All Forum Posts by: Carson M.

What was the final cost for purchase, reno, and holding before renting it out? Also, what are the HOA fees? Without re reading the whole thread, I recall the property located in Westland. There is definitely risk in investing in sub par areas, but with that comes the built in risk on the rate of returns you will see. It looks like things are working out with the investment. It's all about finding a good tenet when it comes to areas like that. Wish you the best of luck.

Also, there was a previous podcast with a buy and hold investor that works in C areas. His goal is to buy in a small concentrated area so he can be hands on enough to have the area become a positive in the less desirable neighborhoods. The more units you own in the complex, with good tenets in place, the more you can assure the condo as a desirable place. It could be a nice little nitche where you try and buy a condo there whenever one pops up.

As a owner of a landscaping/snow removal company, the general standard in Michigan at least is residential service begins at 2". For commercial accounts, such as apartments/condos/business, service is generally requested whenever there is precipitation. Under 2" usually merits one or two saltings to burn the snow away. More than 2" is plowed. Ive never heard of a company salting resi accounts, even at the multifamily level.

How are you thinking of structuring your deals for buy and hold with an investor? Equity or a given rate of return?

There was a recent article (2-3 weeks ago) in the WallStreet Journal about real estate agents. The gist was the top 2% are well off, a lot of the others do not do well. As previously noted, hitting 1 million in sales 15-20k, MLS is around 1K a year, and a recent agent I talked to said she has a $150/month desk fee to the company. She also said the industry is changing from 50/50 split to a 35/65 broker take majority split. The margins are small, especially if you are not working in top end cities like Bloomfield, Troy, GP. ANd, in those cities, I find there are a select few realtors that market themselves and monopolize those areas.

Obviously, it is duable to become a successful agent, but very very hard and very rare. I believe it would be important to look at the realistic risk vs reward.

@Jeff Lubeski

Have you been comfortable with your Hazel Park investment? I live right next to HP, and am weary on whether or not I want to venture into the city due to the poor schools and low income levels. Any experience with ease to rent and tenant experience would be much appreciated.

@Curt Smith

Does one need to qualify for a refinanced loan the same way they would to get a normal bank mortgage in the first place? Or is the bank more open due to the collateral already set in place (the equity on the home)

Ideally, I would buy distressed properties and fix them up before renting. I could always buy, fix, then refinance ASAP to buy the partner out, maybe with terms saying I will owe 1 year of interest even if I can repay the loan before a year's time as lapsed. Although, I do see that as adding some risk due to adversely effecting the cash flow

My company is 3 years old, with a true income (money in my pocket after expenses, before taxes) of around 35-40k for 2013. I also have zero debt to my name, just a few benefits of teenager living at home. I will claim around 35k net profit on taxes this year, but last year I only claimed 5k net profit. I currently have roughly 75-80k in savings. I would rather build my portfolio and expand a rental business opposed to buying 1 property with cash.

What I don't understand with private loan is if I offer 7% of principle with annual interest payments, then a repayment of principle in 3 years, and say they contribute 50% to a home- 80K home. I put in 40K, they put in 40K. I pay $2,800/year for 3 years, then pay off the 40K. I am in the same situation where I am now, where I will have a large lump sum payment. Is private loans just a lose lose for rental properties?

I could see where a 50/50 equity split could benefit me, say we both front 50% of every cost, yet I could assume a 10% property management fee, which would give me a better edge to the deal. But I have read that when it comes to loans and giving equity away, there are many legal (SEC) implications that I feel may be too complicated to be worth it

Hello all,

I currently have sufficient income through my small business, good savings, but lack of taxable income and credit due to being self employed (taking deductions) and being 19 (lack of credit history.)

I am wrapping up a flip, as it is on the market. I am looking to purchase rental properties with the idea of expansion. I know I wont be able to get conventional bank loans, therefore I am considering seeking out private money, where no equity has to be traded (more simple legal structuring)

I am wondering how people structure private money loans for rentals, say offer 5% annually for x years on principle, then pay off principle? Or do you acquire a property, pay an interest rate, and refinance to pay off the investors principle? I read a lot about structuring loans for flipping, but not on rentals that do not have a quick, profitable exit stragegy.

Jeff,

What cities have you worked in/ hold property in? Welcome from 696/Woodward area!

@Account Closed

I am seeing the same thing you are. Although I am looking in a different area (Ferndale, Oak Park, Royal Oak, Berkley) I have seen home in not so nice areas of some of those cities go from $40,000-$50,000 prices to anywhere from $80,000+, making returns minimal. I have seen substantial appreciation specifically in south and southeast Ferndale, where I could consider less desirable locations due to the 8 Mile and Hazel Park borders. I see Oak Park just starting to appreciate rapidly like Ferndale. I was looking at 40k Oak Park homes in the Ferndale school district this summer. Now, any home under 60k is a blessing.