All Forum Posts by: Jesse Kassel

@Tim Ryan Great to hear this from a contractor. In this area unpermitted work is not uncommon and not heavily enforced. This particular build is not to a very high standard. I'm already feeling better about walking from this one. 

@Logan Laperriere The property is not currently rented, owner occupant is the culprit of bad renovations. The rent would likely increase as new developments in the area add more expensive units but comps are all suggesting 1500 for a similar size updated SFH

@Travis Kallay I tried, they said they had a cash offer above what I offered after inspection. Whether that offer is still available to them I don't know, so there may still be hope but I'm asking for quite a price cut knowing the un-permitted work may need to be removed. Unless they are willing to get proof it is to code and pay for retroactive permits, which I'm not sure they'd be able to, now may be the time to walk.

@Lateefah Mathews Thank you for the quick reply and honesty. You're absolutely right, FOMO is driving my decision making here. My estimates are based on personal experience having done a fair amount of renovation on my primary residences and estimates from friends and family who are contractors. Even so, the poor quality of work done in this house does make this figure less cut and dry. 

The neighborhood is notorious for having very few properties hit the market so that also influenced me taking this as far as I have. That and a cash offer that I just barely edged out. 

My SO also feels I should look for a more turn-key ready property, though they are few and far between I am thinking this will save me a lot of time that I probably haven't factored into the equation enough. 

Really appreciate your insight, I will keep saving and searching.

Looking for insight as I'm experiencing some apprehension on taking the leap for my first investment property. Here is the scoop:

Under contract for 120k, 40k below list. House appraised for 130k without repairs. needs AT LEAST 25k in repairs for ARV closer to 175k (doing much of the work myself)

Rent around 1500

20% down, 7.990% interest (~9k closing) I'm 1099, make ~100k yr but that fluctuates quite a bit. I have about 100k savings to use.

Cash flow is not great, after PITI looking at about $200/mo self-managing and setting aside 10% for cap ex.

The owner has done some questionable work with the kicker being an un-permitted unfinished addition that would either add 150 sqft or cost to remove/rebuild, still not sure how I want to approach this. After the initial expense I'm still looking at an older roof, windows, and various other needed updates, not to mention what I haven't found yet. My plan is to chip away at these items as needed, keeping about 20k reserves for this in the next 5 years. 

Where I'm worried I might kick myself if I back out is the area is appreciating fairly quickly with a lot of development nearby with many being priced out a neighborhood over and coming this way. I've been dragging my feet for a while on this, watching a lot of deals get picked up fast and flips on homes with better layouts and more sqft going now for 250-300k nearby. I lived in this neighborhood for 7 years, purchased a foreclosure in 2014 for 26k, put about 75k into it and sold for 215k (30k over ask) in 2021, so I feel good about the area. 

Am I banking too much on appreciation? Plan to hold for 5-10 years. 

Is the risk of shoddy work a deal breaker? I've budgeted for what needs immediate correction but worried this could spiral faster than expecting.

Am I actually in a good financial position to do this? Being 1099 and not having guaranteed income is challenging as is, I'm essentially dipping deep into my safety net to fund this project but the last couple of years have been great and I'm eager to get started.

@michaelsmythe Same here! 

I noticed it and had intended to contact DLBA but within a couple of weeks it was already up for auction. 

Will keep an eye on it to see what happens.

@Travis Biziorek, that's the one! 

I thought the discount might've played a roll. I also thought it might go for up to or over 50k. 

It's at least good to hear this isn't some common tactic that I'm unaware of. I'm still curious about people working together with the next highest bidder (presumably one with discount) winning.

I appreciate your insight, I've read several of your posts and bookmarked your site in my research on investing here in Detroit! 

Hello BP community, this is my first post. I'm just starting out still looking for my first project. 

Recently came across a Detroit land bank home that was in pretty good shape in a decent neighborhood, needed about 20-30k with ARV of ~115k. With bids starting at 1k I was very interested! Of course bidding quickly passed my 30k tap out point.

I wanted to see where this thing went so I watched the rest of the auction. With an hour left bids jumped from around 30k to 50 to 100 with a final bid of 200k.

I am totally confused and wondering if anyone here has any insight as to what happened? Was this some kind of strategy for bumping the previous bidder or just frustrated frenzy over what could have been a stellar deal? Would love to know if there's a part of this process I am missing should another chance like this come up again..

Thanks!