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Thursday, September 3, 2015

A Legacy Six Enterprise Update: The Detroit Dream

Hello everyone! Back in January, I had the honor of presenting the Legacy Six Enterprise Team on CCM blog: Legacy Six Enterprise, LLC: Creating Legacies in Detroit. In August, I contacted PR man, Deon Watkins, and asked for an update on the team. The update is in! Without any further, here is what the L6E team has been up to:

These past few months have been a great learning experience for us. We sold a house back in May to an investor. We bought this house from an old couple under a land contract. For those unfamiliar with the term, it is like seller financing.  After we put the house under contract, we got inside and did most of the rehab work ourselves. This helped us cut costs to insure a bigger profit margin in the end. For the work that we couldn’t handle ourselves, we hired local handymen that we knew.
While we were rehabbing, we marketed the house to potential buyers. We found a buyer and set up some terms in order to sell the house. The terms were to finish up the repairs that we had planned, and find a renter who was willing to sign a one-year lease. Our plan all along was to sell it as a turnkey property, so we agreed to the terms. After the contract was signed, Darrin quickly put up "For Rent" bandit signs throughout the neighborhood. We found a renter, finished the repairs, and got paid.
The entire ordeal wasn’t actually that easy though. The closing was longer than it should have been. The couple we had the land contract with was comfortable working with us, and they enjoyed the arrangement we had. Deon was mailing them monthly installments to pay off the land contract. They thought, however, that we were running a scam after we arranged the land contract to be paid off in our closing with the investor buyer.
The couple had to give the closing agent some personal information, so that the remaining balance could be wired to their bank account, and they weren’t comfortable with that. It took almost three months to close because of the couple's hesitation. We finally agreed to meet the couple at a bank with the buyer. The couple wanted to see all of the closing documents and get a cashier’s check in their hands from the bank manager.
That was the most painstaking experience for us. Other things we experienced and learned include the need to get a good inspector at the beginning of the project. We feel that we could have known about some problems with the house before purchasing. That could have helped us with the negotiation. Instead, we encountered those problems while working on the rehab.
We are currently working on a couple of projects. We are working with a company that purchases tons of houses in the Detroit area and offers land contracts. One of the members of the group bought a house from this company, and has been living in and repairing the home for the past month. We plan to buy a house on land contract, fix it up, and put a renter in it. We want to start building up the company’s portfolio and start earning passive income.

We also feel that we can utilize this company to work on our buy and hold strategy. We are working with a couple of hard money lenders, so that we can start a fix and flip project. We have been looking at some houses with our realtor, posting bandit signs, talking with wholesalers, and using our social network to try and find the right house to flip. We have found a couple of homes that were perfect, but the numbers weren’t, so we are still looking.

Deon is working with an investor that he met on biggerpockets.com. The investor has family that lives in the Metro Detroit area, and he has one property in the Detroit area. The investor lives in Europe at the moment, but he was visiting Detroit. Deon met with him, had lunch, and talked about a potential partnership with him. The investor has kept in touch and has been looking at houses in Detroit. He has also been seeking our advice on which areas are best to invest in. Deon has been talking about working with him, and this potentially being the start of the Legacy Six Property Management Company.

Contact Info: legacysixenterprise.com/contact-us

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