All Forum Posts by: Rodolfo Goncalves

@Michael Plante Not in Michigan

There is no need to open a dedicated account, as long as you make it clear where the funds are deposited. I usually put a note in the rental agreement such as "Security deposit to be held at XYZ bank, account 1234". But of course, always run your contract by a lawyer.

Here is my OPINION from 1000 ft in the air.

I agree with @Greg Scott. If you have the means to build something, getting rid of the condemned building and starting from scratch might be a wise move. You can pay $10k to have the house demolished instead of spending $50k to get it fixed. Or just sell it and swallow the loss (there is no shame here, only learning experiences). Unless you are a contractor yourself, building anything at this moment (and who knows for how long) is too expensive to make it worth it as a investment. If you add to a lets say 100 years old building, your new building will be years old in the county records. 

If you decide to go with the renovation and your intention is to rent it out, you also have to consider the market for this kind of property. Kalamazoo has a surplus of cheap older multifamily homes, so I assume they are not worth it as investments for landlords due to low rent prices. How does a renovated property will perform in this depressed rental market? What about if you get a $300k mortgage to renovate it or add-on and you have to sell it in a few years? Can you get your money back?

Of course, there are always opportunities hidden in every situation. You might do your OWN research / due diligence and discover that adding on to the property is a the way to go. Good luck!

I worked with David Soble to do my LLC operating agreement and three deed transfers. Google "Soble Law".

Prices for purchase in Westland are between $150k and $200k. You can find lower prices if you are willing to invest 20-30K in rehabs. There are no rental houses in the market; listings stay up for a couple of days or less. You probably can get 1% rent, maybe a little more. North of Palmer is a good location overall for rent, with lower purchase prices. If you have more money available, stay north of Cherry Hill. Regarding the demographics, it is mostly comprised of blue collar workers employed at many of the surrounding companies. A good example is Ford in Wayne, Amazon in Romulus, and a LOT of healthcare workers. I have two houses in Inkster, close to Cherry Hill where there is a stretch of well taken care homes, rented for $1200. The last one (tenants moved a week ago) had 52 applicants and 90% at least were qualified. In my analysis, the whole region is a hot market for rentals and you can't go wrong. My only concern is finding a good property management company that is both landlord and tenant friendly. I hear a lot of horror stories from both sides... Good luck.

I second @Sam Hecht, a personal loan or some line of credit is the way to go for low-value properties. I am having difficulties financing anything below $100k for investment.  

Of course there will always be opportunities, but I personally don't even bother pursuing anything in Ann Arbor (mainly) / Dexter / Saline / Chelsea / Brighton / Whitmore Lake / South Lyon . Prices are over-inflated and the competition is watching the market like hawks. I also see a lot of people / companies with a lot of money buying these over-priced properties for speculation. Since you mentioned wholesaling, I believe that the only feasible opportunities will come from off-market deals. I recently discussed the market situation with a few wholesalers and they told me there is not much going on. I am mainly focused in Wayne County now; no home-runs but a steady flow of inventory. Good luck with your move and settling in the area.

Start by reading 3 books, in this sequence: 1- I Will Teach You to be Rich, 2- Set for Life, 3- Rich Dad, Poor Dad. These books should give you enough food for thought and keep you going for a while. You are in the right path if you are already asking these questions. 

I am not an expert in land buying but I recently explored the possibility of buying cheap land and to build SFHs for rental. I could not make the numbers work. Here are my thoughts.

First, let's start with some questions to brainstorm the case: Who would your buyer be? Someone with cash to pay for the land and downpayment in a construction loan, right? Probably someone in the upper middle class. How desirable Is the location? Does it have a good school system?  Is the property in city water or will it need a well? If it needs a well, did it perc? 

In my experience, if the house is worth round 300k, 1 acre in rural area would be max 40k. Your comps may be around 260-280, but at this moment, construction prices are through the roof. The current market situation, where used houses are reaching prices of new construction, can work in your favor. The electrical and septic (if it is in good condition) are a good selling point.

If I were the buyer and really wanted that lot, the trailer and barn would not be a problem. Considering that I would be shelling out at least 300k to build a house, removing these structures would be a fraction of the total cost. As a wholesaler I would not worry about these structures, the buyer might even want the "freebies".

Excellent plan! My son is starting college in the Fall and we are looking for a house to buy so he can share with a few roommates. Here are a few tips:

1. Narrow your search area and get familiar with the market

2. Find a lender and get pre-approved for a loan (you will need a W2 job from either you or a co-signer)

3. Find a good realtor that understands what you are looking for

4. Setup an automatic search alert and be prepared to act fast. Affordable MFH are not common in Michigan, unless you are in Detroit. There is a lot of people scanning the MLS waiting for a MFH to hit the market. Your chances of getting an offer accepted as first time buyer are slim, but you have to get used to the game. Patience and persistence is key here.

5. Always send an offer with at least home inspection and lending contingencies. 

DM me if you have any specific questions and good luck!