All Forum Posts by: James De Silva

Many thanks guys, these are good pieces of advice. For some reason I didn't get notifications that I had replies on this post. How odd! The property is in oak park as opposed to Warren and you're right, it does work out slightly better to get paid even with late fees. Everything is slightly delayed, but by year's end you have more money as a result of the late fees.

Hi BP. I'm looking at duplex property in Oakland county, Michigan which has tenants in it. The tenant has been there for 3 years and they have been consistently late at paying the rent. I would say at least 75% of payments are late by a week or two, but they do get paid eventually.

That said, the last two payments have not been received according to the ledger. The second unit has a brand new tenant without any rental history on him. This could go either way, but given its the same property manager, it's quite possible this is the same poor quality tenant.

However, the number on this duplex property are still quite attractive. I think it's running at 20% cash on cash if I finance 75% and 9.5% cap rate. So I'm wondering what you'd do in this situation and what you'd think about. Would you evict the older tenant? This is meant to cost about $2500, which I could negotitate down from the seller. Or would you skip this property altogether?

Numbers: 

Ask price: $95k

Property tax: $2040/yr

Insurance: $50/month

Utilities - paid by tenant

...

All expenses

Rents: $635 and $500 - This is below the rents I've seen anywhere else in the area.

Welcome Jason, to BP. This place is full of great advice, and I think you'll learn to love it.

Hello again BP community! I'm looking for a recommendation for an excellent accountant in the Metro Detroit area who you've worked with to do the taxes for your real estate ventures. I'm pretty handy with excel, so I think I can keep track of my own expenses, but figuring out how to get the best from the US tax system is a job best left to the experts.

I'd prefer someone who works within 30mins of the southfield area if possible. Many thanks BP!

Everyone has such great opinions here. I'd like to strike a balance, but also try and analyse things what they are really worth.

Can you really tell the difference between individual flavours? If not, eating at cheaper, decent restaurants or even better, a great home cooked meal works out better and going to a 5 star restaurant. You'll be healthier too!

Does a BMW really feel like a much better drive for the type and amount of driving you do? If it isn't, get a Toyota. You'll get better mileage, it won't break down as much and no one wants to steal your car.

When you go travelling, do you really want to spend time at a fancy hotel or outside enjoying what the location has to offer? Stay at the cheaper motel and spend more time outside enjoying the sights.

Do you want to live in a fancy expensive neighbourhood with a walled garden where your neighbours play golf, wave from their Mercs, but its actually akin to Desperate Housewives where everyone is homogenous, bored and bitchy? Or would you rather live in a modest community where you get a diverse, genuine people who help each other?

Sure you can occasionally splurge, but if you're sensible about it, I think you might find that the "Cheaper" alternative actually makes your life better. So I wouldn't think of it as being 'frugal' so much as choosing options that make you evaluate life differently.

Hi all,

I'm looking for a few recommendations on a great real estate lawyer. I plan on buying property in the Metro Detroit area (possibly including Detroit itself) and I'd like someone who is experienced with dealing with investment property, leases and so on. 

Also, do I even need a lawyer if I'm just buying regular single family homes and condos? Bear in mind I know very little about real estate law.

Thanks,

James

@John Knappmann great question. Unfortunately I think you also answered your own question. It's terrible to force people to leave properties that they've been in for years to go somewhere else.  However, if the alternative is relatively cheap rebuilt homes (made by investors and perhaps partially funded by govt) or maybe even higher density housing in a more centralized manner, then more services can be provided cheaper.

But it's just an idea. Just as your well thought out post above discussed how it takes many factors to ruin a city, it also takes many factors to save it.

That's very interesting and seems like a very sensible law. 

Surely if someone got into your vacant property and decided to stay there, that's also breaking and entering, which is a crime in the first place?

If a property was not being rented out, what would you recommend to deter squatters? If you had a portable security system (if such a thing exists!) which got triggered and you had the police kick them out within 48hrs, does it qualify as squatting?

Whilst it's interesting to talk about who caused the bankruptcy (and I really do mean interesting), it's also mostly academic. And whilst I think fairness is important, the world is not a fair place as everyone knows.

What is probably worth discussing is what are the repercussions of various outcomes of the Detroit bankruptcy. People don't die from bankruptcies and nor do cities. There have been a number of municipal bankruptcies in the US. Those places have (sometimes) made a comeback. 

Detroit will emerge from this bankruptcy with less debt, better services, but will almost certainly screw over a generation of people who have made the city their home. They will leave in search of better places and ultimately the city needs to shrink.

I do have lots of opinions about this, but I'm also an relatively newcomer to the area, so I don't claim to understand everything or the history.

Thanks guys! Appreciate the welcome. I'm looking forward to meeting some people in the area. I've heard of a couple of meetups in the area which I'm hoping to get to.