All Forum Posts by: David Harris

As a newbie investor, I know I need to stash away money for repairs, capex and vacancies, but my question is where should that money be stashed?  Should I get a checking or savings account just to stash that money? An online savings account perhaps? Or, should I get a separate checking or savings account for each one? Please inquire. 

When calculating the vacancy rate for Detroit, what percentage should I use when running numbers?  One website says vacancy rate for apartments was 16% at the end of 2020. Other websites say 6-8%. I suspect that 2020 was possibly due to Covid-19. Also many websites are talking about apartment vacancy, but I need vacancy rate estimates for SFH. Please inquire.

I am starting my journey as a real estate investor. However, I am really torn on how to start with financing. I do not mind taking out a loan, but it is scary as my wife and I already have well over six figures in school loans. We always joke and say that our school loans are our mortgage! In the Detroit area, houses are really affordable with some SFH and Duplexes only costing $1,000 (major repairs of course). I just wonder from experienced investors, what would you do? Leverage the FHA or 203K loan or save up about $30,000 cash and buy a rental property free and clear?

Isaura,

Thank you for your detailed and informative post.  It really gives me an insights as to why Detroit is a good area for duplexes.  I have lived in Detroit my entire life and I have always noticed the large numbers of duplexes in all areas of Detroit especially on major streets such as Wyoming, Meyers, Tuxedo, etc.  In fact, the first home I grew up in was a duplex that my mother and father purchased as a middle class family just getting started.  I look forward to providing housing to families like ours was who are just getting started and need quality renting options within Detroit city limits. 

I especially like when you said: 

"At the end of the day for us it's more about where the best deal is so we can pass along as much meat on the bone as possible to our clients. All that being said I would have to say we are more focused on duplexes lately b/c there seems to be a growing demand for them in Detroit from our cash flow hungry OOS and OOC clients. I also enjoy the sheer size and enormity of the big brick duplexes in Detroit. Not unusual for them to be 2,400 to 3,000 sqft of big beautiful brick. There are some serious monsters or concentration of them in the 48204 and 48206 zip codes like on Calvert St, Tuxedo St, Lasalle, etc."

I am learning with my research that the "deal" seems to be what is most important for investors.  As a result, I believe that Detroit will be a good place to start because at the moment deals seem to still be prevalent many areas in Detroit (both good and not so good locations).  Thank you again for the post.

Hello Rassan and Travis,

Thank you for responding.  You guys both makes some excellent points.  

To Rassan: I agree with that in Detroit there seem to be way more SFR there anything else. I have been a Detroit my whole like and SFH is mostly all you see unless there is a busy street with duplexes or in the downtown/midtown area. I think its really interesting because in Detroit we don't have as many 3-plexes and 4-plexes as other cities.

To Travis: I love the equation that you and your wife have derived for your rental property portfolio. One duplex for every 4 SFH! Nice! For me, I like the idea of duplexes because of the 1 place, 2 homes situation. For example, with 5 duplexes I would essentially only have to travel to 5 locations rather than 10 locations if I had all SFH. I know this would seem picky to most, but would be my preference. Also, my exit strategy is still being developed. My wife and I would love to house hack our first deal by having a duplex renting out one unit and living in the other. Lastly, I am more interested in cash flow as opposed to appreciation because my hopes is that I am eventually able to have enough cash flow from rental properties to pay for our expenses (mortgage, cars, food, phone bill, etc.).

Hi, I am happy to connect with investors in Detroit. Please provide your expertise with multi-family and single-family rental property investments.  Which is better to start with?