All Forum Posts by: Roy Gutierrez

Thanks for sharing this situation @Roy Gutierrez.   I am researching prior forums on boyfriend / girlfriend tenant issues to see if anything fits the scenario that I am about to post.  

City- Oak Park, Michigan

Purchase- 85,000 from a wholesaler.

Rehab- 26,000 plus 3,000 allocated company overhead

ARV- 180,000

Rent- $1600/month

I'm very happy how this one turned out! I purchased it while rehabbing a nearly identical home across the street (I picked that one up for 60k.)  I own three homes a few blocks over.  Those homes are bigger yet only get $1,150/month with long term tenants.  Time to up some rents!

I grossly underestimated maintenance and make ready costs for my KCMO portfolio. Operating costs are through the roof and net income is non-existent in my first year of business. 

I started with 2 SFH turnkeys which have performed well but then I bought 3 duplexes that are crushing my cash flow. All properties had a 3rd party inspection but between evictions, capex costs, and turnover costs my business will be losing money in 2020.

I think I scaled too quickly. 1 unit total in 2019, 7 more in 2020 for a total of 8 in <12months. I underestimated the amount of reserves I'll need to ensure my portfolio pays for itself. 7 of the 8 properties exceed the 1% rule and appreciation is happening in KCMO. 

I keep telling myself its 'a long game' but it sure feels like I'm doing something wrong. 

I'm on writing this to share my personal experience, these are fantastic lessons I'm learning but it wasn't how I envisioned year 1 going. 

I have an offer in on a property that is currently a motel. The plan is to convert it into apartments, studio and 1 bed. In looking at Airbnb and VRBO there are clusters 20 miles north and south, but nothing local. It's a town of about 9,000. I'm trying to figure out if it's worth doing Airbnb with a unit or two. I believe it would be more of a hotel alternative than a destination vacation business model. County ordinances do limit me to a 2 night minimum though. Has anyone has success with this type of situation?

Female Property Investors/Landlords. I need your advice. If you are doing this on your own. By that, I mean, no male figure next to you that is your father, boyfriend, husband, brother, cousin. If you have none of these people by your side and you are in this business, I really need your advice because I'm on the verge of selling everything. It has all come to be so stressful, being taken advantage of, imposter syndrome. I don't want to play the victim card but I don't know if this is a sign to head in another direction. If you are or have been in the same position at one time please let me know what you've done to stick with it or if indeed you did move on, what was it. Thanks.

 Courtney, you will NOT receive a warm welcome in Detroit - this market is not for the faint of heart.  Contrary to all the "Come back city" puff pieces that run in clueless publications this market is not the utopia they portray.  Over 90% of investors fail here... OOS numbers are much higher.  You will NOT find a good PM here - you will go through several while being fleeced and frauded the whole way causing you to hemorrhage cash.  Renovation contractors will not be any kinder.  If you do not have boots on the ground (YOUR boots) the tenant base here will eat you alive.  The court system is set up for you to fail and the locals know how to use it to their advantage. There is a reason this city has been a desolate wasteland for almost 60 years. There is tons of money to be made in Detroit if you are as tough as the city itself... most are not and just pile on the bodies of past investors.

@Roy Gutierrez thank you for your feedback. Do you know of any good lenders/investors for rehabbing and investment property?

@Roy Gutierrez thank you for your feedback. Do you know of any good lenders/investors for rehabbing and investment property?