All Forum Posts by: Christian Hutchinson

 This is always a challenge for people.  I would do 2 homes at the 40-60K range thats in solid working class cities/suburbs.  Unless you have some real know how don't go low-income, there are too many variables.  Now if you have a family friend, a close friend, or someone who just willing to help you, and will help you score 5-8 properties in Flint and get them tenanted.

Get 2 places see if you like it, build up some more cash, and go more aggressive in your 2nd round of buying. I think at your pricepoint there might be some deals to be had in places like Waterford, Romeo, Holly, maybe even Fenton or Lapeer.

 Might be tough to get a second mortgage.  Your rental income must be aged two years for it to count, so when doing Debt Income ratios now, they count $100% of the debt and 0% of the revenue.  Now if you purchased way under your maxvand you can find another home thats a duplex in a similar price-point keep rolling by all means

 If you want to rent in Hamtramck know how to speak:

• Polish
• Albanian
• Tamil
• Bengali
• Arabic (Yemen/Saudi based)

I've found a few nice deals in Mexicantown, but I self manage and when 80% of the population speaks Spanish it can be difficult, so I backed off. I'm trying to rent a house out in Sterling Heights and 1/2 the prospects speak Arabic or Assyrian.  I am communicating with the kids and not the prospects because they of a language barrier.

If you want in early somewhere you can get a steal north of indian/west village or try to get a steal along Jefferson east of Indian village but west of the Chrysler plant. SFH and MFH to be had for under $50K. All the neighborhoods you mentioned came off the board 2-3 years ago investment wise. Also, take a look at Fraser it has solid schools and things come out under $100K periodically. It would be a solid B-Rental.

Househack, in 3-4 years save the money you would have put towards your mortgage you will have 30-50K.
That changes your life situation pretty good.

6-12 months prepaid rent.

I call my "public servant special". (Teachers, police, state/federal jobs)Appointment/offer letter plus 3 months pre-paid.

 We were looking in Roseville extensively this fall. Our Roseville Duplex has been very stable. The City has been easy to work with.  I really like that property, we really leveraged our position against the seller to get a favorable price (they wanted ($109K) but we presented an offer at $65K and I submitted several data points with the offer to justify the price.  The Seller countered at $79K.  We took it.  Then the appraisal came in at $67K. We almost walked away from the deal, we did in-fact for 3-4 days.  Then after a family meeting, I said convinced it made sense to go underwater for a property we will be holding 5-10 years for just $6K.  We asked to close at $73K, then we made up the difference.

We ultimately this Fall went into St. Clair Shores. I wanted Roseville but was overruled, because of a more desired just short of turnkey property.

Roseville because of its price-point and location has a deep renter pool. What we have found is we get a TON of activity on our property listing.  Its staggering.  Lots of the leads are just not qualified being just don't show up, short of income, have issues with a previous eviction, want Section 8, unsteady/unverifiable income, are qualified but won't turn in an application, are qualified but you realize they will be a headache to deal with.  You have to really wait on the right tenant.  Because of market there I really make an effort to show every single person the place that inquires because you just don't know until you see them and their paperwork. I typically say for every 4 people who I show a property I get an application.  Roseville this property its closer to 8-10 people. IRoseville is a great rental city, but as a landlord you can't get lazy on screening, because of the demographics of the area the margin of error between a bad applicant or good applicant is razor thin.

 Call Consumers Energy/DTE and they will tell you.

But based on the pictures you have 3 meters for gas and 3 for electric. plus the listing says tenants pay all their utilities.  So you could replace every furnace for $5K total furnance for that size unit is $900, I saw one water meter. Either way its $600/HWT installed. Those are individual prices, done in a grouping probably would save 15%.

We bought in Summer 2014 for $73K we just had an valuation done in Sept, and it came in 146K high, 95k low, and value 121K.  This is for a brick side by side duplex on .6 acre lot with full basements.  One unit is 1b/1ba the other is 2b/1.5ba, one unit has a 2 car detached garage.

So I just pulled the listing. We are always looking to buy, but this place doesn't interest me because its vinyl siding. Just a thing with how we buy.

I have a 2Bed room with a basement and garage at 696 and Gratiot (Glendale) thats $900/mo

I have a 1bedroom we rent for $750 own driveway, basement on the other-side of the Duplex.

We put in Central Air 3 years ago.

Depending on the layout you might have a value-add situation here.  It might be poor management combined with absentee owner.  We have no Section 8 tenants.

Do not commit to keeping those tenants. You are leaving $50-$100 per unit/mo on the table. Honor their lease and get market rate payers.  I would just spiffy up the units a bit upgrade the appliances, upgrade the kitchen OR bathroom.

A furnace on that size home is $2200, HWT is $600, a full tear-off roof might run you $6K, those windows look newer, that not a problem. Its on a slab so foundation issues are moot.

This is a value add play.  Make an offer strong enough to get a look inside bring your contractor with you.  Then hammer the price on any issues.
I'd offer $130K with a $10K EMD, use land contract to close quickly, pay him 6 months then refi to cheaper long term money with a bank, 4.25% at 15 years ($1100/mo for MTI vs $800/mo for 30 years).

Actually refi once you upgrade the units. then remove the current tenants.

 What part of town? built in 1920 I would be checking the windows, settling of the foundation, and the clay pipes to the street breaking down.

Central air in a triplex is no big deal, just get each unit some windows units and call it good.

Also, the fact its Section 8 means cosmetically its probably decent. I assume the knob and tube wiring is gone and you have newer plumbing lines.

I would take his financing pay him for 6 months and then secure traditional financing via a bank.  Also, I would low ball him, but offer him some extra money down to make him feel better about it.

 If your spouse is not on board with something like this it makes it much tougher.  That will cause much stress in your marriage.  Then if things go sideways (and they always do in Real Estate) having an all-in partner is ideal.

I'll use my personal situation.  My Father is remarried for 17 years.  He is the breadwinner, they have no kids together. His Wife retired 6 years ago, he plans to retire Sept 2019. She wanted and has spent her and his money on "experiences", dinners, trips, workshops, etc.  Well My Dad took some money from his 401K and has purchased a few properties.  We went in on some together.  His wife was adamantly opposed. Mind you I handle all the management, she isn't on any mortgages, etc.

Well a few months ago she had a major medical event. She is now unable to clean, cook, drive, etc.  Well My Dad took that money from the rental property profits and pays people to help her weekly get those things done. With her major medical event my Dad had a road to Damascus  moment with his own mortality and we engaged in an extensive estate planning, medical will, advanced directive. Lets say with this unexpected turn of events that fact his RE Investments are 4x value of original investment, and generating 2500/mo in cashflow.  They are really helping him get through this rough time considering his Wife had no cash reserves, long-term care insurance, etc. Also, she took no issue with spending the profits on whatever new shiny object they she saw on TV or at someone's house prior to her medical event.

What I'm basically saying you know your Wife and you think about the future, and how its shaped.  Sometimes you have to act unilaterally in the people you love's best interest even before they realize it. I imagine you are really thinking you need some steady income, and some assets of value as you age, and you are considering RE.  I would look into a range of financial products too that meet that goal.