All Forum Posts by: Paul S.

Those numbers look good on paper. I'm curious to see what the actual return is after five years. Lower-income renters tend to generate significantly higher maintenance and turnover costs.

@Michelle Hagewood Be careful of how you set your expectations.

When I first got involved with RE investing 20+ years ago, all the successful investors I met told me the same thing: 

1) Write 100 offers

2) 5-10 may get accepted

3) Only 1-2 will close

It takes a lot of work to find actual deals - or you can just buy something that will really be just an expensive hobby.

Here's some other info that you might find useful:

In our OPINION (always verify yourself!):

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenants: Majority will have FICO scores of 680+.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenants: Majority will have FICO scores of 620+, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should often be used to also cover nonpayment & evictions.
Tenants: majority will have FICO scores of 560-600, many blemishes, but should have no evictions in last 2 years. Verifying previous 2-years of rental history very important!

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenants: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

I'm interested in investing in cheaper properties for Section 8 buy & hold, and the numbers/inventory are almost suspiciously attractive in Detroit, MI.

A lot of BP posts and threads, as well as a few google searches, warn a lot about scams, agents misrepresenting 'turnkey' properties, crooked PM companies, a slow HA office, and very high crime. 

How much of this is exaggeration? Has anyone on this forum successfully done OOS investing in Detroit? 

How relatively difficult (compared to ex. Ohio) is it to evict a troublesome tenant in Detroit? 

Aloha,

Thanks to BiggerPockets, I been educating myself with a abundance of information from BiggerPocket youtube videos and these forums. I been doing market analysis for homes in Detroit, MI and found a few that are above 8-12% CoC ROI. Are there any investors who have real estate in Detroit and what are your thoughts of investing in Detroit? Thank you.

Hello everyone!! I’m a brand new investor been hanging out around BP for about a year and am finally ready to begin my investor journey to financial freedom. I do not have a team and need help networking. I have been self educating with books and podcast and webinars over the last year. Just last month I made the upgrade to pro to start using calculators and taking action. I think I may have found my first deal in Detroit. Problem is I live in California. My reason for the post is to get help finding agent putting together my team and getting my first deal done. What is the best way to network and build a team out of state?

I heard a theory recently from a preparedness community that dead/dying cities such as Detroit are likely going to be revived and have manufacturing brought back to the U.S. due to current events. I'm sure we all know there are some bad areas there, but what are the chances it becomes prosperous in the near-mid term future? I see some properties that could be absolute gold mines if it were too go that way, and if not it's a small cost to pay as a gamble. I'm just wondering if the sentiment of it possibly coming back to life is more wide spread than preppers and other small pockets of folks. What's the likelihood of a cheap property now turning into a gold mine over the upcoming years?

@Paul S. We've looked into suing the 36th District Court and have been told it would cost minumum of $100k and take 2 years minimum:(