All Forum Posts by: Douglass Benson

@Charles Dobens is the best.  We have worked with Charles and his wife Kate and their counsel is always spot on.  I run 81 units in Michigan, he and Kate are probably running thousands all over the universe, but they always seem to have time for me.  They are an amazing team and I am glad they are on my team!  

I love these kind of places.  The owner is typically begging to get out, the buildings are so tired and neglected that the minute you start sprucing it up, the entire world notices.  The picture of the studs inspired me.  Well done.  I can't wait to see how it all turns out.  

I have 81 units in Mid Michigan.  65 of them are heated by boiler and are in five different buildings.  All of them were built in the mid to late 1960's and they all have the original boilers.  The units  average in size from 650-900 square feet.  I have two units that are 1,750 square feet.  Regardless, all of them have new (5 years or newer) vinyl windows.  

My gas bills for the boilers for the last 12 months came to $21k.  You can do the math but it is probably something like 21000/65/12= $26.92 per month for heat per unit.  Round it up to $30 so your math is easier.

Be skeptical of anything that is for sale.  Do your own homework, look at other properties in the area and see if you trust what you are seeing.  It is easy to figure out average rent (www.rentometer.com) as a starting point and if you are a house flipper, it shouldn't be hard to estimate how much costs you will have bringing the building up to speed.  Ask a local commercial broker what multi-family properties are going for in the area and see how it compares to what you are looking at.

Ask yourself "Will good people want to live here?"  Don't ever kid yourself on the answer to that question and please don't ever forget that the answer to that question has NOTHING to do with how well you have fixed up the place, it has everything to do with the neighborhood the building is located in.

There is a ton of money to be made as a slumlord, but I don't know how to do that so I can only advise you on how I would approach it making money my way.

Marc C - I too am a buy and hold rental investor and am kind of laughing at your comment.  If a guy told you that you weren't ready to invest in multi-family because you didn't know what RUBS was, should that stop you from moving forward?  

Please don't take any offense but I have run across too many people still reading books and taking classes who aren't in the game because there is another book just printed and another class just starting in 30 minutes...

I hope all is well for you in New Mexico and I sincerely mean that!  Take care.

Bryan, there is facebook group called the Renegade Detroit Investors Real Estate Club.  This group is composed of contractors, investors, money lenders, etc. etc., and they are all busy.  The group is run by Jeremy Burgess and my guess is that they would have contacts that would be greatly interested in your help!

Option 3.  Stay away from having the prior owner do anything on your behalf.  They aren't your partner and I don't think you want them to be.  Take ownership of the property and on that day, give the dope smokers a 30 day notice (or 15 day or whatever the law stipulates).  That also prevents you from having to be involved with any issues, legal or otherwise that may already exist between the current owner and the dope smokers.

There is nothing strategic going on here, just putting yourself in the best position to get what you want.

If you ever do decide to borrow money for the purposes of investing, the existence of credit card debt may get in the way.  Lenders take a dim view of unpaid credit card debt.  Some believe that it shows a lack of fiscal discipline.

I would make it go away first.  Business debt is much more tolerated than consumer debt.

We have turned 25 of the last 37 units we purchased in 15 months.  Highest rent used to be $575, now the lowest rent is $625.  Recent units go for $690 and we are FULL. Kick all the bad guys to the curb as quick as you can.  Be aggressive and the good guys will see that you mean it and start to sign leases.  It doesn't matter where you live, people like being a part of something good. 

If you have ever been exposed to theology, you understand what Heaven is.  Michigan is a lot like that.