The tale of 2 houses, aka: WHEN to cut bait.

This is the story of 2 types of investors and 2 types of investments. After reading, tell me if having a seasoned long term hands on skin-in-the-game professional in your back pocket is useful. Fair enough ?

2 Investor types:823hubbard-flint-mi-1986

  1. Knows when to cut bait
  2. Holds on until value is all gone, damaging credit.

2 Investment types:

  1. House still looks nice, area took a dump.
  2. Looked hideous, still does, but the area made it a good investment – in fact, there are brand new homes next door where there was abandoned inner city lots.3134birchrow-eastlansing-mi-1982-b
    • Point: Numbers will dictate logic & should tell you when to act.

I’ve had this one current client since opening my office over 3 decades ago.

Twice in that time I’ve issued ‘now is the time to buy’ alerts. I don’t do that lightly and I give reasons and research – AND put my money into said markets.

This one client did in fact pick up over a dozen investments in the 1st round. Then, as the area began to turn and he was invested ONLY in that local area and 1 property type, over a 5-10 yr period I begged him to bail before it was too late. Yep, didn’t do it.

Its not just a nationwide economy that affects these decisions, there are buy/sell opportunities all the time and many many local factors come in to play, more so local factors over statewide & nationwide in my opinion.

Welp, here’s some local info on the below ‘pretty house’ I owned in the same area.

Property Overviewfeedback_thinkAboutIt

  • Crime Rate: High
  • School Rating: D
  • Registered Offenders: 68 within 1 mile
  • Average Home Price: $24,000 within 1 mile (I sold for $15k more in 1988)
  • Foreclosures: 50 within 1 mile
  • Environmental Hazards: 24 within 1 mile

I’d bought, cleaned it up, made profits on renting for a couple years and in the 2nd year more so on selling it… waaaaay before the area took a dump. (my 1986 fence & rose bushes are still there).



Below are current photos of THE most profitable house I ever had, AND the ugliest.

Made about 150% ROI every year  for 11 years with virtually no tenant turnover (1 for 7yrs, 1 for 4 yrs) + an additional 1000+% on my initial investment in the year of sale. Held: 11yrs, profit: $125-225/mo x 11yrs + $11000 at closing all for $1000k down payment and a few bucks for new kitchen cabinets and carpet.

  •  That tree in the front yard was 12 inches tall when I planted it in 1982.
  • Still has same kitchen I put in 30+ yrs ago after a gut and swap on my summer off from college at MSU. A bit shabbier now – well, a lot shabbier.


Additional takeaways:

  • The immediate & local market dictates a ‘good’ investment and timing.
  • Investments are usually ‘cash now’ OR ‘appreciation for later’ RARELY BOTH.
    • The best ‘cash flow’ properties usually gain little/nothing/or are eventually abandon. Use these to live on.
    • The best ‘appreciation’ properties break even or have a small loss in ‘cash flow’ while held. Use these for retirement or other future savings.
    • ‘Appreciation’ properties are usually best at accumulating wealth.

If it was as easy as the TV shows, 94% of all investors would not loose money in real estate. If it was not a good investment, ‘the Donald’ would just be ‘Donald’, ‘Rich Dad/ Poor Dad’ would not be a book.

She made a Million Dollars recycling homes – 35 years ago!

In the early 80’s I picked up a very honest yet motivational ‘how to’ book on real estate investment. In my senior year of college I was set to invest. I actually drove to NJ, looked up as many of these homes as I could, took pictures, and tried to take notes in my then ignorance. After reading the book I bought a shack for $17500, w/ $1000 down, gutted the kitchen and bath, and placed into service what was one of my most successful investments to date.

I’ve used these & other techniques I gleaned from my broker/investor dad, and have shared them with clients for 3 decades.

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It comes down to humble work, patience, time value of money, and good mentors – I had my dad ! I keep a few copies of the book for clients I work with. Let me know if you’d like one.

The results are in …2015

So what can one actually expect when they purchase an ‘in-place’ real Image1estate investment ? Well here are actual numbers of the highest and lowest producing properties  that we’ve set up and mange for active client portfolios.

Clients, request a copy of the below spreadsheet to compare your investments against each other – it will assist in planning  ‘which to keep’ vs ‘which to cut loose’.  (Non-clients: available for a small fee) Installation and customization available from site or remotely.


In pdf format BOY_Letter_RNW_2016_01_01_sideB

The results are in … EOY 2015 ‘Fixer Upper’ Return On Investment

So what can one actually expect when they purchase an ‘in-place’ real Image1estate investment ? Well here are numbers from picked & rehabbed properties we’ve set up and mange for an active portfolio client.

Active client of ours? Request a copy of the below spreadsheet to compare your investments year to year & within your portfolio. This can assist in planning ‘which to keep’ vs ‘which to cut loose’.

  • Non-clients: ‘Remote in’ installation & setup available, or stop in – you don’t even need to bring your laptop.

Anibal Affiliates Inc Realty Net Worth Fixer Upper results for 2015

In pdf format BOY_Letter_RNW_2016_01_01_sideB

NEXT YR 2016 results

This is not an offer of a guaranteed return. Always do your due diligence before investing.

What about HUD homes ? Investor vs Owner Occupant

Often there are some seemingly good deals you may see either in the MLS ( ) or on

Sometimes they appear on one but not the other.

There are general guidelines:

  1. Most often the deed listed buyer must occupy for at at least 1 yr and cannot buy another for 2 yrs. subject to $250k fine and jail time.
  2. They are as is period. You pay to turn on/off utilities and rewinterize any plumbing inspection.
  3. Since they are as is – your min. $500 – 1000 deposit will not be returned.
  4. Bids are usually open for 10 days, then decided on daily for the next 5 days.
  5. At 15 days on market, there is a possibility for investors to bid.

For more reading:


Surprise! Detroit among the best housing markets to invest in


Home prices in those areas fell about 40 percent on average from their highs, peak to trough, Rood said. And inventories are the tightest in Detroit compared with the other cities listed in Rood’s top five. Detroit only has two months of inventory available for sale, while there’s about seven months of inventory in Ft. Lauderdale, for instance.

Meanwhile Mobile, Ala., one on the worst housing markets to invest in, according to Rood, has about 19 months of inventory.

Along with that region, Chicago, Charlotte, N.C., Philadelphia and St. Louis are among the worst housing markets to invest in right now, according to Rood.

( google the article title for full story)

Flipping profits more than triple from 2012

Here’s the bullet points:

  • Flipping is risky business.
  • Just two years ago during the January-to-June period, flippers lost an average of $13,206 per home. Last year they turned an average profit of just $5,321.
  • And although flipping continues to increase in the nation as a whole, activity dried up along with the bargains in 32 of the 100 markets that RealtyTrac examined…. like Las Vegas, Phoenix, Southern California and Atlanta
  • flippers continue to find big bargains in one state that was hit hard by the housing crisis: Out of the nation’s 15 most profitable metropolitan markets for home flipping, almost half were in Florida.

Yes we assist investors 


Institutional buyers are buying distressed properties,…gigantic hoards

……If you think rapidly rising home prices is a good trend, you might want to think again.

………….Institutional buyers are beating owner-occupied traditional home buyers to the market. With gigantic hoards of cash at their disposal they are buying distressed properties, mostly those in foreclosure or through lender facilitated short sales, one at a time and in bulk where they can.

  • …. Blackstone Group (BX) has already spent more than $3.5 billion to amass a portfolio of more than 16,000 single-family homes. Chairman, CEO and Co-Founder of Blackstone recently said the firm was spending about $100 million a week buying homes.
  • Silver Bay Realty Trust Corp (SBY) is a newly spun-off  real estate investment trust, shed from its REIT parent Two Harbors Investment Corp. (TWO), that owns 3400 homes and is adding to its inventory of purchased-to-rent properties.

…but conceivably…. the first-in money will try and create a floor and push prices higher to sell out as high as possible……


10 Rental Home package coming to market

Not formally listed/ not in MLS, here’s a ready to go set of rental homes in good condition with a long history of care and occupancy. Contact for showing and cash flow information.

Acquired Rented for:

149 Linsey Flint Aug-87
3368 Springvalley o/s Apr-88
2715 Eaton Pl Flint Jul-88
2814 Eaton Pl Flint Feb-88
3030 McCollum o/s Feb-89
2814 Gibson Flint Nov-89
3062 Raywood o/s Feb-90
1131 Fulsom Flint Jul-90
2908 Eaton Pl Flint Feb-91
1489 Maria o/s Apr-93