All Forum Posts by: Michael Smythe

Check out some of the great things happening in Detroit in 2024

https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

You're in the right place:)

Start reading the e-books on this site and past management forums to learn.

You can also try using the search feature here, but it's difficult.

@Artur A. common issues unfortunately. Seems many PMCs deliberately don't want to give too many details to owners about maintenance.

1) You should be getting bids with supporting pics/videos for your approval. Then the same for completion of work. Small things, like snaking a sewer, won't justify pics/video.

2) Not uncommon. Did you have the property professionally inspected when you bought it? What did the inspection state about the overall condition?

@Giezy Villavicencio there will be many agent that CLAIM they work with agents.

In our experience, at least 95% of agents only know how to buy/sell owner-occupied properties!

Don't believe us?

Ask the next agent that claims they work with investors to explain to you ROI and cash-on-cash calculations. We've taken over management of too many properties where the agent did NOT obtain leases, ledgers, tenant contact info, etc. for their investor client - forcing us to try to chase these items down, which we're not always successful at.

@Jonathan Rivera some thoughts:

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

Our OPINION for the Metro Detroit market (always verify each area for yourself!):

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+, 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, 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 nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, 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 zero or 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, 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.

Once you figure out what Class you want to invest in, then you should target a city.

Check out some of the great things happening in Detroit in 2024

https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

So is Grand Haven.

Irish Jones always has smart contributions here on BP.

@Naseema Subrati we 2nd @Travis Biziorek recommendation about Detroit!

Check out some of the great things happening in Detroit in 2024

https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

The NFL Draft in April is expected to bring over $100M alone!

@Bryan H. most of our competitors are NOT logical enough to do this:(

Nothing good comes from leaving water on in a vacant property!

So, we turn off water at the meter when a property is vacant, open the lowest spigot to drain the supply lines. Even if pipes freeze, damage will be minimized as no water will flow from meter to flood house.

We call this a preWinterization Procedure and do it even if heat is kept on.