All Forum Posts by: Joshua B.

Hi @Travis Biziorek - Congrats on the move. I assume UofM is the draw from SF to AA. 

I'm an Ypsilanti native, went to UM for undergrad and law school, and now live nearby in Plymouth. If you have any questions about Ypsi, I'd be more than happy to answer them. @Sarah Lorenz is a friend of mine and she's incredibly knowledgeable about the Ann Arbor area if you have questions there. I'm a real estate attorney and a broker, so could help you out on either of those ends if need be as well.

@Erik R. - that seems like a lot of hassle, when you can find better deals with less work and less cash outlay in Livonia. Plymouth is just not a good area for rental investing right now. Prices are generally too high to even meet the 1% rule, let alone 2%. Obviously it's quite stable and a wonderful area to live in, but not great if you're looking to make money. There are deals to be had here and there, but those are on the outskirts of Plymouth Township (i.e. east side, either north and close to Northville Twp or south and close to Livonia). I've seen maybe a handful of good deals in the City, but those are almost exclusively off market. 

My answer doesn't help much, just a fellow Plymouth/Northville resident commiserating on the high prices.

 Good in theory, but here's a mistake I've seen made many many times:

-Investor, in the interest of increasing CoC return, REFIs each of their investment properties with one or a small number of banks

-Investor then has a bundle of properties with only 25-35% equity

-Market take a turn for the worse, and due to the fact that all of investors properties are in the same area, his portfolio gets hit hard

-Investor begins to struggle and a few properties have defaults on the mortgage

-Dragnet clauses in the mortgage allow the bank to foreclose on all the properties

-Investor loses everything

 Like Dan said, almost all of that info is available online these days. Most municipalities in Michigan use BSA, an online tool for tax/assessment info. You can see a list of all municipalities here: 

https://www.accessmygov.com/MunicipalDirectory

@Kevin Siedlecki - I'm of the mind that if a building isn't worth buying in cash, it's not worth buying period. That's not to say financing is bad, but it is why cap rate is the most important measurement. Leverage is risk and when things go bad, those who are leveraged the most tend to lose the most. Using leverage will make most deals more attractive. That's a given. But I think a lot of folks fall into the trap of convincing themselves they can swing a deal based on the COC return and lose sight of the fact that COC should be very far down the list of things to look at (if you look at it at all).

@Kevin Siedlecki Using very conservative numbers (as I'm a conservative investor), cap rate will be 7.5% (10.5% if you toss in an assumed 3% inflation rate). I don't look at cash-on-cash since I think levering up is a fools game and doesn't give a good indication of the true value of the investment.

So I'm under contract on a SFH in Plymouth, Michigan. I could (1) put it on the MLS as-is and probably make a few bucks pretty quickly, (2) put some money into it and make a few thousand more than in situation 1 but have more risk and headaches, or (3) keep it long-term as a rental that would be a little better than the 1% rule.

For those of you who've had similar options, what kind of difference do you look for from mathematical perspective in order to decide whether to sell or rent?