All Forum Posts by: Cathy Malmrose

@Josh Deeden Michigan -- For quality of life buy a house on one of the lakes, Every amenity you could ask for and beautiful all season sports. For work invest in some of the depressed areas like Flint or Detroit or Grayling. One example of one of my investments -- SFR I bought for 19.9 and renovated for 3 (that's a whopping $23k). It brings in 925 a month and renters have not missed a payment even during the pandemic. If you're from a different state and not used to those numbers there's a good chance your not even going to be able to wrap your mind around it. The ROI is unbeatable. Quality of life is pretty amazing.

Does anyone have a great recommendation for a therapist who understands 1. entrepreneurship, 2. early retirement, 3. financial freedom most people don't achieve, and 4. codependency that can kick in when you have the resources to help but shouldn't. Few therapists understand this because it doesn't align with their worldview and they end up giving really awful advice. If you personally understand where I am coming from please message me and/or share your insights into how you managed it.

@Patrick McGrath Thanks for taking a minute to say that. I actually thought I would get someone telling me I don't know what I am talking about. But I've compared my profits with other landlords in this area and this approach is absolutely working. The ones who don't have pride of ownership in their properties are pulling small profits or have big cleanup bills between tenants, or worse, big eviction costs.

@Johnny L. Your original post shows that you have a good sense of what you're looking for (to be "treated as" a developer, not just get going -- responses were focused mostly on cost and that's only part of the picture). Since you don't have the financial clout (yet) to get what you need, go back to the ones you already talked to and ask them if they know of anyone in the industry who's just getting started out. Odds are someone's son / daughter / former employee is just getting started out, has the skill but not the clientele. Find a contractor (soon to be developer) who trained with the best, someone who makes sense for your scenario. If you don't want to go with someone just starting out, then bite the bullet, pay premium price and get past your 1st project.

"already a 2 unit" and "it's a single family" are contradictory. "zero records of any changes or permits pulled" are irrelevant. Whether or not you are doing renovation is irrelevant. Asking the previous owner isn't useful -- an individual isn't the regulating body and for all you know they sold the house because they got cited for non-compliance (most likely for renting it as 2 unit when it's an SFR). Is the question that you do not know which dept to ask? Go to the dept that issues the rental certificates / the one who does yearly (or however often) rental inspections. They will know the full story. I haven't come across a location in the US yet that doesn't at least try to make sure landlords aren't being slumlords. (Except Flint, MI, they have suspended their inspections but at least they have a dept you can ask.) I've seen people exit the reno business because of what they have lost by making this exact mistake. Non-compliance is never worth it. Just ask. If you're honest and following the rules then ask any city official and sooner or later you'll find the right dept. To be clear -- it doesn't matter how it is built out. I currently have a house that is built out as a triplex -- three kitchens, three furnaces, three water heaters, but since a previous owner declared it as a single family in order to save on property taxes, I can only rent it as single family. I'm on the board of property assessors -- the people who actually help change this classification and even I can't get it changed. (Not a single property has reverted from SFR to Multi in 40+ years. It's not just me.) Check your property tax bill? It often lists whether it is an SFR or multi.

Also, to be clear you said it is "zoned single family". Zoning is more complicated than that. It is rare to find an SFR only area and current classification does not indicate uniformity (some properties are in approved noncompliance). Usually the map contains many classifications and whether or not you are allowed to collect rent from 2 different renters in that single property depends not as much on zoning as it does on what that one particular house has been declared. In my city, once a home is declared SFR it never reverts to multi. Your area might be different. The zoning map is usually in City Hall, but you won't know for sure what you are allowed to do until you see whether or not your particular home is SFR or multi then if it is SFR go through the petition process to get it switched to Multi.

@Alecia Loveless I once got a house for 1/2 the asking price by going directly to the seller for a conversation. Realtors were angry but if they could have gotten me a better deal then they should have. Lol. Literally *half *

@Kaylee Walterbach Renovation. Renovation. Renovation. The numbers don't make sense when you first look at it and the only reason I took this path is because I had money to burn and it was fun. In the long-run it has turned out to be wildly beneficial financially. Benefits: 1) after the renovation I can raise rent by 100-300/mo per unit, 2) the tenants take better care of the unit, 3) longer stays, 4) referrals so no advertising and minimal downtime between renters (last one had over 300 applicants), 5) every single one of my renovated units continued to pay thru the pandemic, 6) no evictions in renovated homes, 7) ROI of the building as a whole improves. Tenants plant bulbs outside their unit, clean and take care of their space. Renovation is contagious. If I had been tight with funds from the get-go the houses would look very different today. I am proud of my buildings and am fulfilling my life's purpose by making homes better. If you're doing it only for the money you're missing the best part.

How do I join an investment group? I am not confident in the stock market. I have enjoyed doing my own investments in RE but I'm burnt out and want to be a silent investor. I extend about one land contract a year (all that's allowed per Frank Dodd laws). I own a small portfolio of properties in the Lapeer area, passing off the final ones to a manger now. Ideally I would be the silent investor on projects I care deeply about -- there are a dozen excellent ones near me - but I was burned on the last 2 due to me not having the time, energy or experience to run the team. I'm thinking silent investor is the way to go but I want to see how the pros do it first.

@Bakhodir Ismatov I wouldn't suggest a whole 100 increase a month. That may not seem like much to you but they're on a fixed income and that is a massive amount.