How I’m Quietly Turning 4 Rental Properties into a Passive Income Goldmine While Crushing My 9-5 Grind
Tony:
And as you talk about cashflow, Mike, I mean you say now that maybe cashflow isn’t the end all be all of a good deal. So what other things are you looking at now to evaluate the merits of, hey, this is a good deal or this isn’t a good deal,
Mike:
Forced equity all the way? I’m not so far a believer in the point where I would buy something that doesn’t cashflow otherwise I’d probably buy in New Jersey because the appreciation’s great here, but you’re in the red no matter what. But that said, what I love about my market in Southeast Detroit is you can find things that you can at least be breakeven while doing work, doing rehab to these properties and forcing almost every penny you put into it is going to be forced equity if it’s in the right condition. My duplex is a good example. We bought that for 107,000 and it needs a lot of work. It needs a new roof. The whole downstairs unit needs a total overhaul all in. We’re probably going to be like a $40,000 rehab on that. But the comps once fixed up are in the 1 70, 180 if not 200 range. So you’re getting a hundred percent ROI on the renovations. And meanwhile, I have tenants in there that are actually keeping me in the green while we do it. So it’s kind of a win-win. But as far as the actual take home at the end of the year, if I can force $50,000 of equity through that process, you’re never going to make that in cashflow in one year. It’s going to take a long time to match that.
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