All Forum Posts by: Justin Thind

@James Lucenti know you're trying to be helpful, but you know nothing about our market.

Evernest runs their Detroit ops out of Ohio. 
They seem to be good with Class A properties, some Class B, but don't seem to do well with Class C or D.

JMZ doesn't really do Detroit, but is a good competitor in the 'burbs.

Nathan doesn't post much anymore:(

What does the language in your management contract state?

Were this emergency type repairs?

Congrats on your first deal @Justin Thind!

And here is my opinion based on my personal experience.

I invested in my first rental properties in the south Chicago suburbs with very similar economics / pricing / rental rates / etc. 

I bougtht a $30,000 house that had had rents in the $1,100 - $1,200 range and taxes of $3K.

Over the next year I bought 8 more properties in places like Posen, South Holland, Riverdale, Sauk Village, etc.

And I will never do it again based on my personal experience.

The numbers looked great on paper but here is what you can't see on paper and only experience can show you.

1). Properties managers will make or break you and most property managers race to the bottom in price to get people's business and can't afford to operate at scale. This creates a challenge for you because the asset performance is only as good as your manager. 

2). Repairs cost the same no matter what the price of the home costs. Just because the house is cheap doesn't mean the repairs will be cheap. 

3). You need to look at the social economic development in the area. There is a reason the houses are priced the way they are priced in any market - that is why they call it "the market". The lure of a cheap property looks like a deal but if it was they would be flying off the shelf. I don't know the economic area you are pertaining to but I do know the "lense" you are looking through as I thought the same thing when I first got started.

4). Charging $1,200 a month in rent and collecting $1,200 a month in rent is two different things. I had tenants that were amazing and I had tenants that lived in my homes for a year without paying rent becuase they "knew the system" and we literally couldn't do anything about it. This comes back to poor property management but also local and state laws play into account. Local and state officials don't always understand economics / finance and make laws that are counterintuitive to creating economic development in an area and what ultimatly happens is the money leaves because the system doesn't work. You need to look at the economics in the area and see is it on the upswing, stable, or down swing.

And....

With all of this being said I know people who crush it in areas like this but they have boots on the ground and operate at large scale. They have their own property management team, own contractors, own leasing team, etc. so they control the entire supply chain.

Take a step back and understand the bigger picture and ask your self where do you see yourself in 5 - 10 years and then get started in that direction. If that means owning a large portfolio of properties in this area then do it....if not start with something that aligns with where you want to ultimately be.

I'm looking at the Realtor posting and the Google Drive by of 20300 Albany St, Detroit, MI. 

Turnkey yes, but it looks inside in some rooms like a poverty palace. Outside looks pretty nice.

So I will just put some random thoughts about it.

They burned every house to the ground across the street, but this side survived unscathed--like a time capsule. So it looks uniform as you drive down the road--I think this is good.

Neighborhood. I would have someone scrape the grass back off the sidewalk where it's overgrown, for the whole block across the street and on the lot. Probably less than $200 (guessing) for a couple of hours work, and if you don't do it, no one will, and the neighborhood will look like its sliding vs being cared about. Plus I think it may draw just a little better renter. 

Also I would pester the city to remove the trees across the street at the between the lot lines (claiming rape hideouts, etc....) to open the whole strip up as a grass park like area where kids could play (more safely than now).

Curb appeal, I would try to remove some of those orange/brown bricks from the rear of the house and cement them up front where they are missing. Scrap all grass back from the sidewalk to make a nice straight edge, and power wash the sidewalk and any grease spots from the driveway to get them as white as possible. I would paint the gas pipe in the front white where the background is white to blend it in. I would NOT paint the front door, blue, red, black or pink.

Interior.  No basement shots (???) is it full of water up to your neck (???) The electrical in those metal conduits looks like the USMC Parris Island boot camp, or an auto body shop not a (HOME). I would have an electrician inspect the entire place, including the shed out back. While it may be rentable as is, I would assume a better renter would look elsewhere due to these conduit lines being exposed, so I would get a bid on having the wiring put inside the walls and the walls repainted.

 Kitchen. Basic kitchen looks rentable, BUT is there a dedicated circuit for a Fridge and a dedicated circuit for a microwave, are there enough outlets to be (modern). Black, white or stainless stove, fridge and range hood, looks good with white cabinets, there are none present--will you have to provide them to be competitive in the area?

 Bath. Substandard Slum looking bathroom. Only 1 bath for a 3 bedroom house, 2 would be optimal, but one will work. I would pull out the old tub and install a shower pan and shower enclosure 36 inches wide by the length of the tub, wide because some people like to eat a lot and a bigger shower means the won't be up against the walls. Those with little ones and babies like bathtubs, you may lose some of those possible renters--so its a judgement call re this.

https://www.homedepot.com/p/reviews/STERLING-Ensemble-32-in-x-60-in-x-74-1-2-in-Shower-Kit-with-Left-Hand-Drain-in-White-72180110-0/205694582/1

I would also put in an elongated power flush toilet and provide a free plunger.

If the vanity is old, I would put in a new one, so the bathroom looks sanitary and nice, because right now it looks raggedy.

Furnace. It looks like it's in a bedroom area (???) Is this code complaint in Detroit (???). Why is it up on the 2nd floor instead of in the basement (???) Why is it sideways (???) 

All of those holes around the ducts should be sealed. Is the furnace located in bedroom number 3, making it into a 2 bedroom rental vs a 3br? 

Those exposed ducts on the floor should not be accessible to renters, their kids will use them for toys and crush them. If the upstairs duct work and furnace are behind a wall with a door separate from the living area I would be ok with that, if not I would look at how to remediate that problem.

If it were mine, (Optimumly) I would want the furnace in the basement and another (at least) half bath upstairs.

I would also have a home inspection down with a written report and have a sewer line scope run, and a roof inspection plus a chimney inspection for cap or flue damage.

Building permits...check to see if they puled these, especially that furnace (why is it sideways (???)

.....So it is turnkey, but seems to have some issues that might limit getting the best renters in there, I like it's looks and the neighborhood looks ok (during the day) drive it at night and see if its a giant block party every night with everyone in the street all night partying and dancing (which could be a plus to some renters).

In reality it might make more money as is than if its fixed up....so consider that too...

A Chrysler Unionized Auto Worker (probably a good renter) could walk to work, and there's a McD's and an Autozone within walking distance too.

Just my 2 cents...

@Justin Thind

OK - I think it's better to stay in better areas

How's that?