Contractor · Saint Clair Shores, MI · Member since 2018 · 10 posts · 23 votes
Hello everyone I am reading and watching about real estate for the past 10 months and I think I am ready to make my first step and purchase a rental property.
This 3 unit house that I found in Hamtramck, Michigan for 50,000$. The estimated repairs are around 10k. And the value of the house after the repairs it comes to little over 100k as of the market right now, and there is a tenant In the lower unit paying 600$ a month
Numbers looking good the only problem is that i can’t get a loan on it because of the repairs.
Any thoughts and ideas about the property and to how can I get a partner for this project.
Thank you in advance
Donald, did you look over that house with someone who understands buildings well? I have been in that house. It has foundation problems. The back building has very serious foundation problems, too. Also, the city has the lot zoned as a two unit. As far as I can tell there is are no documents for the back house. The city is getting more strict about permits. Probably that back bukding just just needs to be torn down. Having looked at it with a builder I concluded I wouldn’t pay more that 30k for it. Be sure you look at it with someone who understands foundations and hamtramck permits before you buy!
Where have you looked for a loan? Banks? Private lenders? How many of each have you spoken to? Are you planning to flip it? Or rent it out? If you are looking for a partner (or a loan, etc.) have shared the numbers to estimate a return? Have you looked at any other options, like a HELOC on your own home or anything like that?
@Matt Gibson
Thanks for replying Matt.
I have spoken with 2 banks and they said they would not give me a mortgage for the property because the one unit needs 6 windows and some siding work outside.
I have about 15k in cash which is not enough to buy the house but it’s enough to do the repairs and then refinance it.
The bottom unit is renting for 600$ up unit it can be rented for 500$ and the back unit can be rented for 400$.
So 1500$ total in rent.
There are 3 duplex’s for sale near by with range from 109k-120k
@Anthony H.
Hello Anthony
Here is a link from the listing https://www.zillow.com/homedetails/2348-Andrus-St-HAMTRAMCK-MI-48212/88565176_zpid/
The bank would not lend money because of the house needs rehab
You should work with a realtor and not necessarily with the listing agent. A buyer's agent works for your interest and does not cost you anything as the fees are paid by the seller. So to me that triplex is worth even less than $50k.
@Anthony H.
Yes I did and looks fine.
Obviously I’m going to have an inspector take a look and tell me what repairs the house needs and I will go from there with the offer.
And I will get a realtor thanks for your advice.
Donald, did you look over that house with someone who understands buildings well? I have been in that house. It has foundation problems. The back building has very serious foundation problems, too. Also, the city has the lot zoned as a two unit. As far as I can tell there is are no documents for the back house. The city is getting more strict about permits. Probably that back bukding just just needs to be torn down. Having looked at it with a builder I concluded I wouldn’t pay more that 30k for it. Be sure you look at it with someone who understands foundations and hamtramck permits before you buy!
I would ask a contractor. He can give you a realistic estimate on what it would take to fix it.
And you need to think through that back house well. The city won’t likely give you permission to fix it and you certainly can’t use it as it is. My builder though it might have asbestos siding. That’s not a problem if you leave it alone or cover it with more siding but if you have to tear it down you’ll pay a premium for asbestos.