All Forum Posts by: Christian Hutchinson

Its a tough market from out of state...If you mean the City I would say take a trip, see it for yourself I would suggest your try an inner-ring suburb.  Easier to manage from a distance...

Anything you buy in an area in Detroit that you will get a quality tenant be ready to do a $40-$80K renovation paid out of pocket use cash and/or credit cards.

Only 200ish mortgages were written in Detroit in 2014.  Everything is cash.

I say this as someone who has a Detroit Property in a highly profitable and desired area. Its not for everyone.

I write a 60 day termination clause no questions asked in my leases.  People's lives change at a drop of a dime.  If they can give me 60 days notice, we can figure out a way to turnover the property quickly.  I have their deposit, and I they might need a reference letter. 

I had a tenant pay on time for 15 months, then she made partial payments for two months($200 short).  I didn't catch it at first, then I noticed.

I called her asked her whats going on, she said her hours were cut at work about 5 months ago, and things were getting tight.  I told her well if you keep having problems let me know.  She caught up, paid on time for three more months. Then she called and said she couldn't afford it anymore.  So I said no problem you can move out.

She applied for a new place somewhere else that was cheaper, and the Landlord called and asked me what happened.  They said okay, and I know she got the place.

I think everyone understands we have tenants sign a 1-year lease for financial reporting to our lenders, or someone we may do business with to validate our business.  But until you are a huge firm with 500 units or more the cost/hassle of going to court to recoup money that you will never really see is pointless.  Especially when that person has your high value asset in their possession, tying up cash, or potentially neglecting, or even harming the asset.  I let people walk away because its a business decision.  Because frankly once people are done paying, they stop paying.

I deny evictions unless they provide 6-12 months of prepaid rent...

Hey its us down the street.  We have 11 Units...

Where you targeting in Detroit??

To be honest, I'd give my first go around inner-ring suburbs. 

Madison, Ferndale, Fraser, Roseville, SCS.

If you are a Westsider: Westland, Garden City, maybe Redford if you feel good about the neighborhood and its a turnkey property.

Also, with the Brush Park Development happening don't be afraid to save your nickels and pre-purchase during Phase I...Also don't be afraid to cut your house into a couple different units. Everyone in our neighborhood is doing it.  Rents are $1.25/sq ft or more.

Anything you get in the city right now you will need 30-50K in renovations to get it making money.  You can also go into some of the less sexy areas(North End, or Mexican Village) buy it and hope the neighborhood starts to turn in 5 years, and in the meantime some of the newcomers to the city get tired of premium rent, leave Midtown stay in Detroit, and land in those areas(two of my tenants have in the last six months).

I would approve them except the judgements are a non-starter.  He not one, but two.  Only way I would allow them in one of my places is six months of pre-paid rent.

I don't worry about score, I worry about whats on your report. Evictions, Garnishments, and Judgments are always a no no.

I don't want the phone call on the 25th of the month they don't have any money because of their check or bank account was garnished.

 Okay, makes sense.  I thought it was sunk, because if a lot+teardown is 100K, then your New Construction is $300K, the total cost of project is $400K, and once you purchase and tear down that likelihood of recovering your initial investment is extremely low

But either way the number is 35% to the table plus permits.  Thats good to know.  Thanks!

Looking to possibly purchase a lot or purchase a lot with a home for teardown...When this is done, basically the purchase of the property/teardown is a sucken cost?  is that correct?

Also was a typical financing for this sort of thing? How much do you have to bring to the table in terms of % of cost?

 Why would a lender call a loan less than a 1/3 through its payment period?  Is that caused by certain issues of not meeting the loan requirements

Thanks much appreciated!

I'm in Michigan.  I am looking at a 10 Unit(Townhomes) complex.  Where do you go to get that type of financing.  The seller is offering land contract...but I want to know what are more traditional options, such as walking into a bank/lending institution.

Also what does a loan look like for something with this size with $500K-$800K price tag?