First Unit Update. Looking to connect in Michigan
**Maybe this is a bad post. No replies in the starting out section. Trying the Michigan Q&A section.
Alrightyyyyyy!!! Just a head up that this is going to be a long post. Where to start......
I found Bigger Pockets about 6-years ago and, it supercharged my desire to get into real estate. I had chances in the past and always dreamed about doing it but never took action. After listening to every podcast there was, reading, and fighting analysis paralysis, I finally took action! We drove around our area and wrote down the address of every duplex we could find. We then used the county website to find the owner and the owner's address. We whipped up some letters and sent them out. A gentleman contacted us stating he was getting ready to list his last duplex. I couldn't believe it! It worked!! What do I do now, I thought. It turned out that his son-in-law is one of the top agents in the area and was about to list it. He worked with us the entire way and, we closed that deal due in large part to him! (He will be our agent for life and we recommend him to everyone we get the chance to.)
Fast forward a bit. We got into the place just as we found out we were going to have our first child. We inherited a stellar renter who had lived there for 20-years and paid rent early every month. The rent was well below market rates, but thanks to the advice we received on here, we kept it low and slowly increased it the first year. Things were going well. Our life was changing, but it was changing for the better. Once our child was born, we decided to have her leave work to be a stay at home mother. This is where we started to get comfortable.
The numbers worked fine losing the wife's income. We had to adjust our lifestyle a bit but who doesn't after having kids? Having the renter pay a decent amount of the mortgage helped out so we decided to pay down some stupid debt. We figured this would help our DTI for the next property. We had everything right and time kept flying by.
The duplex is 900 sq/ft per unit, and we started to notice it was a little tight for all of our belongings and an ever-curious two-year-old. While vacationing during the 4th of July weekend, we began to feel like we were suffocating by staying there. We were not using it for what we intended it for, which was renting both units and banking the cash flow for our next purchase. We also realized that rents had increased tremendously over the past 2-years and our tenant was once again paying at least $350 below market rent. We got scared, felt like we screwed up, and decided to contact the realtor to sell it.
We contacted the agent once we returned from Holiday and worked the numbers to sell it. He asked why we wanted to sell it. I began to blurt out it is too small for our needs, the tenant's rent is low, mowing the grass, and any other reason I could think of to justify selling it. The good news was it had appreciated nicely since our purchase and he felt we would sell it for about $55k above what we bought it for. During our conversation, I noticed his body language. After a day or two of talk, it dawned on me. He was thinking, "why the heck are you going to sell this"? The wife and I discussed it more, and we realized all the reasons we were looking to sell it are the same reasons we looked for a landlord to have to purchase from!!! We were about to be the people we looked for to buy from! We called the realtor back, told him what we had discovered, and he encouraged us to keep it.
On to today. We are fully moved into a beautiful townhouse we plan on renting for the next year. I am about 50% complete in the process of getting our unit move-in ready. We also decided that with the large amount of cash flow this thing can generate, that we are going to hire a property manager for a year. Everything is going amazing again and I am thankful for every lesson learned along the way.
My intent of sharing this to get off my chest that without realizing it, I almost blew a great opportunity. The other reason is to reach out to anyone that reads this in the West Michigan area that would like to meet up virtually or at a park (socially distance). I am ready to tackle the next project. Before I do that though, I would like to work with someone that has done it. For now, I would like to try a wholesale, flip, or both! Using the rules from the Richest Man in Babylon though, I would like to do it with someone who has done it before.
What can I bring to the table? Excellent credit, cash for marketing, and a private money provider (given the deal is correct). I have the first one under my belt and even though I took a 2-year pause, I'm ready to rocket forward and build something amazing. Let's do this!
The answer is always no if you never ask.
-Nathan