All Forum Posts by: Aaron K.

I have a renovated 3 bedroom, 1 bath home in Ferndale, Michigan. The market has increased by a lot over the last four years and my home is nicer than most rentals. I charge 1450 which is kind of low by $100 dollars, but it attracted good tenants.

Now my tenants want to go into a month to month. They have stayed one year. I bought two new appliances for their term and let them pick a new stove for almost a grand. I have also let them choose the option to paint.

I’m going to let them stay until May after their term expires in February. I’m trying to decide on turning it into an Airbnb or keep it a long term rental.

How much should I increase the rent?

@Travis Biziorek that is a great mindset. I own a house in Ferndale and it isn't doing bad. I'm making a small profit after expenses, but I am planning on turning it into an Airbnb over the next few months once my LTR tenants are out.

The nice thing about a Milwaukee property is that I might not have to hire a property manager that will take 10 to 15% since I am so close. Also, I can check out the deals a little easier. The flights to and from Detroit have to be planned out ahead of time or I have to make the four hour drive on a weekend.

@Aaron Olsen I'm an attorney that is licensed in Illinois, but I invest in that area. Great place to invest! If you need to talk to some locals that can point out deals or if you need an awesome guy that does tile work, let me know.

@Marcus Auerbach and @Matt Maurice Thank you so much for the responses!

I plan on being extremely hands on with the acquisition. My office in downtown Chicago is only 1 hour and 48 minutes away from Milwaukee which allows me to review the property, the neighborhood, meet with inspectors, interview property managers, and etc.

My fear is the renters. The home I bought in Detroit is great. It was completely rehabbed, I haven’t had to do any maintenance, and my renters have been great. I’m only making $250 a month due to the mortgage though. The appraisal price on the property increased from $144 to $205 though!

Now I’m sitting on cash due to my new job and a bunch of referrals. I figure if I’m hands on with the property in Milwaukee and find something turn key, maybe I can get that 15%+ cap rate that everyone chases after.

My question is, how do I calculate the expenses, the turnover and where do I go to find a good property manager that won’t gouge me to deal with tenants?

Im from Detroit and know investors, but I have heard a lot of horror stories and a lot of deals are gone. I have been contemplating deals in Milwaukee, but there are tons of deals with low investment needed (or so I think). 

Does anyone have any insight?

I’m looking for rental properties with a decent cap rate. I have cash on hand. Ideally looking for a duplex that is turn key or has only cosmetic repairs needed. 

Anyone have advice or can someone recommend an experienced broker for investments in Milwaukee or Detroit?

@Jay Hinrichs we try to steer people away from these options actually. There are many ways to get around this issue and put them on a fast track to getting green cards.

The one thing that they would have to be patient about is time however. It usually takes about a year for an individual to be granted the assurance that they meet the requirements.

One route is to have someone come over on a B1/B2 with an extension. Then later have them apply for an L so long as they set up a corporate structure and have managerial experience with enough income to support themselves. Once this is established you can always go for the green card route.

An L visa also offers the opportunity for a 7 year stay. 

A lot of people have already committed to the EB-5 route though and don't realize that they had other choices. 

I'm not sure if there are many EB-5 investors in this group, but I wanted to share some recent information that I received from our law firm. Our firm gets weekly updates on changes throughout the world regarding business immigration and we assume that this will have a major impact upon EB-5 candidates.

The bulletin says the following:

"A final regulation expected to make changes to the EB-5 immigrant investor program is now under review at the Office of Management and Budget, the last step in the regulatory process before the rule is published and implemented.

The Department of Homeland Security seeking to increase EB-5 investment thresholds and limit the types of development projects that qualify for the program. As originally proposed, the rule would increase the minimum standard EB-5 investment to$1.8 million and the minimum Targeted Employment Area (TEA) investment to $1.35 million. Current minimums are $1 million and $500,000.

The final rule will remain confidential until released for publication, which is expected to occur in the coming months. Until then, the EB-5 program will remain subject to current rules, including investment thresholds."

With all of this being said, I wouldn't anticipate these to be the only changes. If you're a potential EB-5 investor, try to get everything done now to avoid the stricter guidelines later. 

I decided to go with a real estate agent that is inexperienced with short sales.

He is a personal friend of mine and we are both new to the idea. We have found a couple different properties. These places would normally be outside of my price range, but he insists that we could probably make an offer that a bank would accept.

I don’t think it’s very practical, due to my lack of experience, but I love two of the properties we have seen and we could turn it into a really great investment.

The question is, how much should we offer usually? Is there a magic formula or percentage?

Also, how long does it usually take to do the whole process?

Sorry for the newbie questions!

@Patricia Steiner wow! I love the wealth of knowledge!!

I’ll show my wife what you said. She’s yelled at me twice for “addiction to new app”. Haha.

Thank you so much.

@Aaron Hale Illinois is kind of crazy. You have to have an attorney at your closing. If you are a lawyer, they also allow you to take the exam without the 40 hour training since we have to learn property law in our courses and for the bar exam.

My former employer would have weekends where he would make money off of the sales from his agents and then do two or three closings at a grand a pop twice a month.

He also owned the title company.

Very lucrative in Illinois.