Shelby Park is getting a facelift from many investors (myself included) and Smoketown is the next neighborhood in line if you're looking for an affordable price point with future growth.

Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

I'm offended that nobody included me in in this conversation.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Even with that, I think we will still be way ahead. 2 bed, 1 bath, 1200sq/ft, detached 1 car garagePurchase Price: $38,000Repairs: $20,000ARV: $96,000 (based off Zillow, but a local real estate agent thought that was pretty accurate)Mortgage: $430Insurance: $55Trash Included: $25Rent: $1,000We are now going through applications for our first tenant. 

You can include moving and storage costs in the charges.

We built two homes side by side on infill lots with a lot value of $20k each and hard construction costs of $196k (builder’s fee not included).

Alternatives include seller financing, a lease option, or using an LLC or trust to structure the deal while maintaining tax benefits.

This option minimizes taxes while allowing more flexibility to reinvest without 1031 restrictions.Option C: Sell Now Without the ExclusionSelling immediately means paying capital gains tax on the entire gain, including depreciation recapture, making this the least tax-efficient option.Additional Considerations:HELOC or Cash-Out Refi: If you want to keep the rental while accessing equity for your retirement home, consider a HELOC or cash-out refinance instead of selling.Estate Planning: If you hold the property until passing it to heirs, they receive a step-up in basis, eliminating capital gains taxes entirely.For tax efficiency, staying two more years allows you to partially exclude capital gains, while a 1031 exchange defers taxes if you plan to continue investing in rental properties.This post does not create a CPA-Client relationship.