Choosing my Next Deal

After looking around for a couple months, I had narrowed my choices in Ypsilanti to a couple multi-family homes. My decisions were between a house with great cash flow (CF) or greater appreciation. I ended up going with a triplex in a fairly stable neighborhood.

I was attracted to the fact that it had two long term tenants occupying two of the three units and the third had good tenants that did not plan to stay once their lease was up. With two long term tenants, my expenses would be covered and I would have some CF each month. Another factor I noticed about this home compared to the others, was that at least one of the tenants cared enough to go above and beyond to maintain the property. This gentleman was not asked but volunteered his own time to maintain the yard and enforce safety. For example, there was at one time vehicles that would hide out in the parking area and either leave their vehicles or conduct nefarious activities. This tenant would go out of his way to contact the police when appropriate. The best part is that he is doing all this for free and expects nothing in return. In contrast, the other possible house was at odds with their absent landlord.

I still took some time before making an offer on the triplex. The house had been on the market for nearly six months at this point. For whatever reason, no one else thought of making an offer. This worried me. However, the numbers associated never looked bad. Even though the house was not worth as much as my home in California, it was at least a 1% return on investment each month. That was something I did not have in California and a big reason why I wanted to sell that property and try to find something else.

The house was listed at $159,000. I offered $145,000 and received a counter at $150,000. The seller was motivated because of her age but knew what her home was worth. She wasn’t going to budge on that $150,000 offer. I expected to spend this and decided not to fight her.  The photo below is of the triplex at purchase.