All Forum Posts by: Alejandro M.

Hi all, does anyone have a recommendation for a good real estate attorney in the Plymouth or Livonia area? I am planning on buying my first property soon without a realtor so I need someone that can help me with purchase agreements, closing, reviewing all of my lease related contracts, and handling evictions (hopefully not necessary). Thanks!

@Mike Dymski, this question is for buy and hold. I agree, REI is a lot harder than just throwing money at an Index Fund so the added reward needs to be sufficient to justify the additional work! I just can't really find people giving much details on how much they expect to make after all expenses to go into the deal. A common number I hear is to at least cash flow $100/month/door but that doesn't tell you anything if you don't know how much the initial cash outlay is.

I also know a lot of people here are anti-stock market so they're happy with anything that beats a savings account which is not the case for me.

Hi all! I don't want to start a discussion on whether REI is better than stocks, this topic has been debated extensively. Rather, I would like to get a good feel for what people's criteria are when they are trying to decide whether to invest their money in index funds or real estate. I believe that the stock market will continue to produce an 8% YoY return after inflation. My intent with my first deal is to buy a property that exceeds this return by a wide enough margin to compensate for the added work that it takes to buy properties vs. just sticking money in an index fund.

So the question is, for those of you that also invest in index funds, what is the minimum return that you seek in a buy and hold property that will make you buy it instead of index funds?

Hi Ryan, not legally! I suggest you familiarize yourself with the Fair Housing Act. Familial status is a protected class.

@George P. This is why I'm asking the question. I'm trying to understand what types of returns you are seeing and if my numbers are reasonable for the area or not.

How much do you typically pay for a property here? How much do you add in improvements? Is my 15%+ CoC return goal reasonable for a newbie like myself or is it just wishful thinking?

For those of you investing in Garden City, MI. I really like the area and was thinking that this is where I would buy my first deal. However, after doing the numbers it seems to me that taxes are ridiculously expensive. My understanding is the millage rate is 68 and most houses that I see on Zillow have a tax assessment between $30k and $40k. This leaves you with a tax burden of almost $2,500/year on a property that is (conservatively) going to rent for about $1,000. Once you subtract property management ($1,080/year), vacancy ($1,200/year), capex ($220/month), maintenance ($50/month), and insurance ($50/month) you're left with about $300/month in cash flow BEFORE the mortgage payment. This just seems kind of low to me.

Are my numbers just way off? How are you guys making money? My goal is to get 15%+ in CoC returns using what I consider to be conservative numbers.

I think it depends on your goals. When you ask what the best way is to sell the home what is your definition of best? Is it to get the most money possible or is it to offload the property as soon as possible? If you just want to offload it then wholesaling is your best bet but any investor that gets into a deal like that will want a deep discount. If your housing market is strong and the house is desirable then you should be able to sell it on the MLS for more.

Thanks @Matthew Cole, what types of units do you acquire and what areas do you invest in?

@George P that is impressive, do you self manage or do you have a property manager? I see that you are investing in Garden City also. I have been generally looking at Livonia, Redford, and Garden City and right now I am really liking Garden City. Livonia is a better area but it seems to me that it is a lot more difficult to get good returns on rentals due to the higher cost.

@Jordan Sutherland While this may be true for your grandfather, I think that when you are first starting out it is important to get good deals so that you can maximize your rate of return and grow your portfolio at a faster rate. Once you get to a certain point where you have accumulated a large amount of wealth and you are just looking for an income stream then the rate of return becomes less important.