All Forum Posts by: Gabe Lopez

Hi @Jeff S.,

You definitely need a broker involved.  In Michigan, a real estate license is required for anyone who "leases or offers or rents or offers for rent real estate or the improvements on the real estate for others, as a whole or partial vocation; who engages in property management as a whole or partial vocation;" (http://legislature.mi.gov/doc.aspx?mcl-339-2501).

So, to be a property manager, you must be a broker or a licensed salesperson working under a broker.  An unlicensed person could interact with tenants after a property has been leased (i.e to collect rent, perform maintenance, etc.), but they cannot negotiate a lease or sign it.

Regarding what separates a good from bad property management company, @Account Closed is definitely correct.  I think that providing excellent service to your tenants is one of the best things you can do for your owners.  Tenant turn-over is very expensive.  Good communication with owners also goes a long way.

I know that one of the things that concerns owners new to property management the most is the leasing fee.  It is a conflict of interest - the more tenant turn-over there is, the more money the management company makes.  Finding ways to help mitigate this concern is something that I think is important to think about and address. 

If you have any more detailed questions, let me know and I can run them by the broker who owns the property management company I work for.

Hi @Michael Danke,

I have the same goal that you mentioned in you profile of living a job optional life.  So far so good.  I've been able create enough passive rental income to allow my wife to quit working and be a stay at home mom.  I hope to do the same for myself in the near future.   Any questions, definitely let me know!

Hi Mike & Welcome, 

Landlording on AutoPilot is high on my must read list.  Any plans for more Seminar at Sea Cruises?  I love real estate and I love cruises.  Combining them sounds like a lot of fun!

Hi @Kristian Vassilev & welcome.

There are plenty of people on the here that can help you navigate and learn how the US real estate market works. I see in your profile you are curious about ROI's in different areas.

In my area (Lansing, Michigan) ROI's are in the neighborhood of 11.9% to 14.6% looking at 7 properties currently on the market.  
CCR for those same properties (assuming 6% interest, 25% down, 20 year term and paying cash for the initial rehab costs) is 15.2% to 24.0%.

That's taking into account management fees, vacancy rates, cap ex, maintenance, taxes, insurance and closing costs.

Hi Cory,

Your intro from your profile is similar to how I got started.  I bought a 3 unit building in Lansing when I was 21 and rehabbed it myself.  Sold it 4 years later for a very nice profit.  I then got distracted with my full time job and didn't do very much with real estate for the next 8 years.  

In the last 6 or so years, I've been trying to expand my portfolio of properties as quickly as possible and retire from my full time job.  I've definitely made some mistakes a long the way and also learned a lot, but always have more to learn.  

Let me know if I can be of any help!  

@Josh Cunningham is right on regarding the location of the property.  There is a good amount of sub $35K properties in my area with great potential cash flow, but if you're looking for the same thing 65 miles away in Ann Arbor, it's going to be much tougher to find.

In general though, I've done quite well with sub $30K properties and some less than $20K.  

Hi @Jeremy Scherer, I'd love to hear how your first Grand Rapids rental works out.  I've only invested in the Lansing area, but I've been curious to see what might be available in Grand Rapids as well.

Welcome @Patrick Allen.  Working smarter and making your money work for you rather than you for it is definitely the way to go! 

Hi Ben,

Nice to see another member from Michigan!  I'm not too familiar with the Ann Arbor market, but it was ranked #9 of the top 20 hottest real estate markets in May of this year by Realtor.com.  Best of luck!

Hi @Shantana Goerge,

What @Josh Nix said is right on.  I'm on the same path he is on and my wife recently quit her job to be a stay at home mom.  We couldn't have done that without the income from our rental properties.  

There is a very big difference between traditional debt (credit card debt, car loans, boat loans, etc.) and investing in real estate.  When you're done paying off traditional debt, you have less money than you started with and an asset worth less than what you paid for it.

With a rental property, the property will pay its debt off for you, give you a monthly income, and increase in value.  Another way to look at debt on a rental property is its kind of like profit sharing with the bank.  They are basically partnering with you to invest in the property and in return you share some of your profits with them.

I'm here in Lansing & happy to help in any way I can.  If you'd like to follow along with me on the next property I purchase and see how a real world example plays out, just let me know!