Dear Grosses Poches!
I am so happy to join this community!
At work, colleagues often refer to me as "That overzealous real estate French guy...". But I finally found a community of folks from all states, all ages, all religions, all sexes (all 5)...Who share the same passion!
I was born and raised in Paris and came to the best city in the world 10 years ago...Detroit! I can prove you in 2 minutes why metro Detroit is a paradise for investors (now, in 2015).
I caught the RE virus from my parents. They always lived below their means, invested every penny in rental homes but their most admirable deal is something more exotic than anything I've seen or read (so far): they bought a water mill (river La Seine, 2 hours upstream of Paris). So what was the strategy? Buy and hold? Vaca rental? Flip?? No, their strategy was : buy, install a giant water turbine under the house, connect the whole thing to the grid and produce electricity to 150+ households nearby. A big check from the government and a 20 year contract with EDF (national electricity supplier) for 20 years (fixed rate per kWh) and that gives you a better ROI than a 45 unit apartment in the ghetto. No eviction, no vacancy, water will always flow under the bridge (the water mill), EDF sends a check every month (15 years left)
Well, no water mill in Detroit but still, a lot of high cap rate deals for driven investors!
Ok, now my failure stories (so much cooler than success stories, it's like shark bites you can show your dates)
- Couldn't get a loan for my first fourplex because I couldn't get an insurer. The roof was in very bad condition (and the seller didn't want to fix anything). Had to use private money, bought it cash. (Then told insurer I don't need him since no loan...But insured it anyway)
- Paid for 5 appraisals for 5 different fourplexes in the same street in 2014 and purchased NOTHING!!! But I am the valuation king on that street and Zestimate is a jooooke!
- Tried to refinance a single family which has a lease-option tenant. Bank said lease-option = still on the market. Refinancing fell through
- Tried to refinance my first fourplex (that I bought all cash). The bank rejected the appraisal (not adjusted, REJECTED, RE agent never heard that in 30 years) because comps were 2 bedroom fourplexes. I happened to be the only owner of a 1 bedroom fourplex in Michigan that day...
- my first water bill at my first fourplex: $1,872 (leak in basement...). Never buy only one fourplex, buy 2 or more so you can compare water bills.
- Last but not the least: my 2nd fourplex: Fully occupied during appraisal but completely vacant when I got the keys!!! Because of a bed bug issue (all tenants left, whole building needed heat treatment, I was pretty heated myself...)
- And many more...I am not necessarily richer than before I invested in RE but I'd say my life is somewhat richer...I am never bored.
Please send me a message if like me, your parents are source of inspiration and if your love for real estate does not get tarnished by your "love" for bed bugs and dealing with ignorant lenders...(note: I now work with a local lender who is awesome).
I hope to interact with many of you over the rest of my RE journey!
Nico
