All Forum Posts by: Dan Hedges

@Canneton Howard who did you end up hiring? Did it work out?

@Jeremy H. Did you end up hiring 855 Managers? What was your experience?

@Drew Sygit, Farmington Hills, Novi and Westland

Hello!

I'm looking for a Property Management Company in Michigan to manage 11 doors. Is anyone working with a good one? 

Thank you in advance,

Dan

Thank you, @Joshua B.!

Hello!

Has anyone bought a property from the Oakland County Courthouse before? I'm looking for information on the process and things to be aware of. I've looked at the title work. Would I be responsible for clearing up the liens against the property?

Thank you in advance,

Dan

@Tony Robinson, thanks for sharing. Nice work!

Thank you, @Brock Carroll!

Thank you, @Michael S.

For those unaware, BRRRR is an acronym for:

Buy
Rehab
Rent
Refinance
Repeat

Buy

I was a hesitant to purchase this property because of how unique it is. Each unit is less than 500 sq. ft. It was listed on the MLS for 90k, they accepted my offer for 87k. I negotiated the price down during the inspection period. It had water in the crawl which caused a mold problem. I ended up paying $68,800 for it.

Details

• Location: Farmington Hills, Michigan
• Year built: 1948
• Property Type: Duplex, each unit 1 bed, 1 bath
• Square Footage: 1,000
• Purchase Price: $68,800
• Financing: Cash & HELOC
• Closing costs: $1,233
• Rent at time of purchase: $450/unit

Rehab

I received 3-4 quotes and hired a contractor for the rehab. I used Foundations Systems of Michigan for encapsulating the crawl space.

Before Pictures:

Repairs/upgrades:

• Paint
• Vinyl Flooring
• Porcelain Floors
• Base Boards, Casing, molding
• Plugs & Outlets
• Fixtures
• Blinds
• LED Recessed Lights
• Interior & Screen Doors- removed exterior doors in kitchen
• Stainless Steel Appliances
• Quartz Countertops
• Cabinets
• Backsplash
• Hookup- New Washer/Dryer
• New Vanity
• Vent Fans
• Toilets
• Tub/Shower
• Gutters
• Chimney Caps/Tuck Point
• Hot Water Heater- 1
• Encapsulated Crawl Space, Added Sump Pump
• Furnace- 1

After Pictures:

Unit A: http://smartfloorplan.com/mi/v431539/player.pl

Unit B: http://smartfloorplan.com/mi/v431659/player.pl

Rent

I rented unit A for $850 and unit B for $825 fairly easily.

• Rental Income: $1,675
• Loan Payment: HELOC (I used this for some of the repair costs)- $650/month
• Taxes: $129/month
• Insurance: $47/month
• Total Fixed Expenses: $826 per month.
• Base Cash Flow: $849 per month.

Refinance:

I refinanced the property after the 6-month "seasoning period". The home appraised for 132k, 70% LTV, therefore the bank agreed to fund $92,400. I used Huntington Bank; they offer an awesome "LMIT" Program. If the property is in a low to moderate income tract, they pay all but $500 of closing costs. I paid $500 in closing costs!

• Purchase Price: $68,800
• Purchase Closing Costs: $1,233
• Refinance Closing Costs: $500
• Rehab/Holding Costs: $45,000
• Cash out of refinance: $90,852
• Total Cash In: $25,181
• Rental Income: $1,675
• PMTI Mortgage payment: $611
• Base Cash Flow: $1,064 per month.

Lessons Learned/Challenges

It was stressful refinancing this property during the Covid-19 pandemic since I had a lot of money tied up in this property. It was not a great experience working with this contractor, I was not thrilled with the quality of their work. I need to find a more reliable contractor.

Repeat/Next Steps/2020 Goals

• Hire a Property Management company to manage my 11 doors (5 properties)
• Find a reliable contractor
• Purchase a 2-4-unit property in Metro Detroit
• Purchase a 2-4-unit house hack in the Pacific Northwest or Boise