All Forum Posts by: Alexander Mair

@Brian Garrett This method would work better on absentee owners or investors who are at the end of their rope with out of state land lording. Given the right conditions, I agree with you. No reason it wouldn't work. 

@Derek Dombeck Option contract is a nice way to legalize the handshake agreement. Why do you think the option contract is safer than a JV?

@Peter M. @James Myers Have either of you tried this method? I posted about doing this for a fix and fleep or brrrr earlier this week. 

@Christian Hutchinson Are you using the term "fixer upper" for a certain property class? Or, are you putting money in these properties to force appreciation?

Your number work well even when accounting for all the expenses, cap-ex, and debt service the return is ridiculously good. When analyzing Detroit, how do you pad the numbers to protect yourself from potential property crime?

@Greg Felt Fantastic, that is exactly the answer I wanted to hear. Who are you using for PM?

@Christopher Foster My pleasure. Do you have any insight into the area?

@Christian Hutchinson Do you mind expanding on that idea a bit for me? Are you running under the assumption that raising property class level will bring in a better tenant? Thanks for your time. 

Has anyone partnered with a seller on a fix and flip or brrrr deal? My thoughts are that the seller, if motivated could carry the note much more easily than anyone else. You could start renovation immediately after a partnership agreement was formed, and carry on in a normal fashion from that point on. If the seller at the end wants to keep the finished product, let them buy you out of you percent of the deal.

Of course, as with any partnership there are a myriad of issues that can arise during the process. A homeowner may be subject to more emotional attachment or need more control of the flip, which would be a nightmare.

If you had no partner and not enough money to secure financing this idea seems worth the risk. Thoughts?

Hi Monica, Great job jumping in! The Denver market can be tight, but not impossible. I would scout rental sites for comps in the building and check public record to see average appreciation for units in the building and make sure you find out as much info on this HOA as possible. Best of luck.

@Pablo Barrientos Any tips on Section 8 tenants, either things to avoid or programs you've tried that have reduced headaches?

  You wouldn't happen to remember their names and if they were bigger pockets members would you? Anyone with knowledge in this area would be greatly appreciated.

@Christopher M. Thanks for the advice Chris. I'm currently running numbers all the way down to 70% vacancy and still seeing cash flow, albeit miniscule. In your estimation, does searching outside of Detroit proper make more sense? 

@Greg Felt Now that is an ROI. Are you calculating appreciation into that number? Are you using a property manager for your SFH's?

@Michael O. I'm currently opening a branch of the company I work for in Sydney, scheduled to return in Oct. My plan is to hit the ground running when I get back, book flights, get on the ground to feel properties out, and get some deals going quickly. I'll flick you a DM with the neighborhoods I'm looking (if you don't mind). 

Thanks everyone for being so active on this thread. All your info is greatly appreciated. 

@Pablo Barrientos

Section 8 is probably where I would head (if not currently the case) with these units. Do you have any experience with the population?

I've been looking into c class Detroit real estate for a while now (yes I know) and am amazed by the cap rates on multi family units. 17 doors at a 10 cap, 11 doors at a 13. Admirably they aren't in the best of areas, but It almost seems too good to be true. Most of the properties cash flow all the way down to ~35% occupancy inclusive of worst case lending terms, cap ex, etc... Detroit folks, what am I missing here? Do you have any success or horror stories that might shed some light on the matter? Thanks, Alex

I discovered BP through "Stacking Benjamins" - my favourite personal finance podcast.