All Forum Posts by: Peter Grosso

This is for one property, but I own five and help another owner with two so this could lead to a full move over of my properties.

Anyone know one that does quality work? 

I would say to anyone who want to buy a house in Detroit that is not turn key.  You can make a great return but there will be scarifies and challenges.   

1. is finding the right house, on the right block.  You can only make your house look so good, you will have to rely on your neighbors a bit to attract tenants.  Find areas that are either lived in or being bought up.   I had one house that was on the market for a year because it was on a lonely block.  Today that block is much better but I had to pay an extra year in taxes and insurance while I waited.

2. Break ins- While you are waiting to rent the house I would tell you to take the faces off the new cabinets, and take all the appliances out and make friends with the neighbors.  Your neighbors don't like the crime either, if they know you are there to make the area better then they will look out for your property. 

3. Get ready for picky tenants, there are a lot of investors in Detroit that want renters and they know it.  We provide a great product, but it can still take months event with everything right with the house and the neighborhood.  The tenants generally don't damage the houses, but the economy outside of downtown Detroit is still rough and people may stop paying and you have to start again. 

4.  Section 8 is great but expect to wait months for them to approve you.  I believe the section 8 inspectors are also property managers.  They want to keep you down and their properties ahead of yours.  They will pick out any minor thing they can use to have to comeback again next month. 

5. Taxes can be high, $2000-$3000 a year (Mayor is trying to lower them).   

Upside-

1.Once it is rented to a good tenant the returns are great

2.There are staggering improvements in the neighborhoods every year and I believe this Mayor is going to speed up this process.  So both property values are going to go up and the issues above may get less troublesome.

3.Houses are being destroyed and a fast pace.  The potential competition is being destroyed everyday.  With a goal of rightsizing the ratio of homes to occupants things can only get more profitable for both turn-key and ground up buyers.  

4. The downtown area is almost completely occupied, potently having people moving outwardly.  Much like a packed Manhattan pushed people into Queens and Brooklyn and prices shot way up. 

Bottom line is if you invest in Detroit have  long term expectations. 

I have owned several properties in Rochester.  I can tell you that John Nacca's office does a great job on evictions (or anything else).   

@Linda Reynolds  Linda I am really sorry you had that experience.   I can only say that I have had the opposite experience with the people of Detroit.   I haven't never felt like I was in any danger, I haven't heard of any of my management or their employees having any incidents.   I have had break-in's for the unoccupied, but we don't leave anything for them to take.   I have seen big changes in the two years I have been out there, seems to be a lot of people with the same Idea that we have.      

We own a apartment building in the Pelham Park area that we are renovating, we are seeing a lot of investors doing same thing all around us.  

I made a big bet on Detroit, I bought 25 properties at rock bottom prices.  I am currently renovating all of them with the plan of renting them and holding them for at least ten years. 
I love the people of Detroit and it really bugs me when people speak poorly of them.  I have found that most people that I meet that still own their homes work really hard to keep their neighborhood clean.   The vandalism risks and the break-ins are much greater before a property is occupied, but that is what insurance is for.     I am proud to be a part of the recovery, and I hope I can say I got rich betting on these great people. 

@Raymond B.   Thanks for the lesson.  

@Steve Babiak  Normally I would Steve, however I had some reservations in this situation.  I own several what could be known as "D" properties in the area.  My property manager does an OK job of making sure they are up to date and comply with code.  I don't however trust him in this house doing any work that is to the quality of the house.   I live seven hours away and plan on making those connections soon.  But with the birth of my newborn I was trying to postpone that trip.    I really like this tenant and want to provide her with a great home to live in, but I since she can only pay $900 instead of $1000 a month and I don't have the contacts or the time yet to make the place nicer I thought I would give her the money and the freedom to make herself comfortable however she chooses.  Even if it is a big screen T.V.  As long as she was happy, and I was getting my rent (section 8) I would be would have bought a year at least to make the proper contacts. 

@Sylvia B- I don't want them to do whatever they want, I know they will stay there at least a year.   I don't care if they replace the carpets or not, everything is in good working order.  It could use a refresh.  My thought process is that the tenants are already committed to living in that place.  I could put $2,000 into the small updates that I would normally do, or give them $1,000 dollars and when they move out in two years I can make those upgrades once instead of twice. 

Hello all, 

    Just bought a new property and I decided to move in a tenant from another property that I own because she is not comfortable with the neighbors.  The new place could probably rent for $1,000 a month but my reliable tenant can only pay $900.  I have to change the carpets and do some other nonstructural updates like painting and sanding.   

I am thinking about just offering my tenant $1,000 cash to do whatever updates they want and to leave me alone.   Anybody ever do this?  If I do it, how do I classify this expense when tax time comes? 

I am ready to find a new area to own rental properties. The places I own in now I definitely made some mistakes in getting to know what is good and bad in the market. Is there a system to get to know a new market that I should learn?  

OK, guys.  I really appreciate the advice.   Perhaps my followup question belongs on a different thread(might do that anyway), The markets that I am in, I learned on my own.  I definitely made some mistakes in getting to know what is good and bad in the markets, how to get the best price points.  Is there a system to get to know a new market that I should learn?