Grand Rapids - SFH or multi unit investment?

[Caryn Connors]

My husband and I are wanting to purchase our first property as an investment in Grand Rapids

Either multi-unit, live in one unit rent out the other(s). Or SFH, live in for a year and then rent. In Grand Rapids, do investors have more luck renting multi units or single family homes?

Another idea we’ve been dabbling with given western Michigan’s coast is short term rentals in one of the beach towns along the lake.

Would love to hear people’s thoughts, share their experiences, or give any advice regarding the GR market and surround area. 

[Brian Arcangeli]

I just moved so that I could convert my primary residence into a rental. I suggest the following.

1.) If you want duplexes, start looking because multi families are harder to find

2.) Generally stay away from 3 bedrooms unless they have equal size. I am learning the hard way that 2 bedrooms appeal to single parent families and students, 4 bedrooms appeal to dual income, or students. The 3-bedroom satisfies neither.

I recommend the SFH route, it cash flows just a little nicer. Also, keep in mind you will want to refinance before moving out.

[Logan Laperriere]

Hi Caryn, 

Welcome to the BP Forum!

I am a real estate agent and investor based out of Grand Rapids. Purchasing a multi family home allows you to have some rental income while you and your husband live in the property. When you decide to move out, having multiple units minimizes your risk of the property becoming completely vacant. I would recommend purchasing a duplex or small multifamily home as your first investment property. 

Short term rentals are a great opportunity. West Michigan has the highest nightly rental rates on average for the entire state. When looking for short term rentals be sure to check local ordinances and restrictions. If you would ever like to chat about rentals in Grand Rapids or Short Term Rentals along the lake feel free to reach out. I would be happy to tell you about my experiences and help you and your husband find the right property.

[Michael Smythe]

@Caryn Connors reach out to @Logan Laperriere!

[Paul Leason]

I would agree with @Logan Laperriere and say that you should look for a Multi family home to start with. I have a SFHs, duplexes and a 4-plex and would like to eventually sell the SFHs and 1031 exchange them into MFs. Cashflow is tough on SFHs and better on duplexes/MFs imo. There's a lot of competition for both SFHs and MFs in GR, but SFH owners NEED a place to live and I find I cannot and don't want to compete with them in a bidding war, as I simply can't make my numbers work.

Buy a duplex and Owner Occupy the one side.  Buy for as little as 5% down on a duplex, owner occupied, yes - you read that right - 5% down!

Live it in for a year and repeat the process, buy another duplex, hopefully with the same program if it still exists a year down the line.  Then you'll have 3 units occupied and you're be living in 1.  Rinse and repeat!

[Sheena Konas]

If you're ever considering a Northern MI beach town, I service Grand Traverse County and surrounding areas. Full transparency though, a lot of the townships with lakes or lake access are getting stricter with STR. The entire old mission peninsula in Traverse City doesn't allow it. Luckily, we have great long term renters up here. Reach out if you ever need guidance on that area. Best of luck!!! Real estate investing is great!

[Bob Lett]

Quote from @Caryn Connors:

My husband and I are wanting to purchase our first property as an investment in Grand Rapids

Either multi-unit, live in one unit rent out the other(s). Or SFH, live in for a year and then rent. In Grand Rapids, do investors have more luck renting multi units or single family homes?

Another idea we’ve been dabbling with given western Michigan’s coast is short term rentals in one of the beach towns along the lake.

Would love to hear people’s thoughts, share their experiences, or give any advice regarding the GR market and surround area. 

I was a property manager in Grand Rapids and managed almost 100 doors. Mix of Apartments, small multi and single family homes. SFH and Multi do great in Grand Rapids. There are parts of GR that do better. Feel free to reach out and I am happy to share insight on parts of town. I also personally invest in STR's and own one in Traverse City. I live in Grand Rapids so I am happy to meet up as well!

[Bob Lett]

Quote from @Paul Leason:

I would agree with @Logan Laperriere and say that you should look for a Multi family home to start with. I have a SFHs, duplexes and a 4-plex and would like to eventually sell the SFHs and 1031 exchange them into MFs. Cashflow is tough on SFHs and better on duplexes/MFs imo. There's a lot of competition for both SFHs and MFs in GR, but SFH owners NEED a place to live and I find I cannot and don't want to compete with them in a bidding war, as I simply can't make my numbers work.

Buy a duplex and Owner Occupy the one side.  Buy for as little as 5% down on a duplex, owner occupied, yes - you read that right - 5% down!

Live it in for a year and repeat the process, buy another duplex, hopefully with the same program if it still exists a year down the line.  Then you'll have 3 units occupied and you're be living in 1.  Rinse and repeat!

 Paul has some great advice. House hacking is a great way to scale quickly!

[Chris Good]

Love these responses! My only 'two cents' is that the answer to your decision will largely be driven by your budget. I don't think it's less desirable to have an SFH to use as a rental, just a different strategy. There is a shortage of inventory...in both the real estate market and the rental market and we see SFH's perform very well. When looking for a SFH there's several factors to contribute to a great rental rate: Location, Condition, Time of Year, Functionality, City Cert requirements needed (if applicable).

I absolutely wish that I could 'Turn back the clock' and do house hacking and jump into real estate investing that way...so many great benefits! If it's within your means to house hack...it's such a great way to jump into it!