All Forum Posts by: Drew Sygit

@Kristin Vegas NARPM standards highly recommend PMCs provide copies off ALL receipts to their clients.

Going to guess your PMC is a one-man operation or close to it. Going to also guess your PMC doesn't provide an online portal for you or your tenants.

So, your PMC doesn't appear to have the resources to scan and send you receipts - as they should.

As others have mentioned, check your Property Management Agreement/Contract.
- Going to take another guess that receipts are not covered. 

What's concerning is, what else is not covered?

Unfortunately, many owners don't even know what to look for!

Highly recommend you start getting sample contracts from other PMCs to evaluate what yours may be missing.

Then, you may be able to renegoatiate the contract with your current PMC - or move to a better one.

@Alyssa Abegg-Garcia Metro Detroit has many areas with Class A/B rentals under $300k.

DM us for more info - the BP Moderators will delete anything sales-like that we post on this thread:(

@Byoung Bae would NOT recommend an inexperienced investor try to DIY manage OOS anything other than a Class A rental.

The odds are against you and you will statistically lose a LOT of money.

Read below for some friendly advice:

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Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

DM us if you’d like to discuss this logical approach in greater detail!

@Adam Bartomeo that sucks!

I've always gotten the "feeling" that they are trying to do the right thing.

1 or 2 clients having an issue with a builder is understandable. 15 is at best, professional negligence. At worst, an accessory to theft.

@Stephen Schroeder it would be fantastic for PMCs to be able to charge owners as you describe, as owners might then truly appreciate everything their PMC does for them.

Unfortunately, no one has yet devised how to practically do this.

So, PMCs' absorb most office & admin expenses and are compensated for them via the monthly fees they charge their clients.

@Drew Clayton does your old PMC even have a website?

Are they properly licensed?

How did you find them?

Same questions about your new PMC!

Suggest you give your new PMC copies of your property deeds and a letter from you, the owner. Do NOT put your contact info in the letter! If you do, tenants will contact you when your PMC tells them "no".

With the deed and PMC contract, the new PMC should be able to convince most of your tenants to start working with them. They may also consider giving them an eviction notice and telling the tenants, they will see them in court if they don't believe the paperwork.

@Danielle B. as already stated, you should invest in real estate, not bet on government funding.

Interesting article reviewing what Trump did to HUD during his last term:

https://www.housingwire.com/articles/what-trump-budget-reque...

@Voley Martin

How high can housing prices in the City of Detroit go?

In case you missed it, Detroit' Mayor Duggan announced that the value of houses in the city increased 23% in 2024.

In the last 7 years, Detroit housing is up over 300%!

That's an average of 17% annually over that time.

The City of Detroit has not only outperformed every city in the Metro Detroit area, its outperformed every city in the USA from 2014-2024:

Let that sink in for a minute ... you'll probably need more time than that to process this!

Not only did Detroit beat every city in other popular Midwest states like Indiana, Missouri, Ohio, Wisconsin, etc...

Detroit beat every city in the super popular states of Arizona, California, Florida, and Texas - Detroit beat them ALL!

Now let's be real, yes housing values are up overall in the city, but they do vary by Neighborhood. So, it's still NOT a good idea to try to invest by zip codes - which are too big in our opinion/experience. Please stop asking us for "the best" zip codes to invest in.

Detroit has around 183 Residential Neighborhoods - wouldn't it be nice if "some proprety mangagement company" Classified them all as A, B, C, or D on an interactive map that real estate investors could use to make better decisions?

@Jaycee Greene thanks!

@Derrick Roland II Let's see, traffic noise, challenges backing out of your driveway, have to keep kids in backyard and off front sidewalks, big trucks passing by will shake the whole place, can't think of anything positive.

All the negatives will reduce your max rent and make it harder/longer to find tenants.

What's more important is understanding if the Neighborhood is Class C or D. Our website covers that.

Also, are you sure what type of property setup this is? 
--- Does the property have 2 Tax ID numbers or just one?
--- One shared water meter or two?

If two for either of the above, then the property is two side-by-side, but separate, townhouses.