All Forum Posts by: Alex K.

I have a single family house in Ann Arbor, MI that I used to live in but renting it out since around 2011. It's been an easy rental with just two families renting it since I moved out. This house was built in 1964 and has had only minor updates as needed like a new bathtub when it was leaking. The kitchen is still original and outdated.
The zillow/trulia value is about $348,000 and homes in my area are selling at about $200 per square foot but depends on finishes. I'm receiving $2050 in rent.  The taxes and insurance cost about 600 per month. My equity is high since I've been paying it off for many years and with appreciation over the years. 

My current tenants are great but they have a few cats and a dog so the house smells like the animals. I've considered approaching my current tenants about possibly buying it but not confident on what appraisal will be with current finishes.The carpet is in bad shape, the wood floors are very worn and the kitchen is out dated.  I believe 35K could give it a new kitchen, new carpet and redo the wood floors.

I'm trying to decide between 3 options.  

1. Keep it and continue renting it

2. Do I need to rehab it in order to maximize the value and get an good appraisal

3. Sell it as is but my concern is the appraisal will come in low

Any advice or insight is appreciated

Thanks

@Alex K.

Fair enough, lolll, do you see Detroit changing for the better In the near future?

@Alex K.

I’m looking to invest more into Detroit, any advice?

 I disagree 100% - this is a business, not a charity... succeeding in Detroit is VERY difficult, there is no time for weakness.  As far as the judges go, know how to do a proper eviction and there is ZERO leeway for the judges.  The judges are there to uphold the law, I couldn't give 2 ***** what they think of me.   I spent almost 5 years in Detroit to develop the ruthlessness it took to succeed in this city.. I lost a lot of money in those 5 years.  As soon as I wised up I made it all back and continue to prosper.

I need Help!!! Just a heads up long post.

I had to move for work and was debating on renting my house out. In Jan 2019 I made an agreement with text message proof “not sure if that means anything “ with my cousin that he could stay in the my home and rent it out until 02/01/2020. I hired a property management company and they provided the tenant with the wrong move out date “05/19/2020” on the lease agreement. On my original contact between me and the property management company I set the move out date to be 02/01/2020. I informed the tenant that the date was an error and that it would be updated.

Now fast forward to Dec 2019 and I am listing the house for sale due to unforeseen circumstances. My “tenant” refused to allow the house to be shown and demanded I pay $3000 for him to move out by 02/02/2020. Somehow my realtor sweet talked him and he only allowed the house to be shown on a Friday and Sunday. After few hours he cancelled the rest of the showings for the day and that Sunday. Thankfully I got a buyer. I’m set to close on 02/14/2020 with no idea if he is going to move out. I even offered him $1,000 cash for keys and he refused saying that was not enough and he wants $3,000 to move. My PM company did provide him with a 60 day notice that is set to expire 02/19/2020.

My PM company has been trying to contact him for a little over a month with no response. I have been trying to contact him as well and no response. He told my realtor “everyone is getting something out of this but me”.

What should I do? I really could use any type of advice.

I have about 250-350k in my California homes equity that I’m going to tap into. My goal is to get as many rental properties and as much cash flow as possible. I was recently listening to the Old Dawgs podcast (End of Dec 2019) about an IT engineer like myself that took $50k in home equity and the husband/wife team turned it into $54M worth of rental properties in Texas after 4 years (I know this rare, but illustrates the art of the possible). I got the message about Cash flow is King! So trying to follow that path of getting rentals and cash flow and tapping equity and getting more and more rentals is my goal. Good thing my regular job pays pretty handsomely so I’ve got additional income sources to help float a few creative ideas. Here are the options I’m looking at in the order they have become apparent to me:

1.) Get a MF duplex or fourplex nearby me in Northern California (Sacramento) for anywhere between $500-700k, each unit can bring in $1250-1400. Units are built around 1965-1975. I’m super handy and willing to play landlord so I can save that extra money and would want to put in sweat equity with floors etc to add $50k+ of value over a few years. Con is that this is California and prices are already kinda high.

2.) Get a MF fourplex in farther Northern California (Redding) for about $400-600k, each unit brings in about $800. Units built around 1970-1980 can be upgraded. I have local family and friends there to help play landlord.

3.) Get a MF fourplex or more units in Texas. I see lots of great deals around San Antonio and other parts where I can get a fourplex for around $400-600k and are like brand new, meaning no upgrades needed. Rents are decent on these newer an larger units, maybe like $1250/unit. Because I’d be making a bit more on rental income vs mortgage ratio I could afford to use a local property manager.

4.) Same situation as above in Cleveland and other areas.

My main questions:

-For a first time investor, do you use all the equity and money you have to get the biggest unit you can afford? Or start with one unit and go from there? Go big or go home is my normal thinking, but playing it safe to start is cautious, but also there is lost opportunity by holding back equity I have. 

-Is investing in California just stupid because price are so inflated and the tax situation? 

-Is the money I save by being local and being the landloard not a reasonable offset to a higher earning property in Texas etc?

-Is going for MF something most people would do if they could afford it over a SF unit when the goal is most cash flow and many rentals?

-If you have a regular job that pays a salary in the 6 figures is it a no brainer to not waste time on property management and property upgrades? I like and am really good and home improvement but not sure if the whole TimeMoney equation works out.

Thanks for any comments in advance!

-Jase

LOL...you trying to build my HML business? Actually...those rates are a LITTLE high..but not off by much:)