I was chatting with a guy that lives in a Detroit neighborhood I invest in. He’s been in the community for 30+ years and teaches urban planning and development. He’s highly involved in the community and city in general. Very cool guy, but we’ve yet to meet in person.
We’ve chatted on the phone several times though, trade texts and sometimes emails.
We were chatting the other day and I was explaining to him how my investing philosophy has evolved. I used to buy occupied homes until I realized the inherited tenants are usually headaches.
When we bought Wrecked on Rutherford I learned that rehabs really aren’t all that scary, so we started doing more of those because you can go in, knock out what needs to be done, and know things are fixed and updated correctly, and then place a tenant you vet yourself.
Now that we have a handful of producing properties, I still want to buy them empty, but for other reasons as well. I want to be able to make an impact, even if it’s small for now.
I want to take that vacant, rundown house and make it nice, put a tenant in there, and hopefully inspire others to do the same. House by house, the neighborhood gets better… Detroit gets better.
That’s rewarding.
But it’s risky to do out of the gate when you have limited funds. The McCarty House went drastically over budget. I’ve avoided looking at the numbers until our appraisal comes back, but I’m pretty sure we spent ~$65,000 on the renovation.
We initially thought it’d be about $40,000.
Yeah…
That can wreck people, mentally and financially.
So buying the “turnkey” tenant occupied house is the safe way to start.
And safe can be smart, but it’s also boring. Boring is why people end up hating their careers and feeling void of purpose.
We’ve got some decent projects coming up, but we also have some refinances that will be coming through soon. That means more cash to spend. And I’m looking for a bigger project I can sink my teeth into and have even more of an impact with.