All Forum Posts by: Leroy K. Williams

With all of the technology at our fingertips why would anyone have to physically walk through a property?  As an investor the number one thing you need is a competent person in the area who wants to help you succeed.  You find the person who understands what your goals are and then allow their eyes to become your own. Astronomers and Astrophysicists don't have to fly into outer space to understand the planets and stars billions of light years away, surely you can get a good picture of what is happening a few hundred miles away.  

Go visit the local Lumber yard ask for referrals for guys who will work there. If you don't have running water place a porta potty on site.

Pay laborers 1/2 of what you owe them and promise to give the remainder at the end of each week, this way they are motivated enough to show up and even more motivated to keep showing up. 

As it relates to the quotes, ask guys to bid based on videos and photos, if they are good they can do this with no problem. 

Hi Anh,

Detroit is in a state of development flux, things are changing fast and very intentionally.  Many of the neighborhoods you mentioned are right in the path of development progress which means there is a lot of new investment aimed there.  I would say the top 5 of those you mentioned are 1. University District (6 mile/ Livernois corridor), 2. Jefferson/ Chalmers 3. East English Village (I would include West Village in this) 4. Aviation Sub (not too many duplexes in this neighborhood however on the border there are but those border areas don't have the same charm or appeal 5. Island view

Because the entry cost in Detroit is so low I would say that it will feel very little effect in a housing recession when it comes to values. I believe that the development drive will keep pressing values up. 

Quote from @Michael FungHi Leroy, where would one start looking for a PM?

I would start with the local REIA and ask other investors who they use to manage their rehabs. I would also use sites like Thumbtack and search for Property Managers who coordinate renovations for clients.

If your only issue is finding a contractor I would suggest changing your approach from looking for a General Contractor to looking for an experienced Project Manager or Construction Manager.  In truth GCs are not built for rehabbing.  Typically rehabbing requires tight budgets and if a GC is good he/she is already making money working for the general public that is willing to pay higher prices since Mr. and Mrs. Public typically renovate for comfort, enjoyability, convenience, or emergency.  They aren't thinking in terms of real estate investing strategies.  

If you find a PM you are replacing yourself and hiring your partner in the deal.  A good PM understands that the project has to stay within budget, they have to make their own money by bringing the project in ore below budget. Typically they will have established relationships with tradespeople outside of their own guys (unlike a big GC).  

You can have your cake in Detroit and eat it too.  You can purchase single family or duplex homes in the "hood" for $35-40k per door, Spend $25-35K rehabbing and collect a healthy rent of $1,100-$1,300 per month consistently.  As a person who owns property and services other OOS investors, I know because we are right here in the thick of it with boots on the ground watching this happen.  What about the head ache part?  That's called the effect of "Greed".  Most investors who invest in the hood decide to penny pinch, the idea always seems to be "buy  low, re-invest as little as possible, and hope to place the best of the bad apple tenants".  I look at it like a person investing while pinning their nose due to the stench of the inner city.  This approach doesn't work.

What works is deciding if you truly want long term ROI or not. If you want healthy cash flow (from inner city properties) invest into the properties with the idea of improving the community. Once you purchase and renovate a home introduce yourself to the block club and advise them of your intent to make an impact. Find a management team who understands that being a "PM" in the inner city is just as much about being a "Property" manager as being a "People" manager. The tenants want to pay but sometimes money is short and there is nothing wrong with the PM directing tenants to government resources for just such occasions. Overpay-(Yes I said it) OVERPAY your contractors by 10-15%. Let them know that you are willing to do this to ensure great service and a quality product. This will create loyalty on an epic scale.

Last thing, forget the classical causation for appreciation and think about this, if you can buy several properties in one community/neighborhood and restore them and place families in them, by creating the right kind of density in the neighborhood, the value right around your homes will rise. 

Quote from @V.G Jason:

Quote from @Leroy K. Williams:

Quote from @V.G Jason:

Quote from @Leroy K. Williams:

Have you considered Detroit MI?  

It may seem counterintuitive because some think of Detroit from a decade or two ago however we are a City on the move. Detroit was recently named one of the top 10 places to travel. That's pretty significant. Where else can you find a City emerging into greatness where you can still buy SFH for $30k, renovate for $35K and easily collect $1,200-$1,300 a month in rent?

This isn't theoretical but a real thing happening in the Motor City.  I can prove it.  

Detroit Named Top 10 Place to Travel in 2023 by Travel Lemming | VisitDetroit.co

 What are your thoughts on the shrinking population? Is that stat too much of an aggregate and needs to be investigated further?

And define greatness, I've heard the hype about Detroit since the recession. It was suppose to be one of the cities these big companies were supposed to build out post 2008 recession, but no momentum carried forward. I have my reservations but am awfully curious.

 Great questions, Detroit has experienced a loss in population however recent studies have shown that the rate of shrinkage is levelling off due largely to the anticipation of the City's rebound. Many of those who left during the last 2 decades are black residents who moved outside of the city limits to find safer neighborhoods and better schools.  Now as the City is trending upward residents are seeing property values spike in neighborhoods along what is called the "Path of Progress" meaning neighborhoods which border planned developments.  New Greenways, shopping districts, Food Hubs, and state of the art  commercial and retail facilities are under construction and this boom has spilled over as a rise in property values and demand for housing from newly arriving professionals who have chosen to live and experience the rebirth of a great American city in real time.  

Quietly urban planners and National Foundations have lusted after Detroit for years.  The City represents a blank canvass on which to re-imagine a Future City in America. The U.S.A has found itself playing architectural and urban design catch up to newly emerging cities abroad however Detroit is poised to not only represent its own renewal but the renewal of what an American City can be.  Remember this is an international crossing. How many other Major US cities can say that? 

I've heard this  new era for Detroit since the last recession. Nothing really materialized.  For a blank canvas to be successful, big industries have to come in. What kind of institutional power is coming there? I feel it's void of that as of right now. GM's tanking has not helped the case. 

I think the big industry for Detroit will be technology and innovation mostly automobile related however I see that spreading into other industries as well. That said there is another element to how that works. Most of the time people think of talented employees flowing toward good paying jobs, well now great companies are looking to locate where there are pools of talented  workers, and in today's world pools of talented people, (typically the younger more energetic urbanite/hipster crowds) choose places to live based on "Cool" factor as much as any thing else.  If a city can attract talent the industry follows.  People want to "Live, work, play" and the city with the most amenities wins.  

Quote from @V.G Jason:

Quote from @Leroy K. Williams:

Have you considered Detroit MI?  

It may seem counterintuitive because some think of Detroit from a decade or two ago however we are a City on the move. Detroit was recently named one of the top 10 places to travel. That's pretty significant. Where else can you find a City emerging into greatness where you can still buy SFH for $30k, renovate for $35K and easily collect $1,200-$1,300 a month in rent?

This isn't theoretical but a real thing happening in the Motor City.  I can prove it.  

Detroit Named Top 10 Place to Travel in 2023 by Travel Lemming | VisitDetroit.co

 What are your thoughts on the shrinking population? Is that stat too much of an aggregate and needs to be investigated further?

And define greatness, I've heard the hype about Detroit since the recession. It was suppose to be one of the cities these big companies were supposed to build out post 2008 recession, but no momentum carried forward. I have my reservations but am awfully curious.

 Great questions, Detroit has experienced a loss in population however recent studies have shown that the rate of shrinkage is levelling off due largely to the anticipation of the City's rebound. Many of those who left during the last 2 decades are black residents who moved outside of the city limits to find safer neighborhoods and better schools.  Now as the City is trending upward residents are seeing property values spike in neighborhoods along what is called the "Path of Progress" meaning neighborhoods which border planned developments.  New Greenways, shopping districts, Food Hubs, and state of the art  commercial and retail facilities are under construction and this boom has spilled over as a rise in property values and demand for housing from newly arriving professionals who have chosen to live and experience the rebirth of a great American city in real time.  

Quietly urban planners and National Foundations have lusted after Detroit for years.  The City represents a blank canvass on which to re-imagine a Future City in America. The U.S.A has found itself playing architectural and urban design catch up to newly emerging cities abroad however Detroit is poised to not only represent its own renewal but the renewal of what an American City can be.  Remember this is an international crossing. How many other Major US cities can say that? 

Have you considered Detroit MI?  

It may seem counterintuitive because some think of Detroit from a decade or two ago however we are a City on the move. Detroit was recently named one of the top 10 places to travel. That's pretty significant. Where else can you find a City emerging into greatness where you can still buy SFH for $30k, renovate for $35K and easily collect $1,200-$1,300 a month in rent?

This isn't theoretical but a real thing happening in the Motor City.  I can prove it.  

Detroit Named Top 10 Place to Travel in 2023 by Travel Lemming | VisitDetroit.co

Quote from @Leo R.:

Question for everyone:  how common is it for an investor to hire an OOS PM to "coordinate a rehab"?

If anyone else has experience with this, I'd be interested to learn about your experience.

It is very common as a matter of fact its what we specialize in.  In truth a good PM should be a replacement for yourself as it relates to all areas of establishing the cash flow of a rental property.  Technically speaking they have a 9-10% gross per annum position on your property so they should function like an owner. 

Coordinating the rehab is also a good idea since it allows the PM to oversee the quality and ensure that problems are solved during the reno phase and not translate over to the occupancy phase.  Lastly by the PM being involved it allows for an immediate transfer of the property from the contractor(s) so there is less time for the property to sit vacant. Most PM will begin marketing as the rehab closes out.