All Forum Posts by: Matt Souza

The 100k renovation number seems a little low for a full rehab of 4 units. You will also want to factor in holding costs, in addition to the missing CapEx and vacancy costs as noted above. I would be less worried about Cap Rate on a 4-unit and more focused on cash flow and ROI, but that's just me. Good luck!

Hi @Kris H., welcome to BP.

I invest in the Metro Detroit area. Inkster is definitely on the lower end of Metro cities for investing, but there is still potential. That said, I have three things to note about your property analysis:

1. Rent - $850 seems a little high for the area you are looking at. I would estimate closer to $750 in rent, $800 max. Always best to err on the conservative side.
2. CapEx/Repairs - you mention the condition of the furnace, roof, and water heater, but still need to account for unplanned expenses. On an older home, I typically budget around 15% of gross rents for capital expenditures and repairs.
3. Water - most of the time tenant's will pay for water in SFHs. Yes, the city can hold a lien on your property for unpaid water/sewage bills, but this just means you need to keep on eye on it. You can either pay the water and charge the tenant, or have them pay and get a second copy from the city.

Just my two-cents. Feel free to reach out to me directly with any other questions. Good luck!

Hi Ralph Noack , welcome to BP! I would suggest looking more towards Detroit, I see more opportunity and upside there (may be slightly biased, since that's where I invest). Metro Detroit has a lot of high return, safe, blue collar areas. The city requires much more attention as neighbors vary block to block. You would likely need some boots on the ground for that. That said, Grand Rapids is a good area too. Jobs are coming in, the city is growing, so the suburbs are good place to invest as well. I just think GR is going to have slower growth over the next few years than Detroit will, as Detroit seems to be on the rebound. Good luck! Let me know if you want to know more about Metro Detroit.

Hi Sarah! I invest in the Metro Detroit area, glad you are looking to join the club. Feel free to reach out with any questions. Best of luck!

@Account Closed

Thank you both for the insight, it helps a lot!

Uzair, I think we are going to go with a structure similar to yours. My property is not far from Plymouth, let me know if you want to connect sometime.

Thanks!

Hey @Ryan Garza

I live in Ann Arbor and am relatively new to the REI world as well. I am about to close on my first SFH rental property, would be happy to share my experience. Let me know if you want to connect. Best of luck!

Hey BP!

I am a new real estate investor about to close on my first rental property in Metro Detroit! I also have a couple other deals in the pipeline, so I want to make sure I have the partnership structure that will benefit my partner and I the most.

My plan is to join partners with my brother and start a real estate investment vehicle that buy-and-holds SFHs and multifamily properties. We are starting with SFHs just to get a few deals under out belts, create processes, and learn more about REI.

Our problem is we are not sure how to structure our partnership that will give us the most benefit. An LLC would be great for liability protection, separating our personal finances, and for easily tracking equity. The downside is we would miss out on leveraging better loan terms through conventional financing (as opposed to commercial). If we each start to put properties in our own individual names to capture the conventional financing benefits, then equity and profit sharing starts to get a little murky.

Does anyone have experience with this type of partnership? Any advice you could offer someone new to the REI world? Any feedback would be greatly appreciated.

Thanks!

Hi @Joe Mazur

I know I am a little late on this thread, but I could use a good title company in Metro Detroit too. Mind sending me the info?

Thanks

Hi @Hong Ahn

I live near Metro Detroit and invest in that area, glad to hear you joined the club. What area did you buy in? Care to share your numbers?

Feel free to connect with me, I would be happy to help with boots on the ground.

@Diego Ortega Glad to hear you are having success in the Ferndale area. Keep us posted on the flip went!

@Carson M. I am definitely interested in looking at the place you are selling in Ferndale. PM me and we can talk more.