#24 rental was purchased today

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#24 rental was purchased today

George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes

this was a probate sale. it came on the market for 39.9k. not sure how long it was on the MLS for, but i offered 40k. was shocked to hear that they took my offer.

just closed on it a few hrs ago. i got $500 back because they didn't clean it at all.

budget - guessing around 17-20k, but we will spend whatever it takes to make it the nicest house on the block. ARV is around 100k, no garage though.

time? it will get completely cleaned/demoed and locked for a few months until we are done with #22 and #23, and maybe #25, which will be a flip. this one will sit on the back burner and simmer. but normally we can do this in 2 months or less. i try not to rush these things.

rent - projected around $1,

150 if i put a shed, since it has no garage.

not sure if you can see the rest of the pics if you follow the link - https://picasaweb.google.com/105275838861600742492...

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Billy Smith
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
10y

Good luck,  when I get a house  latch on to it like a mad dog big passion  get up at 4am and work on it tell I am toast ,time is money 

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  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    0Reply
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    10y

    Congratulations on Number 24.  That one looks rugged!  I'm looking forward to seeing the "after" photos!

    1Reply
  • Tajh Tyler
    Rental Property Investor · Nashville, TN (nashville tn) · Member since 2016 · 7 posts · 1 vote
    10y
    How do you know what it will sell for? I guess if you bought it for so low it doesnt really matter. But how do you know how much the renovations will cost before hand? Does it just comes with trial and error with this being your 24th property?
    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Tajh Tyler:

    How do you know what it will sell for? I guess if you bought it for so low it doesnt really matter. But how do you know how much the renovations will cost before hand? Does it just comes with trial and error with this being your 24th property?

    actually it does matter what it sells for since the higher the ARV, the more money in your pocket. But in my case, since this is a rental, the ARV does not matter (until I sell).

    as far as knowing what things cost... it's kind of like groceries - you have no idea what a 5lb of gluten free flour costs until you start buying it regularly. rehabs are almost the same way, just not as consistent as grocery items.

    3Reply
  • Darrell D.
    Rental Property Investor · Springfield, OH · Member since 2014 · 104 posts · 63 votes
    10y

    Congrats.   Most of us only see potential.  It has good windows but thr floor is probably damaged under the kitchen cabinets.   It's all fixable.

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Darrell D.:

    Congrats.   Most of us only see potential.  It has good windows but thr floor is probably damaged under the kitchen cabinets.   It's all fixable.

     the floor is bad in a few places... that wall in the kitchen must have had a leak for MANY years because the 2 "sistered" joists in the basement have sheared off where they meet the concrete foundation. can you imagine rotting and shearing off a 2x4 standing on the short end just by pure weight overtime?

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    10y

    Congrats @George P.!  Do you have other buy and holds as well?  Glad to see you're keeping this as a rental and have a plan outside the 'rehab rat race' lol.  Sweet!

    0Reply
  • Ed L.
    Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
    10y

    I like the gnarly ones like that.  Just makes for more rewarding before and after photos.  

    Anything can be fixed in a house, it just takes the right buy in price, right people, time, and $$$.  

    Congrats on #24!

    1Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Steve Vaughan:

    Congrats @George P.!  Do you have other buy and holds as well?  Glad to see you're keeping this as a rental and have a plan outside the 'rehab rat race' lol.  Sweet!

     steve,

    all of our properties are rentals. check our my website too.

    this particular one is in Garden city, michigan. borders Wesland, close to livonia.

    0Reply
  • Chad Rider
    Canton, MI · Member since 2016 · 53 posts · 9 votes
    10y

    Congrats George. You're certainly not afraid of a challenge. Would also love to see some "after" pics.

    0Reply
  • Michael Boyer
    Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
    10y

    Neat pics and project....you have some "vintage"  mid century components... Ran into that same boiler before and it was heavy (like 4 guys heavy)... Those wood floors may clean up with a refinish... And someone saved you the vinyl asbestos tile removal/disposal headache but you can see the marks from the pull up....maybe some good bones left and ideally it looks better for the outside, so much interior work to go...Best of luck

    1Reply
  • Carson M.
    Investor · Ferndale, MI · Member since 2013 · 130 posts · 41 votes
    10y

    Congratulations on the recent purchase. 24 rentals is no small accomplishment. Have you been finding all your deals through the MLS?

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    Congrats! That place makes my two new rehabs look like they are already rehabbed! If you don't mind me asking, how long to get from property #1 to property #24?

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  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @JD Martin:

    Congrats! That place makes my two new rehabs look like they are already rehabbed! If you don't mind me asking, how long to get from property #1 to property #24?

     we started in beginning of 2010. we could have 2 more now but I updated them for a family member and updated them for him. 

    0Reply
  • Cory Mccarthy
    Investor · Fenton, MI · Member since 2015 · 142 posts · 46 votes
    10y

    @George P., wow great find, but I can't imagine that is only a $20k rehab.  How can you possibly do it that cost effectively?  Do you do all the work yourself and where do you buy your materials to keep your costs that low? Based upon just the pictures, I would have guessed $40-$50K min to completely gut and put back together.  Please share how you can get costs so low.  I will also echo several others here and say, I really would love to see the after shots as well.  Please share those when you are finished.  Best of luck on this new project!

    0Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    10y
    Originally posted by @George P.:

    this was a probate sale. it came on the market for 39.9k. not sure how long it was on the MLS for, but i offered 40k. was shocked to hear that they took my offer.

    just closed on it a few hrs ago. i got $500 back because they didn't clean it at all.

    budget - guessing around 17-20k, but we will spend whatever it takes to make it the nicest house on the block. ARV is around 100k, no garage though.

    time? it will get completely cleaned/demoed and locked for a few months until we are done with #22 and #23, and maybe #25, which will be a flip. this one will sit on the back burner and simmer. but normally we can do this in 2 months or less. i try not to rush these things.

    rent - projected around $1,

    150 if i put a shed, since it has no garage.

    not sure if you can see the rest of the pics if you follow the link - https://picasaweb.google.com/105275838861600742492...

     I see your market for a lot of Cheaper rentals. I just warn folks on the lower end rentals. I promise I am speaking form experience at one point I had 37. All were low end rentals.

    Purchased from 15k low to high 30K ARV ( which means nothing in rental properties ) Were sitting around 75K to $90k ARV. Most the FMR were $650 to $850. I had some real winners in the group. At the same time I had some properties no matter what I did they just sucked money from us.

    I m not against lower end properties, but you must keep enough to balance the losses with the gains. My taste has switched to the A , B assets only. Long term the picture, and out come  looks a lot better. I feel the lower end rentals, we are slowly pricing the tenants out of the homes. I asked many investors who purchased in (Flint Michigan ) and some markets in Detroit. To show me consistent returns over a 5 year period.  

    Just my two cents and rambling on...

    0Reply
  • Ron Walraven
    Investor · Troy, MI · Member since 2012 · 38 posts · 17 votes
    10y

    Hello George,

    Why did it take so long to close? Did you have a title issue? MLS says 120 days.

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Ron Walraven:

    Hello George,

    Why did it take so long to close? Did you have a title issue? MLS says 120 days.

     it was probate. i think we had accepted offer sometime nov, or oct. i really dont know the details. i just know i wasn't ready for it to be purchased and i had to scramble to get money to close on it.

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Alex Franks:
    Originally posted by @George P.:

    this was a probate sale. it came on the market for 39.9k. not sure how long it was on the MLS for, but i offered 40k. was shocked to hear that they took my offer.

    just closed on it a few hrs ago. i got $500 back because they didn't clean it at all.

    budget - guessing around 17-20k, but we will spend whatever it takes to make it the nicest house on the block. ARV is around 100k, no garage though.

    time? it will get completely cleaned/demoed and locked for a few months until we are done with #22 and #23, and maybe #25, which will be a flip. this one will sit on the back burner and simmer. but normally we can do this in 2 months or less. i try not to rush these things.

    rent - projected around $1,

    150 if i put a shed, since it has no garage.

    not sure if you can see the rest of the pics if you follow the link - https://picasaweb.google.com/105275838861600742492...

     I see your market for a lot of Cheaper rentals. I just warn folks on the lower end rentals. I promise I am speaking form experience at one point I had 37. All were low end rentals.

    Purchased from 15k low to high 30K ARV ( which means nothing in rental properties ) Were sitting around 75K to $90k ARV. Most the FMR were $650 to $850. I had some real winners in the group. At the same time I had some properties no matter what I did they just sucked money from us.

    I m not against lower end properties, but you must keep enough to balance the losses with the gains. My taste has switched to the A , B assets only. Long term the picture, and out come  looks a lot better. I feel the lower end rentals, we are slowly pricing the tenants out of the homes. I asked many investors who purchased in (Flint Michigan ) and some markets in Detroit. To show me consistent returns over a 5 year period.  

    Just my two cents and rambling on...

     thank you for your feedback. i am always cautious about the houses we buy and i can live in any of them immediately and would not have a problem.

    our homes are A to C+ area (Maybe it's a B-, who knows). take a look at our site.

    http://onpointrentals.com/index.php?p=1_2_Properti...

    0Reply
  • Harland King
    Real Estate Investor · Grandville, MI · Member since 2014 · 4 posts · 0 votes
    10y

    George #24 that is awesome my question is how do you pay for these properties. Do you have Investors do you mortgage them yourself or do you do HELOC's I want to jump in but have the problem with cash flow to make it happen.

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Harland King:

    George #24 that is awesome my question is how do you pay for these properties. Do you have Investors do you mortgage them yourself or do you do HELOC's I want to jump in but have the problem with cash flow to make it happen.

     i buy them with a line of credit, then i pull a mortgage on them. i do whatever i can to get them.

    0Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    10y
    Originally posted by @George P.:
    Originally posted by @Alex Franks:
    Originally posted by @George P.:

    this was a probate sale. it came on the market for 39.9k. not sure how long it was on the MLS for, but i offered 40k. was shocked to hear that they took my offer.

    just closed on it a few hrs ago. i got $500 back because they didn't clean it at all.

    budget - guessing around 17-20k, but we will spend whatever it takes to make it the nicest house on the block. ARV is around 100k, no garage though.

    time? it will get completely cleaned/demoed and locked for a few months until we are done with #22 and #23, and maybe #25, which will be a flip. this one will sit on the back burner and simmer. but normally we can do this in 2 months or less. i try not to rush these things.

    rent - projected around $1,

    150 if i put a shed, since it has no garage.

    not sure if you can see the rest of the pics if you follow the link - https://picasaweb.google.com/105275838861600742492...

     I see your market for a lot of Cheaper rentals. I just warn folks on the lower end rentals. I promise I am speaking form experience at one point I had 37. All were low end rentals.

    Purchased from 15k low to high 30K ARV ( which means nothing in rental properties ) Were sitting around 75K to $90k ARV. Most the FMR were $650 to $850. I had some real winners in the group. At the same time I had some properties no matter what I did they just sucked money from us.

    I m not against lower end properties, but you must keep enough to balance the losses with the gains. My taste has switched to the A , B assets only. Long term the picture, and out come  looks a lot better. I feel the lower end rentals, we are slowly pricing the tenants out of the homes. I asked many investors who purchased in (Flint Michigan ) and some markets in Detroit. To show me consistent returns over a 5 year period.  

    Just my two cents and rambling on...

     thank you for your feedback. i am always cautious about the houses we buy and i can live in any of them immediately and would not have a problem.

    our homes are A to C+ area (Maybe it's a B-, who knows). take a look at our site.

    http://onpointrentals.com/index.php?p=1_2_Properti...

     Was Just playing around on your site. The houses look great, and you have my attention. Always looking for different markets for potential clients. The problem with pictures they only tell half the story. When I was traveling, and speaking over seas, and here in the USA to investors. I used to ask for videos of the subject areas.

    Weds Evening, Friday Evening, Sunday afternoon. Some thing like this, and I could get a better understanding of each area. It would be short videos of the subject home  along with 360 view of the street. 

    Now looking at

    S. Wildwood Street
    Westland, Michigan 48186

     The area seems to be a solid rental area. With very few retail sales. So right away I am thinking C class assets. Most of the houses are 3 bed 1 bath .Which as investors we know very little retail action. For lower end rentals ,that fits the criteria of C to C- type deals. Promise I am not knocking these type of homes. I look at the employment capabilities or opportunities  of the renters for homes similar to this. I have owned many of the 3 and 1 type of homes. Majority of the renters are the ones struggling today. When rents are 30% to 40 % of their income. That's the part the I worry about keeping these units rented long term.

    That why I prefer to focus A or B assets or multifamily.

    Just my two cents

    Alex

    0Reply
  • Harland King
    Real Estate Investor · Grandville, MI · Member since 2014 · 4 posts · 0 votes
    10y

    When you say line of credit are you talking about line of credit with credit cards?

    0Reply
  • George P.
    OP
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y

    it a line

    0Reply
  • Tom A.
    Investor · West Bloomfield, MI · Member since 2009 · 358 posts · 306 votes
    10y

    Nice purchase, George. Talk about your deferred maintenance though!

    For folks not from this area, at $1150/month and $100K ARV we're not talking a C area, in my opinion. I know everyone's definition of A/B/C can vary, but an area with ARV=$100K, rent=$1150 around here is generally considered a safe, OK area. Working class, average schools, very little Section 8. In fact, according to US Census data that census tract is 87% homeowner/13% rental.

    0Reply
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