Brief intro. Live in Denver area, bought a house for 318k two years ago (personal residence), self-renovated the basement, house-hacked to have a renter that pays half the mortgage. Since purchase, house has appreciated about 30k. Eventually plan to completely rent out this house, and move to a smaller property (maybe even a converted van on some land?). However, I have about 40k saved for my first LDRE purchase, and after many spreadsheets, have narrowed down to GR/East lansing/Kzoo. I like these areas over larger hot areas with great numbers (like indianapolis, columbus) because I like the idea of starting in a smaller area. I really want to live and breathe the area, and larger areas i.e. indianapolis feel a bit intimidating to me, also the amount of turnkey companies in this area makes me fear for ability to get good deals from afar. I also like that these areas are somewhat close to each other, likely not close enough to use the same team, but close enough to hopefully network and check out area to area, and possibly eventually have properties in more than one these.
Anywho, for now, I am looking for some guidance on choosing between the 3 above - to start. Obviously, there are pockets within regions where the below will vary, but main things that are important to me are availability of MF properties, reliable property mgmt companies (being long distance), and cost. I like that Lansing seems to have a good amount of MF's and that the price points in general seem lower, but property taxes in general seem to be higher. GR seems exciting with slightly higher population than Kzoo, slightly higher population growth, and more MF's available. See a rough chart I made below:
|TOWN||Property Tax||Average price (3/2)||Average Rent (3/2)||Price to rent ratio||MF on MLS||MF sold last 3 mos||Population||Population Growth (8 yrs)|
|Grand Rapids, MI||1.696%||$164,000.00||$1,280.00||11.00%||34||74.00||199000||5.76%|
At this point, i'm seeking some information on the more intangible aspects that may help me decide. Any insight would be super appreciated!!!
@Yaicha Bryan My response is not a direct answer to your question, but a curve ball!
You bought a house two years ago and it's apprecaited $30k? Between the market appreciation and your improvements, you don't think it's more.
The main reason I'm responding is because I read your bio and saw that you mentioned Nomading. I'm assuming you've been to @James Orr class at some point. I've done some deep financial modeling dives with James on his Nomad process. I've yet to see any investing method that outperforms it, while like keep a risk, time, and skill on the low side. I'd recommend that continuing to Nomad still be your #1 investment strategy. That is what many of clients are doing here in Denver.
Not sure how much of a numbers nerd you are, but if you want to nerd out on of our models, let me know!
Anyway, good luck with the out of state invseting, but please keep Nomading! :)
You have average rent in Lansing at 1k - is that per door? If so, you're a bit high. Also when you say multi-family, how many units are you basing your pricing on? Where are you looking? You need to know the areas of the city in terms of which ones will do well and which ones won't. One block can be great while another just down the street can be not so great.