All Forum Posts by: Geof Greeneisen

@Joe Fornasiero right now everything seems over valued, even the 4 unit and 10 unit buildings on Grand River that recently sold, I felt were way over priced. But people are buying?! Let us know how your mail campaign turns out.

Does the street name start with an O? I only ask because I'd like to have some on that street. I haven't really had much luck with the direct mail approach, but I keep trying. Try different messages and expect to make contact at least 7 times. Duplex numbers have gotten pretty crazy in our market.

Hi @Michael Candela, welcome to BP!

I see owning rentals in a college town like any other business model, you need to understand it and become good at it.

Students move in and out in a 2-3 week timeframe, putting a lot of pressure on turning units in a short period of time. On average you're moving in sophomores or juniors so you've got tenants for maybe 2-3 years which equals more turnover. Units are usually located in downtowns which have higher mileage rate. Ann Arbor can be as high as 63 Mils, East Lansing as high as 69 Mils, the city of Ypsilanti as high as 82 Mils. Those are high tax rates!

Yes, upside is; you have strong occupancy demand (lately we've had strong demand in all rental markets), you're able to rent per room, increasing rent potential. Downside is; higher carry cost, typically higher acquisition cost, and a shorter occupancy period.

I think it's like any other business: get into it, understand it, then make money doing it. 

Hi @Vicki K., In Michigan, so long as you leave an inventory check list and it states it must be Returned to Landlord within 7 days of occupancy, if not returned the unit is considered in good condition without issues.

That being said, carpet usually doesn't last longer than 3-4 years for our rentals and we will replace. I think carpet has a maximum life expectancy of 5 years. You are certainly able to justify an expectation of getting 5 years if you only to got 3 out of it. Whether a judge will buy your argument is a different story.

Did you know they had 3 dogs upon move-in? Or was this found out after the fact? That will be brought up in front of the court. Obviously 3 dogs will put more wear an tear on carpet than a tenant without pets. If you moved them in knowing they had pets (which would be disclosed on their rental application) and you accepted them anyhow, then I suspect you won't get credit for the 2 year difference in life expectancy of the carpet.

We have tenants sign a separate form acknowledging they have received: a signed lease, 2 keys, lead based paint disclosure, Copy of "Protect your family from lead in your house" brochure, and 2 inventory checklists (to be returned within 7 days but usually filled out upon move-in).

I would send a refusal letter and require them to take you to court, especially if you are able to demonstrate you were light on your: cleaning charges, repainting expenses, door and cabinet repair, duct cleaning due to pet hair, etc.

Don't be too upset if you lose your carpet argument. Best of luck!

@Robert Farris good for you!

I used to hit the Oakland County sales each week and had some luck back in 2010-2013 when they were going through 300+ foreclosures per week but haven't gone for a year or so. I found they were discounting the notes at the sale far less than in years past for obvious reasons.

Hi @Robert Farris welcome to BP!

I've found the annual Tax Sale Auctions have become too competitive in the last couple of years, some prices above what can be purchased on the open market.

Congrats on getting your first note at the sheriff sale. What area was your acquisition and have you gotten through the redemption period yet?

Best of luck!

Hi @Joe 

@Joe Fornasiero I think Dearborn Heights probably has some good properties to look at but why overlook Brighton and Howell if that is your backyard? There are still good deals to be had there and being local has a definite advantage from a management perspective if buy and hold is your strategy.

Hi @Ashley Hamilton, welcome to BP!

Do you own properties in Hazel Park? How do you see that market?

hi @Bryan Blancke welcome to BP!

I like the areas you've identified. I have houses in Royal Oak, Ferndale and Hazel Park. I started buying in 2010 and have been happy with the results as well as the tenants moving into the area. I originally planned to diversify, buying in: 

Royal Oak for ok cash flow but anticipated appreciation, 

Hazel Park for great cash flow but no anticipated appreciation,

Ferndale as a solid market in between.

They have all performed well with excellent cash flow and excellent appreciation. Anytime I have a vacancy I get 30-40 inquiries and have gotten great tenants as a result. I think if I were starting out acquiring now, I would lean towards Hazel Park simply because assessments are lower than Ferndale which in turn provides better cash flow and return on a lower all-in investment. 

Best of luck to you!

hi @Justin Sadauskas, I've had 2 tenants involved with medical marijuana. The first rented a house I had then later, unbeknown to me got his care givers license and began growing in the house. I'm not a lawyer, however as I understand the current laws it is legal to grow up to 3 plants per person, with a total maximum of 30 plants under a caregivers license. They must have a deadbolt lock on the grow room door and post the license on the door. I ended up evicting the tenant due to other reasons, but growing is legal. Marijuana leaves a very strong smell in the house. He was growing in the basement, then on the first floor in one of the bedrooms. The house wreaked of pot. I had to have the ductwork cleaned everything repainted and the house scrubbed top to bottom. 

On the positive side, if your getting 1 1/2 times market rent, they won't move out on you so it could be lucrative for you. I would designate upfront your grow area due to electrical and watering needs so you're not dealing with flooding issues in a second floor bedroom.

We have another tenant in one of our office buildings in Howell, MI for a medical marijuana dispensary & doctor/patient visitation office. The laws for this use are not set in stone at the state level in Michigan but do provide the local municipality the ability to mandate with local ordinances. Howell won't vote on this for another 6 months but, to save the location, they have been paying 1 1/2 times market rent for the last year and haven't ever occupied the space.