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All Forum Posts by: Richard Dunlop

Richard Dunlop has started 7 posts and replied 715 times.

Post: Acquiring Rentals in an Appreciating Market

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461
Originally posted by @Russell Brazil:

I dont know anything about San Antonio, but unless it is a dying city like Detroit...

Stop reading the 10 year old newspaper strips your mother put in your outhouse for toilet paper. I'll pay for a magazine subscription for you so you can catch up with what the rest of the world already knows about Detroit. 

@Nick Rose Welcome to BP

@Joe Villeneuve is a good contact in your area with some innovative strategies

Post: Advice with rental home

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461
Originally posted by @Chris Conner:

Yeah the rent can be anywhere from 1600-1800. The new payments will be around 700 with the refi...

The new payment will be way higher than $700.

If your taxes on an owner occupied property are at $8000, then the taxes alone on a rental house will be more than $700 per month.

(Taxes are the "T" part of the PITI)

Post: Having a hard time with this decision.

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461
Originally posted by @Ken Cooper:

@Richard Dunlop

Yes the margins are small, but I am also going to be living in the property.  I could not invest the 218k in Detroit, because then I would not have a place to live.. I will be on the hook for 1 million dollars...

Will it be worth more than it is today at some point in the next 20 years?  YES

Are we at the TOP of this run?  NO

How much higher will it go before it drops?         ??????

Can you survive the 10 years out of the next 20 that it could well be worth less than you are paying?

If the decline starts in 1 year? (It won't)

If the decline starts in 3 years?

If the decline starts in 5 years?

I think the California market is good for the long term

Post: How Accurate Is The 2% Rule?

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461

@David Lowe As @Brent Coombs alludes to there are many markets where 2% would be laughed at as being way too low.

I lived in San Diego for several years and loved it but as a RE investment location you are trying to time the market and make sure you have gained enough appreciation to make the property worth holding through the downturns.

Long term investors have done well but are prices going to rise 10% per year for the next 5 years? Or only 2 years? Will it then drop 30% over the next 5 years?

I relocated from Orange County CA because of the opportunities in Detroit and Detroit suburbs.

I like the Detroit market where the cash flow beats all other markets AND the appreciation is second to none. 

Post: Having a hard time with this decision.

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461
Originally posted by @Ken Cooper:

@Richard Dunlop I believe that the market forces that are driving the Southern California market are strong ...

...I have lived in this area for 10 years, and have not seen any properties have to deal with long term vacancies.

I don't think the Southern CA market is a bad market I just could not have made a living there if I were to rely on REI.

The link I posted was a CA investor's line by line account of the 5 years it took him to get the squatters out of his CA house. I asked if you could survive the downturn? We can hope it is still 5 years away. Or a vacancy/nonpaying tenant/eviction?

Your margins are small. (I get criticized every time I point this out but) The $218,000 you are putting down would provide a better than $10,000 PER MONTH positive cash flow in Detroit and Detroit suburbs without taking on new debt.

You are counting on your savings of $200 per month (if everything goes perfectly) and getting in debt to the tune of almost ONE MILLION DOLLARS.

Originally posted by @Adam Sherritt:

Hey guys, 

So I've heard this rumor that the goal in real estate is to actually make money.  With that being said I am very confused as to how this deal would make sense to anyone. 

Wrong market unless your goal is to assist your grandkids in their retirement.

(From your picture it looks like your grandkids will probably retire in 70-80 years)

Post: Having a hard time with this decision.

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461
Originally posted by @Ken Cooper:

I am in escrow for a Triplex in Redondo Beach California...I am very conflicted...Any advice would be very appreciated.

I guess it boils down to your evaluation of the continuing  appreciation in the California markets. 

If you are right maybe you have 20% more upside before the next downturn.

Can you sustain the property with a long vacancy in one of the other units?

See this thread from a California Land Lord

I left the CA market because the values did not make sense to me, but long term investors have done great over the past decades.  My opinion only is that eventually properties out price the ability of tenants to rent and the appreciation you are hoping for slows or stops.

Post: Good cap rate even with high expenses

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461

I'm not in Flint and don't follow it too closely, but I believe most or all of Flint is on Detroit water NOW. 

The damage was done while it was switched temporarily to Flint river corrosive water.  The water cause a deterioration in the lining of the pipes to where now Lead leeches into the water even though the corrosive water is no longer being used.

The solution requires replacing the pipes not just switching back to a good water supply.

Post: 17 year old looking for advice.

Richard DunlopPosted
  • Investor
  • Detroit, MI
  • Posts 755
  • Votes 461

The "age of majority" is 18 in the US, but you can be invested in RE with your parents approval and support.  Are any of your relatives investors that would let you partner on as part of a purchase?  

There are many markets in the US where no loan is needed.