All Forum Posts by: Michael S.

Sounds like you have forgotten the source of this experience.

Anyone can talk about a good partnership, it is another thing to be able to execute and communicate the partnership plan.  

Always make sure that there is a legal path to attempt to salvage the partnership assets as soon as the partnership and communication starts to fall apart.

All the due diligence in the world does not prevent a partner from cutting off all communication and if your legal documents are not in line, you will be out of luck in trying to recover anything.

I would first recommend that you narrow down a specific type of investment that you want to concentrate on like SFR fix and flip, long term rental, small multi, etc. Once you are specific on the type of property you are looking for, then you can concentrate on location. Every hot spot is a hot spot for a specific type of investment and in Detroit that can be a matter of two neighboring streets.

Example:

900-1200 sq.ft. brick ranch with at least 2 bedrooms and 1 bathroom, build no earlier than 1950, basement, prefer a garage.  Any condition.  Exit strategy is to fix and hold as a long term rental.

This will help keep an investor from shiny object syndrome and be able for others to help to identify a specific area that is best.

It sounds like you and your agent are not a good fit.

My properties are the in NW Detroit so I am not completely familiar with this neighborhood.  After a quick glance, I would find a good property manager (I know they are hard to find in Detroit) and get a realistic view of what the rents will be.

I would think that you will cash flow good even if you were to get a mortgage to go purchase another property.

If your long term plan is stay with flipping, then you defiantly need to finish the property and then maybe look at a different way of marketing the property.

Great Job!  Once you have been there a year, time to grab another one.

@Will Pritchett Great story and post.  This is great motivation for those of use still in the early stages of this journey.  I am building my portfolio in @Brandon Turner and @Joshua Dorkin favorite location to pick on, Detroit.  Finishing rental number 4 this month and looking for number five.  

I like your story because it seems very reachable from where I am at.

Thank you.

No need for a 1031 because you can still claim it as your primary residence and you are under the limit for having to pay tax on the increased value.

Is that $250/mo. account for all of your holding costs or just after covering the mortgage?

Just looking at $100k in equity for $3k income right now, that is a 3% return, assuming that there are no extra costs/repairs for the year.  With even the smallest bump in the road and your return is negative.  In strong rental markets, you can get much higher returns. 

What are your investing goals?  Are you looking for cash flow or equity growth?

Here is my 2 cents worth:

Sell the property and put $20k into a reserves account.  

For Cash flow, you could purchase 3-4 cash flowing properties that would cash flow many times more than the $250 you see now.

For equity gain, you could look at BRRRR starting with one property and keep recycling your remaining capital.

It all comes down to what is your investing goal and risk tolerance.

That is interesting.  Most are working in the opposite direction of pulling money out of California and putting it into other markets.

If your property is in good condition and the tenants are paying on-time and close to market rents, then they really should not have much to worry about.  I have not purchased with tenants in place but I believe that the existing lease agreement must be honored.

I have property managers for all of my property and I would have to defer to those who deal directly with tenants to better give you direction on what information to share and when. 

@Stacey Rackham If your salon is in a profitable location, why would you want to move it?  Moving it from Royal Oak to Detroit is starting over with all new clientele as the existing patrons will not follow over that distance. 

Buying a new primary residence is kinda expensive in most locations at the moment.

Another idea is to sell the house to capture the equity, put it in the bank, rent an apartment in the part of town that you are looking to move the business to and then keep a lookout for a property like @Paul S. suggested.  You should be able to save a bunch and be well prepared once you settle on a location for the business and a good deal comes along. 

@Shawn M. Sounds like you were/are able to find a nice little niche for your rentals.  I would look at expanding on that model as it sounds like it is a good fit for you and your family.  Don't get caught up in growing too fast, grow smart and profitable.

I have to agree with @Keyonte Summers that turn-key does not sit well with me and my investing objectives.   Turn-key is for turn-key provider to profit and maybe the very long term investor that wants to park their money for a very long time.  I am looking to grow my portfolio and equity positions.  

As the others have stated, you need to be more specific on your current investment locations and where you are looking.  Experience in the City of Detroit is not relevant in any other market.  Ring sub-burbs like Roseville, Warren, and Redford are another world.  Farther out from that it gets a little more common but still very different markets.

For others that might come across this "Metro Detroit" is any where from 1,300 square miles to 2,400 square miles depending on who you are talking with.  For the most part it covers everything east of Ann Arbor, South of Flint, and North of Woodhaven.  That is too many different sub markets to count.