All Forum Posts by: David McCracken

I'm currently looking at buying a duplex with two 1-bedroom flats. The basement has a common area as well as an unfinished setup for a small studio apartment. Plumbing and electrical is already set up for a bathroom and kitchen. This means I could potentially convert this duplex to a triplex. What are thoughts on creating a small basement flat?

The property is about 1 mile from a popular downtown area. So the demographic is really good, lots of young professionals looking to live near the action. Some potential issues that come to mind are mold and radon, but I could test for both of these and potentially remedy. Zoning is also fine to add another unit.

It's already up and came.

@Cyle Lublin I can't say I have any good recommendations for other house hacking cities. Good duplexes have become increasingly rare in Metro detroit. You'll find plenty in Detroit itself, but I can't say they would be something you'd want to live in.

I ran into the exact same tax problem as you. I'm happy to hear you did your due diligence! It's definitely a problem with realtors I've run into. I think they are just ignorant of the fact. They aren't educated on Proposal A, and the fact that the cap on year-over-year tax increases is removed when there is a transfer of ownership. You found the millage rates so just use those for your calculations. 

There's plenty of meet up groups for real estate investors. If you look on the meet up app you'll find some. I haven't been to any myself, but now that you bring it up I probably should!

Best of luck out there, let me know if I can be of any help.

I own a duplex in the area and I think I know the exact house you're talking about, over on Troy street.

Sellers are taking advantage of the market, and I'm of the opinion the upper/lower duplexes are priced out in Ferndale. I ran the numbers myself on that duplex and the cash flow looks negative to me (just like all the other duplexes in Ferndale right now).

I strongly suggest you create a spreadsheet so that you can crunch numbers quickly as you peruse through properties. It will safe you lots of time in the long run. It blows my mind when people buy investment properties without having a VERY good idea of how much money they will net. 

I'm not a fan of forming an LLC, especially if you only own one house. Your landlord insurance will have liability coverage, and if you're really worried you can up that as high as you like. Eventually when you buy more properties you should get a PUP (Personal Umbrella Policy) for even more liability coverage.

Hi all, I live in the metro Detroit area and have specialized in investing in the Ferndale area. I'm looking for a new realtor as the one I normally use is having a baby and buying a house herself at the same time. Needless to say she'll be very busy. Does anyone know of a good realtor who specializes in investment properties, perhaps in Ferndale and the surrounding area?

Hi all, I live in the metro Detroit area but have done most of my investing in Oakland county. I'm looking to spread my wings a little further and begin looking into opportunities in Macomb county and Detroit areas. Does anyone know of a good realtor who specializes in investment properties, specifically small multi-family properties?

Hi BP, I'm relatively new to the RE investment realm. I'm looking for a hand-on CPA who specialized in real estate investing. Does anyone in Oakland county or Metro Detroit have any recommendations? Thank you!

@Todd Douglas thanks for the offer, I'd be interested in any help you're willing to give. 

Correct, currently just Macomb and Oakland. I live in Rochester Hills so I prefer to keep my properties close by so they are easier to manage.

Hi all, I'm in a little bit of a rut at the moment. My RE investing started off with a bang; I found a duplex in Ferndale, MI for just under $200k that's giving me about $1100 in cash flow every month. I want another one just like it, but the multi-family market seems very dry at the moment. I'm very partial to multi-families, I think it's one of the best ways to achieve great cash flow.

What's the best thing to do in this situation? Should I try looking for off market properties or wholesalers? I'm in a bit of a rush because I'd like to close in the summer to take advantage of the high demand for rentals. Thanks!

Hi BP, I just purchased my first rental property in SE Michigan and will have tenants signing leases today. I was curious what kind of cap rates others were getting in my area. The property I'm renting out is a duplex in a nice area, with middle-class tenants. I imagine there will be those who rent in lower income areas, and are able to achieve better cap rates. Does anyone have a minimum cap rate they need to see before purchasing a property?