My Thoughts On Podcast 331. Detroit Rentals With Ashley Hamilton!

My Thoughts On Podcast 331. Detroit Rentals With Ashley Hamilton!

Real Estate Coach · Member since 2018 · 246 posts · 216 votes

I am from the Detroit metro area but I invest in Pontiac. The reason why I invest in Pontiac over Detroit and Flint is because the rent margins are simply not high enough for what you are paying for and putting time in. As well as the equity upside.

On the podcast Ashley describes what the appraised value of her 10 properties were, which was 469K total. She stated her all in cost were roughly "20K" per property. So even though she purchased many of the single family's at roughly 2500+- dollars or practically nothing. She still had to use her time and money to repair everything. Not including each unit was roughly worth 40K in the end which is not much.

This is a good example of how the value of the property can be a big determinant of how your rental business will scale in the future. Especially for people who are relying on equity value to grow. When I bought my second rental property is when I realized that, so I started aiming for properties that had alot of equity upside, which worked out very well. I think that Ashley did well in the short term because she was able to generate some cash flow. But I feel that she should have focused more on bigger markets with more equity upside alot earlier like maybe at her 3rd property instead of her 10th.

In my opinion this is just not worth it unless her focus was to remain as a small investor, which I don't think so because she mentioned about scaling up to 30+ rentals. My advice to Ashley would be to spread your horizon and look into bigger markets other than areas like 8 Mile Detroit. Atleast Downtown Detroit where the rent margins and equity upside is high or even has potential to be high. 

Imagine if 1 of her rentals had 100K in equity vs 40K. That would be a better situation. If not than explain how ?

@Ashley Hamilton

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Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
7y

And also, I'm not doing it to have the biggest portfolio appraisal I'm doing it for the cash flow which is over $9,000 a month passive income. So yes  maybe the  portfolio isn't worth much but  how many people can say they're making $9,000 a month when they were making $20,000  a year  a couple years ago.

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  • Keyonte SummersPro Member
    Harper Woods, MI · Member since 2017 · 384 posts · 311 votes
    7y

    @Darius Kellar I feel you are wrong. We all have a starting point and even though I havent myself bought any properties that low its still a consideration. Detroit is such a unique market if you dont get it you just dont get it. I think its wrong to bash someone investment stategy just because it doesn't work for YOU. It's just different strokes for different folks. I think what she is doing is admirable and Detroit need more landlords that are managing these properties properly. If there were more owners maintaining there properties instead of abandoning them the properties wouldnt be valued so low and tenants would respect them more and neighborhoods would be better. What she doesnt have in equity she has in cash-flow, she doesnt have loan paydown and she doesnt have to worry about anyone calling her note. Think she doesn't have as money barriers as many people that fiance might have and she could still obtain a loan that shows minimum liablility because these are free and clear.

    @Ashley Hamilton

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y

    Wow  thanks for your opinion but that's really only your opinion, it's good to see that we support each other here in Detroit .  But all your assumptions about me is wrong and my investment strategies.  Everybody have their own  strategies  and techniques but one Shouldn't Judge another person or assumed  another person strategy isn't  sufficient.  I'm doing really well actually better than most so I think I'll continue to follow my own advice.

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y
    Thanks, can you believe that the one person that was speaking negatively is someone from Detroit. But thank you so much for sticking up to me and mentioning the facts. He clearly did not listen to my whole episode because he would have known and getting a whole bunch of loans is not the way to go because that's what happened in the first market crash. My investment strategy is to set myself up where I can never lose. Thanks again for the support

    Originally posted by @Keyonte Summers:

    @Darius Kellar I feel you are wrong. We all have a starting point and even though I havent myself bought any properties that low its still a consideration. Detroit is such a unique market if you dont get it you just dont get it. I think its wrong to bash someone investment stategy just because it doesn't work for YOU. It's just different strokes for different folks. I think what she is doing is admirable and Detroit need more landlords that are managing these properties properly. If there were more owners maintaining there properties instead of abandoning them the properties wouldnt be valued so low and tenants would respect them more and neighborhoods would be better. What she doesnt have in equity she has in cash-flow, she doesnt have loan paydown and she doesnt have to worry about anyone calling her note. Think she doesn't have as money barriers as many people that fiance might have and she could still obtain a loan that shows minimum liablility because these are free and clear.

    @Ashley Hamilton

  • Member since 2019 · 52 posts · 123 votes
    7y

    @Darius Kellar My question to you is should she have focused on growth instead of cheap rentals. You have to understand or listen to what she said. She came from poverty and she was only making $22k a year. If you don't know and no one has ever taught you about owning real estate. You must first start where you understand. I know to seasoned investors 10 houses valued at 469k isn't a lot but when you come from nothing or very little that is worth millions. Also she had to start where she understood and master it. I know we all want to think BIG and grow RICH. But sometimes we have to be able to manage a dollar before we can manage a million. Also owning 10 properties and managing 35 additional properties isn't a small feat. To me that is a very big deal because she's building her business on a solid foundation. With that foundation she can potentially put her plan into over drive and go for higher equity and higher rents in the near future. We should never despise small beginnings.

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y
    Thank you, but what people don't understand is there's more about me than what was said on the show. I'm already weeks away from closing the deal that will have my portfolio valued at over $1million  and by the end of the year my profolio will be at between two or three million dollars. I was just trying to be inspirational but nobody can comment on my plans,  he clearly did not listen to my podcast.
    Originally posted by @Account Closed:

    @Darius Kellar My question to you is should she have focused on growth instead of cheap rentals. You have to understand or listen to what she said. She came from poverty and she was only making $22k a year. If you don't know and no one has ever taught you about owning real estate. You must first start where you understand. I know to seasoned investors 10 houses valued at 469k isn't a lot but when you come from nothing or very little that is worth millions. Also she had to start where she understood and master it. I know we all want to think BIG and grow RICH. But sometimes we have to be able to manage a dollar before we can manage a million. Also owning 10 properties and managing 35 additional properties isn't a small feat. To me that is a very big deal because she's building her business on a solid foundation. With that foundation she can potentially put her plan into over drive and go for higher equity and higher rents in the near future. We should never despise small beginnings.

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y

    And also, I'm not doing it to have the biggest portfolio appraisal I'm doing it for the cash flow which is over $9,000 a month passive income. So yes  maybe the  portfolio isn't worth much but  how many people can say they're making $9,000 a month when they were making $20,000  a year  a couple years ago.

  • Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Ashley Hamilton:

    Wow  thanks for your opinion but that's really only your opinion, it's good to see that we support each other here in Detroit .  But all your assumptions about me is wrong and my investment strategies.  Everybody have their own  strategies  and techniques but one Shouldn't Judge another person or assumed  another person strategy isn't  sufficient.  I'm doing really well actually better than most so I think I'll continue to follow my own advice.

    As they say Ashley.......

    Opinions are like belly buttons everyone’s got one

    I listened to your podcast.... well done on great success

    I also purchaser 10 properties in Detroit, love what I am seeing and the cashflow

  • Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Ashley Hamilton what you have here is a once in a lifetime opportunity that you have jumped on. Things are great for you so be careful. If you stay free and clear you can not lose. If you start mortgaging your existing properties to buy more you can have problems when the economy softens. You have cash flow just keep reinvesting it and lay low on the loans. The biggest apartment owner in my city of Portland said never borrow on one to buy another. In other words keep your free and clear ones free and clear IMO.

  • Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    I saw @Darius Kellar's post immediately after he published it but had to take time before replying before I said something too inappropriate.

    Let's do the math here. @Ashley Hamilton came from poverty. Most people on these forums can't even comprehend what that's like (myself included). She now has a portfolio worth $469,000 that she owns free and clear. Most people on these forums (myself included) can't claim the same. Traveling that spectrum is simply incredible and downright inspiring. The simple fact that you would take shots at that, Darius, is ignorant at best. Not a good look.

    Continuing with the math... Ashley's properties generate ~$9,000 in gross rental income. If she only keeps half of that she's generating a net income of $54,000/year which is just shy of the US median income. And get this, she's probably keeping most of it because she gets to write off depreciation on all her properties.

    So we have a young woman who came from literal poverty now making a median income that's more valuable than the normal "median income" (because she's keeping more after tax). She answers to nobody, loves what she does, and is growing her portfolio every day. Her properties represent a net worth that is more than 4.5 times larger than the median US household net worth. This woman is killing it by any measure.

    But you, Darius, state it's "not worth it". You know what's not worth it IMO? Spending 5+ years in school to become a CAD administrator working for Mitsubishi and earnings $50k/year. I can understand why you may be bitter. That's an awful lot of time, effort, and money to spend working in a job you likely dread going to every day. But that's no reason to attempt to belittle another's success. 

    Ashley should be heralded as a model landlord, an inspiration to entrepreneurs, low-income children, and women in general. 

    Hiding behind a keyboard and attempting to belittle someone's approach to becoming an incredible success does not make you cool. It's getting you attention; perhaps that's what you crave. But you definitely don't have anyone's respect, and I'm positive you haven't even tasted the kind of success that Ashley has built for herself. 

    Please go troll somewhere else.

  • Member since 2019 · 52 posts · 123 votes
    7y

    @Ashley Hamilton Keep making the moves you are making. Any time there is criticism means you are doing something right. More power to you. Success on top of Success.   

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y
    Thanks so much Travis,  I really appreciate that,  I wanted to say more and touch on all the point you did, but I I think I would have been able to put it as well as you. I definitely believe he wants the attention.
    Originally posted by @Travis Biziorek:

    I saw @Darius Kellar's post immediately after he published it but had to take time before replying before I said something too inappropriate.

    Let's do the math here. @Ashley Hamilton came from poverty. Most people on these forums can't even comprehend what that's like (myself included). She now has a portfolio worth $469,000 that she owns free and clear. Most people on these forums (myself included) can't claim the same. Traveling that spectrum is simply incredible and downright inspiring. The simple fact that you would take shots at that, Darius, is ignorant at best. Not a good look.

    Continuing with the math... Ashley's properties generate ~$9,000 in gross rental income. If she only keeps half of that she's generating a net income of $54,000/year which is just shy of the US median income. And get this, she's probably keeping most of it because she gets to write off depreciation on all her properties.

    So we have a young woman who came from literal poverty now making a median income that's more valuable than the normal "median income" (because she's keeping more after tax). She answers to nobody, loves what she does, and is growing her portfolio every day. Her properties represent a net worth that is more than 4.5 times larger than the median US household net worth. This woman is killing it by any measure.

    But you, Darius, state it's "not worth it". You know what's not worth it IMO? Spending 5+ years in school to become a CAD administrator working for Mitsubishi and earnings $50k/year. I can understand why you may be bitter. That's an awful lot of time, effort, and money to spend working in a job you likely dread going to every day. But that's no reason to attempt to belittle another's success. 

    Ashley should be heralded as a model landlord, an inspiration to entrepreneurs, low-income children, and women in general. 

    Hiding behind a keyboard and attempting to belittle someone's approach to becoming an incredible success does not make you cool. It's getting you attention; perhaps that's what you crave. But you definitely don't have anyone's respect, and I'm positive you haven't even tasted the kind of success that Ashley has built for herself. 

    Please go troll somewhere else.

  • Rental Property Investor · Altamonte Springs, FL · Member since 2018 · 185 posts · 97 votes
    7y

    @Ashley Hamilton

    Girl you are my inspiration!! I have been planing on investing in Detroit for a while now, but after watching your interview, I said I’m just gonna move there. I listed my house for sale yesterday and the soonest it sells I’m moving there. Should be in Detroit the first week of September, I would love to connect with you and maybe you can be my mentor. I admire your success. You accomplished so much coming from poverty and that right there takes courage and determination. And for that I applaud you. This ignorant person who has so much to say about your investing strategy obviously doesn’t understand that not everybody has hundreds of thousands to invest and you made it work with almost nothing. To me and I’m pretty sure that to a lot other people here on the BP you are a role model.

  • Austin, TX · Member since 2019 · 35 posts · 18 votes
    7y

    @Travis Biziorek beautifully put, and most definitely accurate

  • Specialist · Member since 2018 · 124 posts · 64 votes
    7y

    @Darius Kellar nothing is wrong with having a difference of opinion but there is something wrong with stating an inaccurate POV and trying to publicly humiliate someone.

    Maybe instead of trying to bash @Ashley Hamilton you would have received a better response by coming from a place of curiosity about her strategy.

    We have to do a better job in supporting one another and uplifting one another. We have to recognize when it’s time for praise and encouragement.

    Darius - I hope you let this sink in and I wish you nothing but success. God bless.

  • Real Estate Broker · Chicago, IL · Member since 2016 · 54 posts · 51 votes
    7y

    @Jeff S. Totally agree! Stay debt free!!! Haha I know you can potentially grow by refi repeat but she is starting with no debt! She crushes it!

  • Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Jeff S.:

    @Ashley Hamilton what you have here is a once in a lifetime opportunity that you have jumped on. Things are great for you so be careful. If you stay free and clear you can not lose. If you start mortgaging your existing properties to buy more you can have problems when the economy softens. You have cash flow just keep reinvesting it and lay low on the loans. The biggest apartment owner in my city of Portland said never borrow on one to buy another. In other words keep your free and clear ones free and clear IMO.

     Totally agree with your view on debt

    My purchases have all been cash buys

    But to be perfectly honest you need to be a cash buyer in Detroit market as there is too much competition for the good  deals

    More important in Detroit market is getting your assets stabilised snd performing 

  • Member since 2019 · 17 posts · 16 votes
    7y

    Great podcast, I love her tenacity, investment strategy (not for everyone or every situation but provides excellent cash-flow, which is what I'm after right now) and I especially love her property management ethic, which serves both tenant and landlord well. Closing on a Detroit property in a few days and looking for a manager - PM me if you're interested @AshleyHamilton 

  • Real Estate Coach · Member since 2018 · 246 posts · 216 votes
    7y

    I understand that your original goal was to just generate cashflow. However, Between the 40:15 to 40:30 point in the podcast you stated "this time next year you will have over 2 million in real estate. Because you are working with banks to Cashout Refinance for bigger and better deals like multi family units." With that being said, my previous response in a nutshell was only referring to making that move earlier in the timeline because of the fact the market was rising and to save on time, no pun intended @Ashley Hamilton. And because I was listening closely, at a turning point in the time line you referenced to purchase multiple units at the same time which means you had the boat going long before you got to the 10th unit.

    I have experienced a similar situation from being a night janitor for nearly a decade while investing in cheap real estate. In which I talk about and blog on what not to do because the time passed up is not worth it. Elaborating more, I was a banker at quicken loans for a short time and a investor now for 5 years. Doing cash out refi's on properties that only appraise for 40K will cost roughly 4K each (10% of the loan), which you can get a bigger bang for your buck by cash out refinancing higher value properties.

    For anyone who is looking for 1k properties there are still opportunities like that now. There is just better markets to do it in so that you get paid more for your time. Here is an example of a 3K purchase property that was sold for 93K just last week. And there are definitely better deals than this in the Detroit metro area. https://www.zillow.com/homedetails/14-S-Jessie-St-Pontiac-MI-48342/24410481_zpid/

    @Keyonte Summers

    @Keyonte Summers

    @Account Closed

  • Rental Property Investor · Depends on where my employer sends me · Member since 2018 · 171 posts · 142 votes
    7y

    All,

    Darius is entitled to his opinions on Ashley’s strategy because the numbers don’t work for him. He’s not right or wrong, the strategy doesn’t work for him.

    With that being said, there is reason that Ashley was a guest on the podcast. I’m sure that BP in inundated with request by aspiring investors looking for more potential exposure by the folks at BP determined that Ashley’s strategy was something that a greater number of people should hear. Personally her strategy is not a good fit for me, but I would never write some her teaching points, just as I would never write Darius or anyone else who is proving insights that will aid me towards financial independence.

    Keep up the good work Ashley and Darius and I wish you good fortune in your journey.

    Wes

  • Lender · Collinsville, IL · Member since 2019 · 32 posts · 13 votes
    7y

    @Travis Biziorek well said! "...we have a young woman who came from literal poverty now making a median income that's more valuable than the normal "median income"..." 

    @Ashley Hamilton you're an inspiration. I listened to your podcast and I can hands down say that it was my favourite so far.  You really are brilliant and you have kicked me into action :) Keep it up! 

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y

    This is my  last response because at this point I feel like it's just a grab for attention. Darius is not fit to write a multiple paragraph opinion about my investment strategy because he has never been on the show, or personally talked to me about it.  That show is edited and some things are not included. However he could personally asked me MY investment strategy which really wouldn't matter because that's MY investmenting strategy. I could have started from day one and have a million-dollar portfolio if I wanted to but keyword I did not want to, I prefer not to be in massive amounts of DEBT, I prefer not to live above my means, I prefer not to have to answer to anyone and control my own life,  I prefer not to work for anyone else, I prefer not to depend on bankruptcy to bail me out and take responsibility for any debt that I do occur, I prefer not to try to get the most attention because how big my profolio is  versus doing  smart investment which is not getting in massive amounts of death just so I can sound appealing on a podcast.

    It's easy to get into debt, it's not easy to build a portfolio worth over a half a million dollars from scratch with no help from Banks or family, and help and give back to your community at the same time while providing Financial Freedom. 

    So I'm sure the easy way out is a lot of people strategy, but not mine. Lastly who knows what my profolio will be worth, some of my houses will appreciate for more than $100,000 in equity because everyday the market changes in Detroit. However, what we do know for sure is that I will never have to file bankruptcy or be foreclosed on. Other investors who have massive amount of debt on their properties and the market can crash at any moment and then the house will be worth less than they owe on it and we're back in 2009 again. So my strategy is recession-proof, no failure, no way to lose. While other strategies maybe take a risk and depend on equity.

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y
    Thank you for your comment, but again I shall say how can anyone form an opinion without all the facts. We had a theme for the show and I did not go into all of my other all of my strategies. This is the big thing about social media these days everybody has an opinion without all the facts you can see someone walking down the street and assume that you're lonely but that doesn't mean they had don't have a family and kids at home. So in order for a pain to be valid someone should have to do the research or at least reach out to the person that they're forming an opinion about.

    Originally posted by @Wesley Whitehead:

    All,

    Darius is entitled to his opinions on Ashley’s strategy because the numbers don’t work for him. He’s not right or wrong, the strategy doesn’t work for him.

    With that being said, there is reason that Ashley was a guest on the podcast. I’m sure that BP in inundated with request by aspiring investors looking for more potential exposure by the folks at BP determined that Ashley’s strategy was something that a greater number of people should hear. Personally her strategy is not a good fit for me, but I would never write some her teaching points, just as I would never write Darius or anyone else who is proving insights that will aid me towards financial independence.

    Keep up the good work Ashley and Darius and I wish you good fortune in your journey.

    Wes

  • Keyonte SummersPro Member
    Harper Woods, MI · Member since 2017 · 384 posts · 311 votes
    7y

    We all have different strategies and she did what worked for her. Coming from the same past of being born into poverty and having so much debt throughout my life, I've learned thats not always the best route to go. Besides the recent debt from financing some homes i typically try to us cash when I can. If tenants are covering all her cost and no one call her note I think its worth it. I understand your point of view but just say it was a different way of doing it.  

  • Rental Property Investor · Detroit, MI · Member since 2015 · 82 posts · 548 votes
    7y

    Maybe I should have read his long, before I replied, where is the proof that the property was purchased for $3,000,  also how much was invested just because it was sold for $93,000 doesn't mean that was all profit,  also that person had a flip strategy in mind, versus me having a rental strategy in mind. I'm sure some of my properties will be worth $93,000 if I went in and remodel the whole thing and replaced it with granite countertops. But since I'm turning them into rentals  those things are not done.  Nobody's coming to invest in Pontiac  and if they do  that's fine but Detroit will always be  a great Market.

  • Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
    7y

    Cash flow. Appreciation. Both. Whatever. If you’re investing and the numbers work and you’re seeing the positive results you want then it shouldn’t really matter. I wouldn’t be banking on appreciation in Detroit or surrounding areas. EVERYONE, EVERYWHERE has been winning for going on 7 or 8 years now. That could all be gone tomorrow. I listened to the episode and as it stands she’s got fairly minimal capital invested, a portfolio worth almost half a million dollars and seems to be cash flowing a decent chunk of change each month. Could your numbers always be better? Could you have invested in the neighborhood two blocks over and seen a better return? Could you have a more scalable model? Yes to all those questions. But hindsight is 20/20. She’s doing good things.

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