All Forum Posts by: Michael Helfant

It depends on the form. 

For a 30 day notice, I'll use certified mail so I have confirmation of receipt 

For leases, disclosures, etc., I've sent them via DocuSign. In DocuSign, you can upload any form as a PDF and have them sign however you need. Provided a tenant is tech-saavy "enough," this feels like the cleanest and easiest way to me. 

100% there is value in looking at older, passed over listings. On my team, other agents/investors have closed on those types of listings multiple times just recently. 

Usually, in looking at and analyzing properties very single day, you'll develop a pretty good gut instinct for which ones really are worth passing over and which ones might have some light at the end of the tunnel. Often, agents will disclose "foundation needs work" or "tenant hasn't paid in 6 months" in the confidential realtor remarks that aren't necessarily disclosed in the public listing, and you can cross off those listings pretty quick if that's a problem you don't want to currently solve. 

However, many times those listings are just poorly marketed. For example, I bet some of the listings you are seeing only have one picture (or blurry, rough pictures), or list in the description previous rental rates that are lower than what you'd get with a little grit and patience. OR, they've been sitting there because a tenant IS paying under market rent and a majority of buyers just don't want to deal with it even though their ultimate goal is to buy and hold for 30 years anyway. Then, by the time the listing has been on the market for 30 days, many will assume "there must be something wrong" and skip over it and that just adds to the snowball that is keeping it on the market for forever. 

Ultimately, those types of properties are probably going to have some story to them. But if you are willing to zoom out and solve a problem that others might not be willing to, there is definitely opportunity if market rent, purchase price etc. all show that the deal COULD work. 

Like most folks have prefaced their posts with here - Smart decision to consult with an attorney. 

In Michigan at least, that EMD won't be released unless both parties have signed agreeing to how it will be disbursed. On the buy side, if a seller refuses to sign the release enabling that EMD to get sent back to you, small claims court is usually the next step. Often, at least in our experience, it isn't worth the trouble for the seller (especially when they know you are in the right as it appears here) and they ultimately sign OR agree to split that EMD in some way.

Hey Kathy - Leases come with the land, so whatever they have structured into their current lease is what will transfer with the property, and you will have to honor that agreement. However, depending on if they are month to month, how much is left on each current lease, etc., you can change this pretty quickly. If all of these leases were just signed and have 12-24 months left, you are going to be paying utilities there for a while...

Assuming utilities are separated to begin with, I'd have a new lease ready to go for the conclusion of their current one. Not sure where this deal is located or if you are planning on using a PM, but PMs will be fluent with this type of transition, too. I don't do it personally, but if in the Metro Detroit region, I could send you a recommendation or two. 

Depends on your market. In TX, looks like 10% CoC is no longer super common. There are other markets out there that will meet that criteria if your goal is cash flow. I'm partial to Metro Detroit where we'll see that both in the actual city and in many of the ring suburbs; however, while it isn't as commonplace as it used to be, there are still markets out there in a bunch of places across the country where it works.

@Kevin Kim Outside of the lender piece, one thing to consider is the homestead/non-homestead tax situation in your current municipality. At least in Michigan, when you move, you longer have the homestead tax exemption that allows you to pay cheaper taxes (on your original primary). Some don't report it; however, in reality, your tax rate will increase. 

This won't affect your analysis as far as capital to go get another rental - Just something to think about as you are running numbers on your first one. 

Like some of the previous posts have said - Depends a little on the situation and your goals. Generally, my vote is to leverage the money. This is particularly true right now with how cheap it is to borrow currently.

Mitigate risk by buying in markets where you are protected by cash flow. There are still SOME markets out there where you can purchase relatively turnkey properties that accomplish this goal.

If considering appreciation in your investment, some math below...

For simplicity sake, assume a property with a purchase price of $100,000. You purchase outright with cash and you realize a 10% appreciation after year 1 (forget the cash flow for this example). There, you've gotten a 10% return. 

OR, you increase your return by leveraging your money and borrowing with these low rates. Instead of purchasing outright, put 20% down (some lenders will let you do 15% right now on non-homestead) and borrow the rest. If that property appreciated 10k, your return as a percentage is wayyy higher. In this case, 50% (10k of your 20k investment). 

Of course, there is some nuance here, and again your strategy should align with your goals. Overall, though, I'd recommend leveraging and growing quicker. 

Hi @Cheyenne Hicks - Former teacher myself. You've picked the right market to invest in. One of the few across the country with the right rent/price ratios and ability to benefit from cash flow and appreciation. Interestingly enough, @Drew Sygit above is a good PM resource, too. 

Hey @Swathi Vijayakumar

Plugging BP a little bit here...But the binder idea from this episode below was really good. 

A little bit of it is going to be feel with your new tenant alongside the math of vacancy vs. rent increase if the current tenant decides to leave.

For example, if I've got a tenant paying $1200 currently and market rent is $1300, if I renew at $1200 and thus have no vacancy, that's going to better than a month of vacancy and then a new $1300 lease. Plus, I can continue to build reserves for rehab when that tenant does turn over. Now, if market rent is $1600 we've got a different story. 

Hey @Dante Pirouz - In case you haven't found one. Our clients have had good success (and who I've used personally) with Katie Haller. 

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