Rough first year investing, is this normal???

[Alethea Sealy]

Hi all, its a pleasure to be here. My name is Alethea and I invest with my fiance. So he's French and I'm American we have very different views but agreed to invest in Detroit. We started in January this year with a few modest purchases (no bank financing) of multi-family dwellings.  Though they are in mixed income neighborhoods we do feel they are sound investments. But its been a challenge. My lack of real estate knowledge ( growing everyday), a scam contractor, lots of repairs that take longer than a few days to fix, late paying renters etc. We really haven't made a profit and we keep imputing cash into this project. Is this normal. I have cried at how long it takes to fix the houses with a little budget. My partner has fretted on the lack of results. We want to keep investing there even as we live outside the country but this is really a test. Is this normal? What has been your experience?

[Andrew Johnson]

Alethea Sealy So you basically chose the hardest possible path: rookie investor, out-of-country, fixer, mixed area of Detroit, etc. Even investments in decent areas go through a rough-ish first year. It’s why people always claim that “stabilization” can take 12+ months. So I’ll posit that you took those normal stabilization challenges and just poured gas on them.

That said, you are where you are and the month is spent. In your shoes I’d get a property manager ASAP. They can cure your rent collection, eviction, screening issues, etc. And there’s a least a chance they know a decent contractor that might be able to help you with the fixer issues.

Plan on bleeding cash until month 18 and see where you are at that point.

On a side note, you haven’t said how much you have invested. You could have bought 3 buildings for $100K each or 3 for $10K each. If these are really low-dollar purchases you may want to consider just taking the loss and selling.