All Forum Posts by: Sean McDonagh

@Michael Geiger There are so many markets that people are able to find a dollar in. For me, I've found success in the blue collar suburbs and just recently moved from the flip or land contract sales to the BRRR method and really love the outlook. My biggest hurdle at the moment is funding, that because my properties appraise for under $100k, most hard money lenders don't find it worth it to lend. I've made it work though and average 18-20% ROI.

@Michael Geiger Hi Michael, are you looking at Metro Detroit? I invest in the area with 5 properties at the moment, but still growing and learning a lot. Any specific questions you have?

How do you determine your ROIs?

I buy homes in SE Michigan for under $100k. The upfront returns are great, $85k purchase prices, $12,750 down, make the seller pick up closing costs and I’m generally in for under $15,000 all in up front.

To keep it simple and disregarding any minor repairs, my rents net me on average $3,000/yr.

Is it as simple as $3k / $15k = 20% ROI?

How do you recalculate the ROI after year 1? If I made upgrades of $5k in year 2, does it then recalculate as $6k / $20k = 30%?

Finally... Does anyone not count the pay down on principal when figuring a ROI and only count the Mortgage Interest, Insurance, and Taxes as the "expense?" To me it seems like a LONG term outlook for better gains, but how do I better evaluate that and an I looking to deep into it? Should I keep the simple formula?

Thank in advance folks!

I’m a smaller investor still with 4 properties in my portfolio. What tools are at my disposal when I don’t have enough equity in the properties yet to refi or sell, but my ambitions and drive are pushing me forward, especially with great deals in the winter market? I can afford the down payments, I just have the feeling my debt to income ratio will catch up and banks will eventually not want to lend to me.

At this point I'm still operating as a DBA, but began the switch to move everything over to a newly established LLC. My ROI's range from 12%-22% depending on the property so far.