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Updated over 1 year ago on . Most recent reply
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Making investment in Warren, MI work
First off, sorry to all who had to read my past whiny posts about my property in Warren, MI. This is a reason why you let emotions temper down before opening your mouth or typing on a public forum. Here it goes. I have a property in Warren, MI and I didn't realize it was in a class C neighborhood. I was ready to sell it and take a 25k hit but I decided that would be giving up and to find solutions to make this property work. It was appraised at 125k which I paid for it and it should still cash flow 150-200 bucks after paying the PM and everything else. I know a lot of people on this site have succeeded with SFH in less desirable areas and I want to hear your experiences on how you made them work. Thank you.
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I would normally say "tough it out" because a few years from now, it may be a great rental. One of the benefits of Michigan property taxes is they are capped at CPI after purchase so typically properties cash flow accelerates faster than similar properties in other states.
The area actually isn't terrible. City Data shows an average income of $31K but the census tracts right around it on all sides are slightly higer. (see screen shot)
On the other hand, I have to ask, did you calculate the increased property tax in your $150-$200 per month cashflow estimate? Your assessed value was $23K at purchase. This is likely to jump to $60K next year meaning your ~$800 per year tax bill will likely go to ~$2,400. (see screen shot)
It appears you bought a property at the top end of that market. There are almost no sales above that amount. (see screen shot) The median home value is only $53K. Did you hire an independent appraiser or did you use the rehabbers appraiser? I'm not saying anything illegal was done, but it appears fishy.
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