Accidental Landlords in Metro Detroit

[Katherine S.]

Hello!  I'm very excited to find this site.  After only a few hours here, I've already learned that I don't know much at all.

My husband and I have sort of backed into becoming landlords. A few years ago, we bought a 3/1 on a short sale as a place for our youngest daughter to live in while working and going to school. She basically covers the PITI. We jumped at the idea because we saw this house (with a full basement) as a way to get all her musical instruments, drums included, out of our home!

Then, we offered the same kind of deal to our eldest daughter if she would choose to move back to Michigan.  The house directly across the street went on the market, and we bought it.  Well, after we put some money into the house, she decided against moving, so we leased it out.

Then another house on the same block went up for sale which we bought last fall, so now we have three identical homes on the same block, all occupied.

I created a spreadsheet to try to figure out if we were making any money, and came up with a worksheet that is pretty close to the analysis I've seen here. My year 1 ROI on the second and third houses is 17% and 15.8% respectively, and the one our daughter occupies is just above breakeven.

So now we're excited about buying more properties.  Our objective is to create a large enough income stream to allow my husband to retire in a few years.  We figure we'd need at least 10 properties to do that.  However, due to my health issues (wheelchair), I think we need to strive for an even greater income stream in our future.

But I'm starting to run into a few problems...finding a lender to finance a fifth home (we have 3+ our current home), reducing the loan acquisition costs, finding properties that provide a similar return in a market where prices are going up, and finding the funds to invest.

I have found on-line forums on different subjects to be a terrific way to learn new things, and I expect nothing less here.  Thanks for letting me join!

Katherine