All Forum Posts by: Marvin Rice

Welcome to the ride! Which part of Michigan are you investing in? I actually started investing with some gut jobs too! I work as a Project Manager for an electrical contractor so I have always been comfortable with the construction side of things.

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Originally posted by @JR T.:

@Devan - your cash price was $35,000 you are now paying $50,000 because he agreed to let you make 100 payments over time of $500 per month. The extra $15,000 you're paying over your cash offer is your cost of capital - otherwise known as interest. You allowed your seller to roll all of your interest into the principal - which is disadvantageous to you for all of the reasons I outlined above. I gave you some good advice on how to better structure your future deals that will reduce your carrying costs and save you significant money in a refi or resale. Read what I told you carefully. Good night.

Ok...this is a very interesting discussion. I see both points of view on this but I am not sure which is the strongest structure. @JR T would structuring the deal with the 9% interest have an affect on taxes?

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Originally posted by @Karen O.:

Since he lives there, and plans to stay, maybe he'd be open to playing the role of PM? I say that tentatively because it would be unfortunate if you and he didn't see eye to eye, but if you're dealing with similar units, he's already there, and he'd get paid for his trouble helping to feather his retirement nest. Might be worth asking. Worse that happens is he says no.

I like that idea. I am going to pursue that angle. After all...he is an experienced investor.

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Originally posted by @Karen O.:

Marvin, can we assume your friend, whom you first approached, isn't using a PM they'd recommend? Or they live closer and/or are self managing?

He actually lives there (not in the building) and self manages. Owns it free and clear which is why I was hoping to get favorable terms out of him but that is his retirement plan. I am sure he can connect me with some people. Now that you brought it up, he might even be able to help in a pinch. He does all his own repairs. I only am considering self managing for a short time so I can get a good feel for the tenants and units. I would look to turn over to PM for the long term.

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Originally posted by @Thomas S.:

An hr. is not uncommon or unrealistic. What is not realistic is buying your first property by falling into it, although common.

If you are planning on owning investment properties start by developing a teal of agent legal, accountant etc. and research contractors in the areas you are interested in. Join the local real estate investors club and make the contacts. Once you are ready to go it doesn't matter how far away it is.

If your not ready to be a landlord the next block over may not even work.

I usually make it a policy not to feed the trolls but here you go:

I'm not sure why you are under the impression that this is my first property. I have never owned a rental property outside of Detroit and that is why I asked the question about distance. I didn't fall into anything. I was trying to see if my coworker was interested in selling his multi-unit and he offered up what some people would call a lead.

I have all that infrastructure in place where I live (but not in teal) and not there, but I know how to develop a team.

Perhaps you weren't trying to be condescending. If not...my bad. The only constructive thing you gave me was "An hr. is not uncommon or unrealistic". I will take that and run with it...

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That is a very typical situation in the D. That is why some people like buying in the D. The properties cost next to nothing and the rent is high. You can make your money back very quickly if all goes well. I'm not sure there is a way to get in the middle of those type of deals. If you want to be the investor, there are definitely ways you can make good money and mitigate the risk.

1 Vote

Originally posted by @Colleen F.:

It depends. When can you take calls? Can you respond to someone within a couple of hours by phone? Are you able to take a day off now and then? What are you going to run down there and do? are you going to do showings? Are you going to fix things? what are you going to fix?

We are an hour and a half. I have used a PM and I have not used a PM. While there is a utility to using a PM it is most helpful in the showing phase and taking inconvenient phone calls. A PM is going to go over there to show to prospective tenants and maybe occasionally for an inspection, they don't fix things. They will get a repair person out there. So if it is a decent area with good tenants it is doable being an hour away if you have some flexibility and don't mind the work, it isn't a completely passive activity. You will need to do things when they are inconvenient, you will need to identify key trusted repair people and get them to respond to you, you will lose some nights and weekends especially in the beginning.

The positive is if you know your properties you can learn to avoid calls. If you know your tenants you will learn which calls you get are important. In the end you can profit from the education as well monetarily. All that being said the main reason to use a property manager isn't distance--- it is because you can't/don't want to deal with tenants and that is fine too - just know yourself.

I have enough flexibility to take calls and occasionally leave but I am sure if I do it too much, my employer would be somewhere south of pleased.

I don't have enough specifics yet about the area and tenant pool but I take from you statements that if the area is good with good tenants it shouldn't be so bad. Less desirable area and I would have to be prepared to sacrifice time and sleep. But I love sleep!

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Originally posted by @John Van Uytven:

@Marvin Rice

Since you are asking I am assuming you don't have connections over in that area?

What about a handyman to take care of minor issues?
Would you want to scale in that area to make it more worth your time?

Personally I currently live in the country and if I want to buy something with any bite to it. I will need to travel an hour or more away. I will need to scale in my next city.

I don't know the entire situation, but I say it is definitely worth a look.

Good luck and remember

*DFTBA*
Don't Forget To Be Awesome

No connections. This was referred to me by a coworker that owns a 6 unit there. I had asked him if he was thinking about selling and he wasn't but he gave me the number of a relative that mentioned wanting to unload his 2 duplexes. Doesn't like land lording.

I would have to find someone local I could call. If I did buy these, I would start actively buying in the area with the long term plan of handing them over to a PM. It would give me time to vet the local PM's.

DFTBA - You tryin to start the newest cultural trend here!?!

BTW....I NEVER forget to be AWESOME!

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Is an hour away from home too far away to invest while holding a full time job?

I have been presented to opportunity to buy a couple duplexes an hour away but I am wondering if it would work without hiring a PM. Anyone's opinions would be appreciated.

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Why not a long term low rent lease (maybe 5 years) and you sublet. You could control the property for say a couple hundred bucks a month and you can rent it for several hundred more, The owner makes a little money every month whether it is occupied or not and you don't have control with no money down. and low risk

2 Votes

All Forum Posts by: Marvin Rice

Marvin Rice has started 6 posts and replied 50 times.

Post: New Investor and BP Member

Post: 1st owner financing deal!

Post: Is An Hour Away Too Far While Working 9-5?

Post: Is An Hour Away Too Far While Working 9-5?

Post: Is An Hour Away Too Far While Working 9-5?

Post: Detroit Properties

Post: Is An Hour Away Too Far While Working 9-5?

Post: Is An Hour Away Too Far While Working 9-5?

Post: Is An Hour Away Too Far While Working 9-5?

Post: Potential deal atop the bar?!?!