All Forum Posts by: Srinivas Chinnam

Originally posted by @Mike D'Arrigo:

@Srinivas Chinnam Property taxes are killing this deal. They are 3% of the home value. Is this typical in that market? 

i agree with you. Yeah, I double checked and property tax is actually $210 per month for 2018!! Wayne county(Michigan) taxes are pretty high.

Originally posted by @David Walkotten:

One thing you are forgetting is your principal paydown to calculate your full return. It starts at $60/mo and ends near the $385/mo. Meaning your total return should be much higher than your CoC!

Grand Rapids is slated for a 9.2% price increase in 2019, the highest in the nation. Forbes. However you might calculate a 1.5% spread in appreciation versus your rise in costs. 

Finally, there are many new property managers hitting the GR market where your PM cost could be nearer 10.5%. 

Hope that helps! 

 Great point. I thought about principle paydown which is a good amount per month. This is something which is least talked about on BP. 

Yeah, I am really interested in the GR market. Wow! 9.2% is pretty high considering the prices right now. 

Originally posted by @Paul Leason:

@Srinivas Chinnam why are you investing in the east side of the state when you live in Grand Rapids? I know deals are hard to come by here but surely easier to view properties where you live?   

yeah, I agree with you. I will probably start looking into West Michigan in 2019. I am 2hrs from the properties I am looking into and planning to use PM for management. 

thanks to everyone who responded. I've decided to look for other properties which will actually cash flow. I've decided 10% CoC as my criteria after considering all expenses.

@Dennis M. yeah you are right. I feel like i am paying retail too. I've decided to pass on this and look for other deals.

@Mary Mitchell Thank you for the suggestion. I was thinking about passive investment. I think once i learn the stuff and build a team, its not too bad. West Michigan esp. Grand Rapids real estate market is really hot though. I will keep looking.

@Laura Williams Thanks a lot for your insights. I've not thought about that. I will increase my vacancy a little just to be safe on this. Unfortunately, there is not a lot of rent increases in this area I am looking into. 

Thanks @Sam Shueh I dont know about notes. I will look into it. Thank you. 

@Margie Pierce Thanks for the response. 

I agree. I can get 6% returns in an index fund. I want to get into REI but cant find anything which meets my criteria. My criteria is CoC 9%-10% to start with after all expenses. I think i should stick to this.

@Jim Goebel Thanks for your reponse. 

Great set of questions! Please see my responses inline

1. What kind of tenants and product are you going to be holding?

Srinivas: This is a decent B neighborhood - blue and white collar, working class with stable income. (not B+)

https://www.neighborhoodscout.com/mi/wayne

http://www.city-data.com/city/Wayne-Michigan.html

2. Don't count on appreciation but what is your overall market and likelihood of achieving appreciation gains might you be holding?

Srinivas: I am not sure how to check this. Is there a site which provides this kind of information. I am curious too.

3. Is there ANY possibility of missing something big on your costs?

Srinivas: I really dont know :(

4. Are there ANY good value add projects that might build either equity, rents, or both?

Srinivas: I found that the average rent in the area is $1068 in neighborhoodscout. This is a 1000sqft property with 3Bed, 1 bath. Have Garage and basement. I get what you are asking, I am not sure.

5. How does it feel to you? What does your gut tell you?

Srinivas: This is my first property. Based on the property, it feels good because it is renovated and all. Based on the numbers, I am not very sure if I should pursue it.

6. What other options/opportunities are out there?

Srinivas: There are other properties which achevies about similar returns but they are not with new stuff like newer roof, HVAC etc. Thats why I am thinking hard on this one. May i should keep looking at better properties.

7. How much volume do you currently have - is this a first time deal or is this just adding something to your portfolio?

Srinivas: This is my first REI.