for a home improvement company so I'm going to do all the siding and trim and windows myself. I plan on only spending about $20, 000 in rehab costs and about 4 months to list it. The biggest thing is it doesn't have central air so I know that's going to be anywhere from 2 to 5000 to install. I can post pictures if anyone is interested but I will be using a VA loan and my girlfriend will have her real estate license by July so I plan on saving in commission and closing costs when I sell it. Does everyone think this is a good first flip for me?

@Tom West if your ARV numbers are correct and it's worth $100-120k fixed up, I'd say that's a very solid first deal. You're probably looking at a little under $10k in closing costs, so if you stay on budget you'll be all in at $80k. Sell for $110k and you'll make a tidy profit! Good luck

Be careful about permits!

If you don't pull the proper permits you could be liable until the end-of-time for any related liability issues.

You may want to review a Michigan Seller's Disclosure form before you start repairs to better understand what you will have to disclose for the sale.

Thanks for the info drew. I worked as a sales rep for a construction company and I now work as an installer so even though I might not know all the permits required exactly, I do plan on calling the city to ask any questions before I do anything.

One thing I found weird today. Lincoln Park only requires an external inspection for a home to be sold. That seems odd to me as I feel like the more important parts such as structural, and electricity are on the inside. Would you happen to know anything about Lincoln Park codes?

Originally posted by @Drew Sygit :

Be careful about permits!

If you don't pull the proper permits you could be liable until the end-of-time for any related liability issues.

You may want to review a Michigan Seller's Disclosure form before you start repairs to better understand what you will have to disclose for the sale.

Originally posted by @Tom West :

Good morning everyone,

I've been a follower of bigger pockets for years but have finally decided to take my first step to break into real estate. I currently live near Detroit Michigan and moved back here about a year ago after doing 10 years in the army. I'm about to do my first deal so I'm going to lay out the details below and if you guys have any tips I would greatly appreciate it. I'm looking forward to learning from you all!

I'm going to be buying a three bedroom two bath 1,000 ft ranch for 49k. Everything seems to be in decent condition other than some mold on the tile floor in the basement which is being cleaned right now and I planned on ripping up the floor anyway. I inspected the walls in the basement and the mold hasn't spread anywhere else so I think it was just a leak from a pipe maybe. All the comps in the area are going from anywhere around 95 to 120k. The biggest thing I think that's going to help it is new siding. It currently has fiber cement board that is an ugly green and old windows. I'm a siding installer for a home improvement company so I'm going to do all the siding and trim and windows myself. I plan on only spending about $20, 000 in rehab costs and about 4 months to list it. The biggest thing is it doesn't have central air so I know that's going to be anywhere from 2 to 5000 to install. I can post pictures if anyone is interested but I will be using a VA loan and my girlfriend will have her real estate license by July so I plan on saving in commission and closing costs when I sell it. Does everyone think this is a good first flip for me?

You are in a good company Tom!

@Tom West When you purchased; I am assuming you get seller disclosure.  Check the items in that seller disclosure that you received.  Ensure that issues in that list are addressed.  

Check with the city, for any outstanding issues in terms of building violations; if there are any in their records.

Get all the permits from the city.

For known issues like mold in the basement; have a company to do mold analysis before and after. Disclose that in time of sale with the data.

Good luck

Hey @Tom West

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

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5.Peruse the forums! Ask questions! Answer Questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Good luck,

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