All Forum Posts by: Michael Smythe

Standard fees for the Metro Detroit area, except the 1/2 month rent for Renewals.

While some PMCs argue that a renewal fee tied to rental rate motivates them to get the owner the highest rent possible, many companies are going to flat fees.

Of course, everything is negotiable!

@Eli Kim Detroit's statutes require a rental property to have Certificate of Compliance to collect rent. 

If a landlord does not get the CofC:

1) The Building Safety Engineering & Environmental Dept (BSEED) inspectors may issue the following tickets:
- No property registration
- No city inspection
- No lead-based paint inspection
- Renting without a CofC

2) A landlord can then attend a Department of Appeals & Hearings (DAH) to challenge the tickets, but unless you have an active eviction, your chances are slim.

3) Technically, if you start an eviction against a tenant, the court may throw out your case if you do not have a CofC. 

4) At any time, a tenant can deposit their rent with the 36th District Court and the landlord will have 90 days to get the CofC. Failure to do so will result in the court releasing the escrowed rent to the tenant and the process may start all over again. A landlord cannot pursue this lost rent.

Initial tickets can easily add up to $1500. They can then keep doubling if not addressed.

REALITY: in our experience, the city is too unorganized to stay on top of properties without a CofC. Detroit has an estimated 40,000 1-4 family rentals and less than 25% have a CofC.

Landlords get "caught" in one of two ways: serious blight at their properties leads to inspection and tenants calling city to request a rental inspection.

Feel free to reach out with other questions:)

Tell us about your investing so far and future goals...

Buying with cash is a very conservative strategy. It will take a long time to build up wealth.

If you buy with financing, you leverage your money and tenants pay down your loan.

Think of it this way, if someone guaranteed you a 10% rate of return on any amount you gave them, how much would you borrow at an 8% interest rate?

There are a lot more moving parts and more risk, but using financing to acquire investment real estate works the same basic way.

Will chime in that it often depends on the property and neighborhood.

Class A properties don't really provide high ROI as rentals, so it's better to flip them.

Class B & C may not be good flips, but provide decent ROI as rentals.

Check out RPOA Grand Rapids - big group of investors.

Agree with @Nathan Gesner that "homelessness" isn't a greenlight to ignore laws and disrespect your community.

Those homeless people digging in the trash and leaving it, don't give a hoot about laws or their community. 

They're also probably urinating and worse on the HOA property.

Just read something last week about over 400 homeless people being rounded up for violations. ALL were offered several city services and most turned them down.

To build a bit on what @Travis Biziorek shared, we have investors that do this all the time.

Of course, it's a bit different when it's your primary home!

Would also suggest you use Google Streetview to virtually drive around the neighborhood. Google updates these every 2-3 years, so they are fairly reliable. 

Biggest concern should be how maintenance and repairs are addressed.

Many of the flat-fee or low-cost providers don't handle - which can turn into a nightmare for the owner.

MTR is even harder than LTR, so none of this is surprising.

Hopefully you've learned enough DIY'ing to interview several PMC's and ask INSIGHTFUL questions about their processes & procedures - instead of only focusing on their fees.