All Forum Posts by: Mica Moore

 Good to hear.  It's good to know that that large of a complex will need intense oversight, management, and maintenance.  Some newbies seem to overlook or underestimate this.  I also recommend that you don't be a stranger to the management/maintenance team either -- regular contact & inspection and keeping tabs is always a good idea as things can go downhill fast.  Best of luck to you.

I hope that for that many units you have an onsite management team.

Depends.  What is the current rental market climate (will you have a high or low vacancy rate)?  What is the profitable rent range for you (& is it attainable in the current market)?  How good is the tenant? 

For good tenants who meet the three basic requirements of desirability (1. Pay rent on time, every time  2. Keeps property clean & safe (non-destructive) & 3. Doesn't disturb other tenants/neighbors (no parties, legal issues, neighborhood drama, etc.) - I would bend over backwards to keep them happy, and give them a discount (as long as I am still profitable).

I would not penalize anyone. I would handle it like this: The husband can get out of the lease with no penalty, except he loses rights to the property (lease) and he loses any claim on the security deposit (they can fight over that in their personal life).  The security deposit remains with the existing tenant - the wife and a new lease is signed with wife only.  There will be no rent reductions.  If the wife  can afford to pay the rent then she can stay.  If she can't then she is out and you find another tenant. 

It's amazing how people think a landlord should subsidized their life circumstances -- do not give her an inch she will take a mile.  If she can pay, she stays, if not she is gone.  That's what I would do.  I feel like if you try to penalize the husband then you are taking sides and giving the wife ammo to try to get cheap rent - and she will continue to be burdensome. He showed his responsibility by paying partial rent for a place he was not living in -- he served his time & gets to go a free man.

1. Wife signs a new lease (if she can afford it).

OR

2. They both vacate the property, you keep the deposit because the lease is broken, and you find new tenants.

So a $30K gain in 3 months.  How much do you get to keep after taxes and expenses?

@Kent Hall.  Yes, yes I know.  The point is there must be a reason it looks good on paper -- I wonder what the reality is.

This is subjective, I know and I am not saying there is zero  possibility of a good outcome but the odds are stacked against you-- but something to think about:

Detroit is the textbook example of the worst real estate market in America.  The city has a long history of racial, crime (murder/drugs etc.)  and employment issues. Think about this:  what kind of tenant who has no job is going to be able to maintain the property and pay rent on time? 

Some investors like section 8 tenants (pays the rent) but you will at least have triple the maintenance costs. Tenants who don't have to pay rent from their own pocket also don't have the mentality to keep the property clean and safe - usually the opposite. They tend to have no problem using it as a trash can (at your expense).

Do your homework!  Your research should reveal most of the issues.  I know it looks like easy money, but it actually looks like money in the toilet.  

 I would be interested in learning about your success with Detroit.  All my research has pointed to avoiding it like the plague (have never heard one good thing about it). I have heard that they can't even give most of the property  away for free, that they would be better off being burned down. Jobs are scarce and people are isolated and live in very very bad conditions = no (obvious) growth potential. It's presented as the quintessential wasteland of America -- it could not get any worse - the benchmark for the bottom.  I have never been there, but I have done extensive reading and speaking with others who have been there and have invested there. Have you found something better than the rumors?

Texas sounds like a good idea...until you see their property taxes.  That kind of did me in from considering TX.

If you are a cash buyer why waste your time with MLS listings (where the competition is)? Do some DIY ground work and buy without realtors. Define the parameters of your ideal property (location, size, condition ,etc.) and go to the title company and ask for an owners lists of matching properties. Contact owners directly and ask if they are interested in selling to you, a cash buyer.