Rental Property Investor · New York, NY · Member since 2017 · 9 posts · 18 votes
This spring I purchased my first Duplex in Metro Detroit (Center Line) for 93k. After listening to the BP Podcasts for just over a year I finally jumped in at age 23 and bought a duplex with a 5% down owner occupied loan. I did about 12k worth of rehab including a new kitchen, bath and refinished hardwood floors. After completing the rehab, I moved into the upper 1 bedroom unit and posted the lower unit on Zillow, hotpads, etc. I was surprised to get many hits on my posts within the first day at $925 a month (almost 1% rule with only 1 of the units rented)! With my PITI totaling $720 and managing the property myself, I am comfortably getting paid to live! Within a few months, I plan to move out and rent the upper unit and get another small multi with an OO loan once I hit the 12-month mark.
Once both units are rented and I pass it off to property management, here are what the stats will look like assuming 7% Capex, 7% vacancy, 10% PM, 5% repairs:
COC: 18%
Monthly Cash Flow: $300
ARV: $125000
Special thanks to BP User Bill Goodland for your coaching during the entire process. Also, to the BP team for the Michigan State-Specific LL forms.
@Bjorik Mutize @Vincent Harris I found it using the realtor.com. After I ran my analysis on the property, I noticed that one of the agents I had worked with in the past was the seller’s agent so I sent her a text and saw it the next day. I was able to get the property for $7000 under asking.
@Vincent Harris The power of the network! Luckily the seller was motivated to sell the house because her closing on her next property was pending the sale of the one I bought. Since I was in no rush to purchase the home, I gave her the number that worked based on my conservative analysis and waited for her to come to me!
This spring I purchased my first Duplex in Metro Detroit (Center Line) for 93k. After listening to the BP Podcasts for just over a year I finally jumped in at age 23 and bought a duplex with a 5% down owner occupied loan. I did about 12k worth of rehab including a new kitchen, bath and refinished hardwood floors. After completing the rehab, I moved into the upper 1 bedroom unit and posted the lower unit on Zillow, hotpads, etc. I was surprised to get many hits on my posts within the first day at $925 a month (almost 1% rule with only 1 of the units rented)! With my PITI totaling $720 and managing the property myself, I am comfortably getting paid to live! Within a few months, I plan to move out and rent the upper unit and get another small multi with an OO loan once I hit the 12-month mark.
Once both units are rented and I pass it off to property management, here are what the stats will look like assuming 7% Capex, 7% vacancy, 10% PM, 5% repairs:
COC: 18%
Monthly Cash Flow: $300
ARV: $125000
Special thanks to BP User Bill Goodland for your coaching during the entire process. Also, to the BP team for the Michigan State-Specific LL forms.
Might be tough to get a second mortgage. Your rental income must be aged two years for it to count, so when doing Debt Income ratios now, they count $100% of the debt and 0% of the revenue. Now if you purchased way under your maxvand you can find another home thats a duplex in a similar price-point keep rolling by all means
Congrats! I've had huge hits on my rentals in Detroit through Zillow. My last rental had 50 inquires! That was just through Zillow alone. Apartments.com generated a few qualified leads too.
Congrats @Jason Mazza! Have you been able to transition to the next phase of your plan yet, by renting out the additional unit, and adding another property?
I'm looking to start house hacking in Windsor, Ontario (I'm Canadian). I'm wondering what type of tenant rented your bedroom? (e.x. student.)
I'd love to invest in the Detroit area in the future and am interested to hear the local demand for bedroom rentals.
Cheers,
So far I've gotten one student and one couple who works locally. It seems like there is a ton of demand on facebook marketplace and zillow for affordable rentals.
Congrats @Jason Mazza! Have you been able to transition to the next phase of your plan yet, by renting out the additional unit, and adding another property?
Hey Luke,
Recently I moved to a different city and was able to rent out the other unit and get the property under management. I will be looking for another property in the New York City metro area soon!