Young and Excited to Start- Looking for guidance in Grand Rapids, MI
Grand Rapids, MI · Member since 2013 · 24 posts · 0 votes
Hi all,
I am new to this forum and really enjoying it so far.
Seems like there is a plethora of information here as well as some very knowledgeable people. I am really interested in the Real estate game, and am just looking for someone to talk with about the possibilities.
I am located in the Grand Rapids, MI area. I'm curious if there is anyone on these forums from this area?
Look forward to hearing from you as well as reading more.
Thanks!
-Nick
See the agents BiggerPockets members work with in Grand Rapids, MI.
See agentsNick Meister & Dawn A., tax delinquent owners aren't difficult to find if you're looking in the right places. Most of the properties I buy aren't listed on the MLS, and while it does take a little bit of searching to find them - they are a HUGE goldmine of equity when you do. The method I use certainly isn't the only way, but feel free to colleague me if you're interested and I can give you the low-down on how I do it.
Also - regarding the property manager issue, here is a short dissertation outlining my thoughts on that...
If I didn’t have access to a good, competent property management company, I wouldn’t have even considered buying rental properties in the first place, that’s the honest truth.
Knowing that I can pay someone a very fair portion of my revenue to handle ALL the headaches that rental properties are known for - is a total game-changer.
Here's what you have to ask yourself:
A. Do you want to create a job for yourself managing properties?
or
B. Do you want to build a significant portfolio of passive income from rental properties?
It's not easy to do both simultaneously, because both are time-consuming tasks (especially A). My goal is to do the latter (B) because I don't want the money to stop coming in once I stop working. I want streams of income for a lifetime.
I’ve heard the arguments that new investors make. They just buy their first rental house or duplex and they don’t want to give away 10% of their rent revenue to a management company.
I understand where they're coming from, but I think they're missing some very important points. Just consider some of the benefits that come with hiring a management company:
- You don’t have to deal with any of the tenant headaches. Most of the time, you don’t even need to know who your tenants are! My management company screens each tenant and makes sure they’re going to be a good occupant and make their rental payments, they handle the time-consuming parts of the job and they deposit money directly to my account every month. I spend about 2 minutes per month thinking about my rentals while the money builds up in my bank account over time. Showings, screenings, house visits and evictions are all handled by my property manager while I'm out living my life.
- You don’t have to be a handyman. Management companies are experts at repairs and maintenance. They know how to do these things quickly and inexpensively because they do these jobs every day. Generally speaking, your management company will know more about how to streamline this process than you will ever be able to learn on your own.
- With a management company running your rental business, you can invest in properties anywhere in the world! Logistically speaking, if you live in New York, there is no reason you can’t buy a property in California and turn it into your own personal cash cow. Just because you can’t drive by and see it every day doesn’t mean it can’t produce a significant stream of income AND be managed better than you could ever do it by yourself. The whole premise behind a management company is to allow you to go about your life without having to deal with the hands-on issues of managing real estate. With a management company in the mix, it makes no difference whether the property is across the street or halfway around the world.
- Management companies can bring a ton of value to the table and can actually help you make better investment decisions. They really are in your corner because if you do well, they do well. Every time I buy a new rental property, I have MANY ongoing conversations with my property manager, getting tons of free consulting from an expert who knows the neighborhood better than I do. They tell me what kind of rent revenue I can realistically expect to make (which coincidentally, is almost always less than what the seller told me), what kinds of issues and costs I can expect to deal with, what the neighborhood is really like, and if they think I’m getting it for a reasonable deal. This information, (coming from a credible source like my management company) is a HUGE benefit that I wouldn’t have access to if I was trying to manage this whole operation on my own.
- If you bought your rental property the right way, the monthly management fee is already baked into your cash flow. Each property should be designed to support the cost of a property manager (because SOMEONE will have to do the job, even if it's you!). Before you make any decision to buy, you should always make sure you can afford to cut out 10% for property management and still show solid cash flow.
Welcome. Can't really help since I'm relatively new myself, but I am somewhat local. I'm located here in the Southwest part of the state. I'll actually be in GR tomorrow to take my real estate licensing exam, though.
Oh very cool. Sounds interesting. Good luck on your exam. What are your plans after becoming licensed?
Thanks. I actually don't know yet. I took the courses a year ago and had sent in all my application stuff, but just learned last weekend that my state application and all the fees I already paid would expire on Monday, so I dusted off my books and have been cramming all week. At this point since I've already gone through 90% of the effort, I might as well just get it. Beyond that, I don't know if I just want to leverage it with future investing, get into commercial stuff, or what. Only time will tell.
Hi Nick Meister & Jeremy Vohwinkle welcome to BP! What area of real estate investing are you both looking at getting into? I went to Hope College and have watched the GR market for a long time. There are some great areas for flips and some other areas that are great for buy and hold.
Hey Geof, Thanks for the response. Right now I am looking at getting into a duplex type property as my first purchase. Reason being, I am in college here and would like to possibly find a place that I could live in and then rent the other unit to offset costs. Any suggestions in areas or neighborhoods?
Hey Nick Meister, I'm right in your neck of the woods. I've been investing in the Western/Northern areas of Michigan for several years now... you're in a good place - for sure.
Where are you going to college?
Hi Seth,
Cool to see there are people here from the same area as me! I'm attending GVSU and studying Economics and Finance with a planned emphasis on real estate. I was actually curious as to whether or not West Michigan or even Michigan at all is a good place to get into real estate. I have been contemplating other locales to move to upon graduation, but I would still like to get started here in Michigan while I'm in school.
Cool. I went to Calvin College (and I'm in the process of finishing up an MBA at Northwood University). GVSU is an awesome school too - I've taken a few Accounting & Finance classes there.
The nice thing with Michigan is, the properties are cheaper and the market is easier to get into without being made of money. It's been a rough market for the past few years - but over the past few months, things have really been picking up.
West Michigan is also a pretty well diversified economy, so even when the economy is down, it never gets THAT bad around here (it's a different world than Detroit, as you probably know).
Even though prices took a serious tumble since 2008, you can still make some great rent revenue - which is a great combination when you're looking for properties with killer cash flow.
Good to hear! Congrats on finishing your MBA. I have yet to determine if I will continue on for mine. So what was your first purchase? And how did it go for you? I've looked into some duplexes in the area, but most of them in the sub $125k range appear to need a lot of work to get them in nice rentable condition. I am no handy man, any advice on how to get some fixer-up experience?
Most of my purchases have been from owners of tax delinquent property (which tends to make them VERY motivated to sell). No real estate agents involved. I buy properties for very cheap and then re-sell them a few weeks/months later for a nice mark up.
I own a duplex on the NW side of GR and it cash flows pretty well. We're in the process of buying a SFR house in Wyoming as well. Our rentals are managed by a property management company, so they handle 100% of the fix-ups that are required (a good property manager is worth their weight in gold).
I'm no handy man either, so it helps to have the right connections with people who can make that part of the job easy for me.
Oh, I see. That's an interesting idea. How do you go about finding these tax delinquent properties? Are they listed or do you track them down? Also I've been thinking about the property manager idea,but I'm curious as to how much they cost. Is it a monthly fee type thing or do they get a percentage of profit? It seems like they would be super helpful, but I was worried about them cutting into what little profits I would be making initially. Or do you think I could get by on managing my own properties to begin with, at least until my portfolio grew.
I'm also interested in how you find tax delinquent properties.
Geof Greeneisen, I actually have one rental home right now. Not a great one (long story) but it's been a learning experience over the past few years. My goal this year is to try my hand at one rehab flip and pick up one more property to hold and rent out. Just want to try a little bit of everything at this point to see what I enjoy the most and what makes the most sense in this area.
In other news, I passed the exam today, so now I can see how that might open up some opportunities. I'm in no rush and have a year to find a broker if I want to go that route, so we'll see what happens.
Nick Meister & Dawn A., tax delinquent owners aren't difficult to find if you're looking in the right places. Most of the properties I buy aren't listed on the MLS, and while it does take a little bit of searching to find them - they are a HUGE goldmine of equity when you do. The method I use certainly isn't the only way, but feel free to colleague me if you're interested and I can give you the low-down on how I do it.
Also - regarding the property manager issue, here is a short dissertation outlining my thoughts on that...
If I didn’t have access to a good, competent property management company, I wouldn’t have even considered buying rental properties in the first place, that’s the honest truth.
Knowing that I can pay someone a very fair portion of my revenue to handle ALL the headaches that rental properties are known for - is a total game-changer.
Here's what you have to ask yourself:
A. Do you want to create a job for yourself managing properties?
or
B. Do you want to build a significant portfolio of passive income from rental properties?
It's not easy to do both simultaneously, because both are time-consuming tasks (especially A). My goal is to do the latter (B) because I don't want the money to stop coming in once I stop working. I want streams of income for a lifetime.
I’ve heard the arguments that new investors make. They just buy their first rental house or duplex and they don’t want to give away 10% of their rent revenue to a management company.
I understand where they're coming from, but I think they're missing some very important points. Just consider some of the benefits that come with hiring a management company:
- You don’t have to deal with any of the tenant headaches. Most of the time, you don’t even need to know who your tenants are! My management company screens each tenant and makes sure they’re going to be a good occupant and make their rental payments, they handle the time-consuming parts of the job and they deposit money directly to my account every month. I spend about 2 minutes per month thinking about my rentals while the money builds up in my bank account over time. Showings, screenings, house visits and evictions are all handled by my property manager while I'm out living my life.
- You don’t have to be a handyman. Management companies are experts at repairs and maintenance. They know how to do these things quickly and inexpensively because they do these jobs every day. Generally speaking, your management company will know more about how to streamline this process than you will ever be able to learn on your own.
- With a management company running your rental business, you can invest in properties anywhere in the world! Logistically speaking, if you live in New York, there is no reason you can’t buy a property in California and turn it into your own personal cash cow. Just because you can’t drive by and see it every day doesn’t mean it can’t produce a significant stream of income AND be managed better than you could ever do it by yourself. The whole premise behind a management company is to allow you to go about your life without having to deal with the hands-on issues of managing real estate. With a management company in the mix, it makes no difference whether the property is across the street or halfway around the world.
- Management companies can bring a ton of value to the table and can actually help you make better investment decisions. They really are in your corner because if you do well, they do well. Every time I buy a new rental property, I have MANY ongoing conversations with my property manager, getting tons of free consulting from an expert who knows the neighborhood better than I do. They tell me what kind of rent revenue I can realistically expect to make (which coincidentally, is almost always less than what the seller told me), what kinds of issues and costs I can expect to deal with, what the neighborhood is really like, and if they think I’m getting it for a reasonable deal. This information, (coming from a credible source like my management company) is a HUGE benefit that I wouldn’t have access to if I was trying to manage this whole operation on my own.
- If you bought your rental property the right way, the monthly management fee is already baked into your cash flow. Each property should be designed to support the cost of a property manager (because SOMEONE will have to do the job, even if it's you!). Before you make any decision to buy, you should always make sure you can afford to cut out 10% for property management and still show solid cash flow.
I would be fine with a PM company as long as they were good. The limited experiences I have with them were not so much. I'm sure they're out there.
Seth Williams What a rockin' post! Couldn't have said it better myself, and nice to see someone else of the same mindset as myself about the benefits of using a property manager.
Nick Meister I haven't been to GR in a few years, but when I was there I remember asking someone why there were so many empty commercial spaces in town and the person talked a lot about how so many businesses have left GR and so much is just empty now. If that's still the case (I have no idea), keep that in mind when investing. If population is consistently declining, you could end up in trouble with investments properties that you are holding. Flips, fine, but long-term can be a doozy. Michigan as I understand it is in general has a declining population trend due to the automotive shutdowns and all that. So make sure people actually want to live there before you buy there! With that said, I do remember being impressed at how cute (yes, I'm a girl, I can say cute) GR is! I loved it.
@Seth Williams - Wow thanks for that awesome information. Was not expecting such an in depth answer. When you put it like that a Property manager actually sounds like an invaluable resource. I will definitely have to consider that now.
@Ali Boone - Hmm interesting. I have thought about Michigan's declining economy many times myself. But then there are always those who say Michigan is great and doing just fine. Hard for me to say at such a young age. Anyways, I personally love it here in GR, but I do not think I want to live here long term. I plan on moving either to California or more south like Arizona, Nevada, or maybe the Carolinas? With that in mind, I would really like to buy my first property soon, preferably before I finish college. But if I plan on moving once I graduate, is it even worth it to buy property here in Michigan?
@Ali Boone - Hmm interesting. I have thought about Michigan's declining economy many times myself. But then there are always those who say Michigan is great and doing just fine. Hard for me to say at such a young age. Anyways, I personally love it here in GR, but I do not think I want to live here long term. I plan on moving either to California or more south like Arizona, Nevada, or maybe the Carolinas? With that in mind, I would really like to buy my first property soon, preferably before I finish college. But if I plan on moving once I graduate, is it even worth it to buy property here in Michigan?
There's nothing wrong with buying in Michigan and there are deals in every market. And even if you don't plan on living here forever and may eventually move, I wouldn't let that stop you. Especially when starting out, it's going to be easier to buy a local property in an area you are familiar with rather than trying to deal with something remotely.
And if you make it a good deal from the start, it won't matter if you end up moving out of town. You could continue to have it managed for you, or sell it, and so on, and still make money.
Nick Meister I haven't been to GR in a few years, but when I was there I remember asking someone why there were so many empty commercial spaces in town and the person talked a lot about how so many businesses have left GR and so much is just empty now. If that's still the case (I have no idea), keep that in mind when investing. If population is consistently declining, you could end up in trouble with investments properties that you are holding. Flips, fine, but long-term can be a doozy. Michigan as I understand it is in general has a declining population trend due to the automotive shutdowns and all that. So make sure people actually want to live there before you buy there! With that said, I do remember being impressed at how cute (yes, I'm a girl, I can say cute) GR is! I loved it.
Actually michigan is picking up and is rocking. It's a sellers market in metro detroit, especially in the northern suburbs. Tons of people from my high school and college are now moving back to michigan because of the opportunities now available, that weren't when we graduated. The area i grew up in saw a 12% sale price increase last year alone (Rochester, Rochester Hills, Troy)
Hey Joe Delia, I hear ya. It's amazing the kind of shift we've seen in Michigan over the past 12 months. Pretty exciting to see this kind of activity after working in a depressed market for such a long stretch of time.
I've got family in Rochester Hills and Utica, btw. Both nice places.
@Joe Delia, @Seth Williams, my own personal experience is the same type of price appreciation in the Downriver area since a year ago. Still plenty of good deals to be had, though.
Downriver is picking up also. I do have an eye on one, just don't have the resources to pull it off right now.