All Forum Posts by: Joe Hammel

I would say 20% cocroi comes with a lot of conversations..

There are definitely markets that can show 20% cocroi on paper. The issue being, is that reality? Will it come with more repairs that kill those numbers? Or most likely, in that market with the tenant pool consistently pay rent? Theres also a large element of skill involved... buying turn key? the answer is pretty much "no". There isn't a consistent 20% cocroi market in the country. If there were/was, it became high demand that drove up prices to drive down ROI. However, sweat equity and BRRRR, yes you can find it.

I grew up in Northeast Ohio near Cleveland... now I live and invest in Detroit. 

Metro Detroit has consistently been ranked at the #1 cash flowing market in the country. So statistically, you're most likely to find the highest returns in that market.

Attached is my portfolio. If I do the math, there are a few 20%+ on there. It's about finding the balance between ROI and location. I could have bought properties that the ROI penciled out higher on paper....but instead chose to buy properties with lower ROI and a better experience.

Another vote for the Metro Detroit Area. Attached is a pic of my portfolio here. You'll see the column for # of doors. A duplex and couple of quads in there with locations.

@Travis Biziorek knows his stuff too, if you connect with him.

Love this good conversation stimulating post. Well done.

Personally (17 properties and 24 doors) i have created my llcs but im yet to transfer my properties into them for inconvenience, uncapping taxes, affecting my ability to get mortgages (more just wanting to do more research here).

While i dont think llcs are bad and could possibly help..(its likely some day i will actually transfer into therm) I agree that they definitely shouldnt be something that slows you down. Wouldnt worry about it at all until have more than 4 doors. (my understanding is that under 4 doors youre considered more mom and pops rather than professional, so the expectations arent quite as high)

I firmly believe in:

1. Min $500k liability insurance policy per property

2. Min $1m umbrella policy (don't forget to actually put your properties in to this coverage)

3. Don't be a slumlord. Get your rental licenses, make needed repairs, and maintain nice, safe properties.

There are only a few markets in the country that consistently cash flow. 

It comes down to price/rent ratio (and a few other variables like taxes)

Only some locations consistently have the ratios that work.

Here is a snapshot of my portfolio cash flowing $100k+ in Metro Detroit where most deals were purchased off the MLS in the past 2-3 years.

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

I cash flow $100k a year off 20 doors and have built a ton of equity in a short amount of time. See portfolio pic.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 10-14%

Cash flow: $200-$300/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties. We don’t buy those. We have found what works and repeat it as much as funds allow. Detroit is known as the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong or weren't able to execute.

If you do it right, its statistically the best market in the country for cash flow.

Here is a picture of my portfolio...

Thanks and 3 doors is great Mike! That's my biggest piece of advice is to just get started so the momentum (and equity) can start building.

 lol nice, definitely makes it easier to visualize your entire portfolio. I have another one with additional columns for down payment, rehab, invested, arv so you can also capture your total equity. Just to beefy for a screenshot lol. 

Going to start with the cliche "not trying to brag but..." 

For real though, this is my portfolio and I get asked what's in it and "how did you do it?" all the time, so I try to every now and then share it with others and answer any questions.

Location: Metro Detroit

Primary target: 

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 8-14%

Cash flow: $150-$300/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-7%+ (has been double digit for last decade)

Location: C+, B- 

Some Notes:

- I don't actually save 15% for vacancy, maint, capex any more. I used to. Now, on 23 doors that adds up to almost $50k/year. Right now, I sit on about $60k reserves and operating expenses (I have other reserves for other business/life) and if that $60k dips down I let it fill back up, and as it starts creeping up I add to my "next purchase fund"

- Yes, cash flow is lower and harder to find right now heading into 2024...but it's still out there. At least where I buy, it is.

- I'M BIASED: but look around at any data and Metro Detroit is the #1 cash flowing city in America. It is what it is and it's tough to argue against that. Not going to spend a lot of time defending the location I invest in, because I feel like the proof is in the numbers....my "issues" and "bad tenants" are very far and few between. There are definitely some do's and don't and a "sweat spot" when investing in Detroit. I or someone on my team would be happy to chat about that if someone wants.

@Mitchel Eze

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

I cash flow $100k a year off 20 doors and have built a ton of equity in a short amount of time. Happy to send a screen shot of the portfolio to anyone who wants to see, it just won’t allow me to attach pics to a reply.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 10-14%

Cash flow: $250-$350/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties. We don’t buy those. We have found what works and repeat it as much as funds allow. Detroit is known as the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.