Real Estate General

I bought my first 2 properties via foreclosure auction at the age of 17.

I flipped both and bought my rentals

I didnt refi anything because i cashed out all my properties - I was buying in post 2008 detroit so shit was literally like 500 each.

If you can find multifamily at a good deal i would totally invest in that - i only have sfh but its my dream to buy up a few quads

Opportunity zones are low income census tracts. Detroit has a bunch, here's a map opportunitydb.com/tools/map/

Basic idea is you invest capital gains in a business in these areas (doesn't have to be RE but it seems simplest) and you don't have to pay tax on the invested gain until tax year 2026, so pay in 2027 (or whenever you liquidate the investment). Plus if you hold the investment for 5+ years you get a 10% step up in cost basis on the capital gain you invested. Even better, if you hold the investment for 10+ years then the gain on the investment is tax free.

So e.g. you sold 150k worth of link that you bought for 10k, buy a property for 75k and build a building for 75k and rent it out, hold for 10 years then sell for 400k. You pay tax on 140k * 90% in tax year 2026 and you pay no capital gains on the 250k profit from the building.

It's kind of legally complicated as far as I understand, you have to do everything through a "qualified opportunity fund" which needs to have I think 90% of its funds invested in opportunity zone business, but you can set one up yourself as an LLC or whatever. Plus if you buy a business that's currently operating like a multifamily building with tenants, you have to invest at least as much into improving the property as you did in buying it. Also, you can't just develop a building and rent it out triple-net, you need some more hands-on leases as well.

That's all I've got off the top of my head. It's legally complicated so you should google or talk to a tax lawyer for more info. I'm pretty sure it would be really beneficial for you given your strategy and that you're in Detroit. I'm gonna put my kid to bed then I'll come ask some questions.

bro thanks - i literally have like 10 properties so far in these zones.....

I need to research this more because I already paid my taxes and already own the properties

what do you recommend

I think if you've already bought the properties you're out of luck. But you could liquidate existing ones and reinvest the gains and take advantage of the OZ law on the new properties. Honestly it sounds to me like it could be worth the work/overhead.

I need some more time with the kid but if the thread falls off in this storm of link threads shoot me an email at re_advice at protonmail

cool - Im getting in the habit of making them regularly but ill definitely shoot you an email

How hard is it to get a mortgage loan with a shit credit score? Can you pay a higher deposit?

bump

OK, like I said it's my first time investing in RE, but I have a lot of capital gains and if I can get out of paying tax for 6 years I'm gonna try.

I'm leaning toward buying an empty plot and developing commercial or industrial. Could also buy abandoned/distressed and fix up. You're going for run-down buildings in high traffic spots, that makes sense, but how do I go from there without getting fleeced? I think I would need to hire a GC to run the development, is it a good idea to ask for a contract w/ a fixed price agreed ahead of time?

If I go this route, will it be a problem if I want to have the lease to not be triple-net? (Like, do all tenants want triple net?) What do you think about a mixed use building with commercial downstairs/residential upstairs?

some user posted last thread about that he was a loan officer andsaid even if you put more down it doesnt mean you will get approved - i honestly donnt know

buying empty land and developing it can be a challenge, ive only done this once before and it was a huge headache that i will tackle again once i get older and more organized

i recommend buying distressed in high traffic areas - and just lowball the fuck out of them. literally when you view the property just say negative things but not insulting

"looks like the roof is going to need some repairs" "im definitely going to have to gut out the bathroom" etc

i didnt hire a gc but my dad has so much construction exp that he helped me significantly

tenants dont usually like triple net - how i do it is my tenants pay for maintenance / utilities and i pay taxes and ins

mixed use is beautiful

I was hoping if I could find a good GC they would deal with most of the headaches, but I guess that's too optimistic. Plus I have no clue how to find a trustworthy GC.

For fixing up a distressed place, ballpark how much are you aiming to spend compared to the purchase price assuming there's nothing really major? What kind of repairs/improvements are you usually doing?

Is it a good idea to set up a separate LLC for each property? Do you bother to do that?

>Asian
>indians
>upperclass whites
>hispanics
>nobody
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>lower class whites
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>niggers

yeah each of my properties are in their own llc - i have 4 lots next to each other that are in just one

it depends for instance i bought a house for like 15,000 and spent like 5000 repairing it (new toilet, new cabinets, new carpet, paint)

i bought a warehouse for 30,000 and put a hundred into it (roof, demo, clean up, etc)

Eh, user, your responses are pretty shitty and very basic. I've been reading your thread all week, adn congrats on you for owning 40 properties.

You didn't answer what's your CAP rate.

And you sound like you got most of your advice from bigger pockets.

Anons, while OP may have some skin in the game, he's a faggot. Don't be a faggot.

I only need 4 houses to rent max.
Anything more is too much time to deal with while trying to execute a full time job amd making sure I'm not just buying too many houses eating any and all company assets.

I hear of renters talking dayin that at any given point they only have 3K in their personal bank accounts because any other money is being invested in buying other houses. That of course is really just bad. You need to pay yourself. With the economy taking my local area is a terrible place to rent out. Everyone falls behind on rent it seems like unless their living on student loans.

I mean Im still pretty young but real estate is all I know

and yes a lot of my advice is from people who own much more than I do

my cap rate is going to sound retarded but I dont care if you dont believe me its usually over 30%

most recently i had a cap rate of 70%

what area are you looking in?

I think you're a faggot

This shit isn't rocket science, so if I get the basics right thanks to user then I'm happy. Dude has common sense and experience and he's not some redditor or bigger pockets facefag.

What do you think the biggest pitfalls are in this distressed property refurb game? Overpaying for something that turns out to have way worse problems than I thought, getting overcharged/underdelivered by contractors.. what else?

How selective are you with commercial tenants? Do you just want to get buildings rented out or do you avoid specific kinds of businesses?

bump

So the biggest thing that can fuck you over is the roof, Ive had entire projects just completely fucked because I would buy a building for $4,000 but it needs a $20,000 roof repair. See how this can be an issue? Spotting a bad or good roof can usually be difficult so what I do is wait for really bad rain or just after it rained to see it. In michigan it rains pretty frequently. Standing water on a roof is also bad so you want to make sure it is properly draining

The goal is to buy the stuff as cheap as you can - i know this is difficult if you arent in a city like Detroit where you can get into RE for less than 10k but overpaying is something that is easy to avoid here. i know in a lot more suburban areas people think what they have is gold and overcharge and can be difficult to work with
I've never said no to a tenant - if they have first months rent and a security deposit I honestly could care less of what theyre doing. Unless theyre growing pot because that shit will fuck up your house / cause mold and other issues. If your tenant is legit and has the cash just wish them the best and say a little prayer for them