Should You Invest in Cheap Detroit Real Estate?

Question: “I’ve heard that a lot of the real estate in Detroit can be bought for just a couple hundred dollars. So why don’t people buy it up and wait for the market to improve? What’s the catch?” Answer: That may well be a good idea. After all, often the best time to buy any
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Can You Require Your Tenants to Pay in Cash?

Question: “With the tough economy, a lot of my tenants’ checks have been bouncing. Obviously that makes my life pretty stressful. So I want to tell my tenants that they can only pay in cash. However, a friend of mine said I can’t legally do that…?” Answer: Since January 1, 2005, it’s been illegal for
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How Interest Rate Increase Affects San Diego Home Prices

Question: “What do you think the recent interest rate increase will do to home prices?” Answer: Great question.  Many people are asking me the same question right now. My economics degree gives me some insight.  Economics is ultimately a study in human behavior and how various forces impact that behavior. So how does increase in
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Should You Request a Schedule E for a Rental Property?

Question: “Hi Gary. Question: When buying a Rental Income property, is it customary to request a last available copy of IRS Schedule E on that specific property??? This certainly would be reliable tool to estimate a Near True rental income? Warm regards.” Answer: That’s a great question and a great idea. You never want to
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Be Tough, Hire a Manager, or Don’t Be a Landlord

Question: “I’m not sure I’m cut out to be a real estate investor. You’d have to be so heartless. How could you ever evict someone who’s down on their luck and can’t pay the rent?” Answer: I admire your thoughtfulness and caring. The world would be a better place with more people like you in
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What Is an Estoppel Letter?

Question: “What is an estoppel letter?” Answer: The following story actually happened to me two separate times… I made an offer on an apartment building and it was accepted. That was the good news. When I went through the apartments, I asked the tenants how much rent they paid. Oddly, EVERY tenant paid less than
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Does One Fix-and-Flipper Ever Sell to Another?

Question: “I was reading some discussion of how prevalent flipping houses is now. Do houses ever get bought by people looking to “flip,” who then upgrade them and sell them to other people looking to flip, who then upgrade them again?” Answer: Rarely. Most house flippers typically operate on minimum profit margins. If you add
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Investing in 4 Houses vs. a Fourplex

Question: “Which makes more sense as an investment, buying 4 houses or buying a 4plex?” Answer: That’s a great question. I own several fourplexes myself. I’d go for the fourplex because it should give you better cashflow and is easier to manage than 4 separate houses.
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How to Know if You’ll Profit from a Flix-and-Flip

Question: “How much under-market do I need to buy a home to make money on a fix-and-flip?” Answer: There’s no simple formula, because of all the variables: Financing Fix-Up Cost Fix-Up Time Added Value Market Time Negotiation Transaction Management Appreciation – Financing – Obviously, you want to get a loan at the lowest cost possible
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Can You Avoid Taxes with a Fix-and-Flip?

Question: “I’d like to start buying fixer-upper homes and reselling them for profit by exchanging them, so I can avoid taxes…” Answer: I know you’re not asking a question, but I have two important comments for you… #1: There is HEAVY competition for “fix/flip” properties like you want to buy. Last week a man came
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