All Forum Posts by: Account Closed

By being in the business many years!  Taking my profits from flips and real estate sales and investing them into rentals.  

I don't believe in equity. The ''true'' equity is when you need to make a fast sale discounted by 40% then this is the ''true'' equity. I had a lot of equity before 2008 and have less now, but my cash flow is better.

The true wealth is not the equity, the true wealth is the future cash flow that you will be generating discounted at the desired rate of return.

To make 1m net per year, you will need to turn 100 properties per year, and make 20k on each, pay overhead and taxes and you will get 1m.

Or you can buy a distressed apartment building, fix it up, rent it out and refinance at CAP of 6% and pull the cash out. You will not need to pay taxes on refi and you will have your million.

Now, to get 1 million at refi, you will need to get a building which will produce 90k net per year. At 6% CAP the value of the building will be 1.5m.

The bank will refi the loan at 75% LTV and you will get $1,125,000 at closing minus closing cost. Now calculate for how much you need to buy the building and how much you need to spend to get a future value of the building at 1.5M. Next find this building.

I normally would agree with you Joe, but all the problems that began in Detroit, has now spread to other communities.  

It began with Detroit spreading to 8 Mile Road.  Anything East of 8 Mile Road was bad news.

My husband and I also owned properties in Inkster, and the same thing happened there. The court system was a joke.  The Judge didn't show up half the time.  And she went the extra mile to give the tenant a chance.  Our court appointment was for 8:30 am. and the Judge made us wait until 5:00 pm. to see if the tenant would show or not.  When the tenant didn't show, the Judge said it was a shame that the didn't show to tell her side of the story. 

I was almost arrested by the Bailiff there, because the Bailiff was telling our tenants how to stay in our rental property longer.  Giving the Tenant legal Advice.  I told the Bailiff, "Hey you shouldn't be telling them that", and he told me to get out of the court room or he'd arrest me.   

As the boundry line of Detroit spreads to other counties, it gradually adapts the same scenario.  You can't expect people who have been born in a crime zone, to  automatically become Saints.  They bring with them, survival mechanisms, and friends that are not so nice. They lived a way that they had to live, the way they were raised, the way the laws allowed them to live, and do the things they were allowed to do. 

If you know  Wixom/Walled Lake Area.  (30 miles outside of Detroit, close to where I live) There is an apartment complex that is pretty large, and there are continuous break in's, fires, etc. There is drama every week.  

So at one time I would agree with you Joe,  And we did buy neighborhoods, to try to help. So we physically did buy across the street, and we did buy in other counties, but if you have the same type of tenants, and courts to deal with, then you've accomplished nothing.  

I don't wish to sound mean, or bitter.  But it's a shame what I've seen!  I cry out to help others and some will listen and some will not.  

How can I look myself in the mirror if I don't inform others of what I've seen, what I've lived, what I've experienced. 

Why would I say the things that I say, if it wasn't true.  What benefit would I get for doing so, other than helping someone else to be a successful landlord in some place other than Detroit, or it's outlining areas in some instances. 

Nancy Neville