All Forum Posts by: Adam Klugh

it's 85% of the ARV, it's a personal mortgage, and it's exclusive to owner occupants. I WISH it was a fix and flip option. I would be doing that all day if it were.

Hillsdale county national bank has good non seasoned loan options. (I kinda feel like they should be giving me money for all this advertising I've been doi"g for them lately of BP)

203k has a lot of hoops to jump through. Not saying it isn't a good option. But an "in house" loan from a local bank can be a lot less restrictive. What part of Michigan are you at

Hillsdale county national bank. My branch is in Jackson MI. 

My local bank in Jackson MI has a loan they offer that allows you to finance both the purchase and renovation at 85,% LTV

Turn key single family rentals are a hard way to lose. Other methods can be more lucrative in the short run but are more complicated. I guess it depends on how much of your time you are willing to invest in figuring out how to execute on more complicated deals.

I'm going to give you advice from the school of @jason hartman. A property has to make since the day you buy it. The more expensive the property gets, the more sense it makes to rent. Look at the rent to value ratio. If thats well below 1%. It makes since to rent. Otherwise you might be playing a gambling game that you can either win or loose.

No. I mean a w-2 Or some sort of monthly income. Something a lender will look at when determining if you can make long term payments. What I'm getting at is, you can break up that 250k into down payments on rental properties. That would make that 250k become over a million in real estate

Do you have other income from which you can use to leverage financing?

@Brett Russell you are right to stay away from the area south of downtown. But I have to disagree with a couple of your points.

I'm wondering where you get the idea of high maintenance tenants. Granted, I have only been renting out properties in Jackson for a little over a year, and I only have 4 units rented, My tenants have not been high maintenance.

The city of Jackson Definitely can be annoying with their inspections programs, but if you go in an remodel the place you won't have to worry much about this. No, you can't get away with having broken windows and all of them have to have screens. They even made me power wash the vinyl siding on one of my homes that I thought looked pretty good. I was pissed. But honestly I think in the long run it's for the best. If you stay West of 4th ave in you investment ventures there are a lot of B to A grade properties that are good investments.

The positive - low vacancy. I interviewed several property managers and all of them boasted that they have a less than 2% vacancy like it was something they accomplished. No. The area does not have a lot of product available for rent so if you have a decent single family that meets all the cities codes it WILL rent in no time. The rent to values are consistently above 1% and often above 1.5%. If you go into the C grade neighborhoods you can easily get above 2% but I stay clear of those because I would like to be able to sell my home if I want.

projected opportunity - The Jackson market has lagged behind the other midwest booms. While 2013-2014 was the time for rising prices for Grand Rapids/Kalamazoo/Lansing (and still rising) Jackson has just started to see this happen. This city has always been this way and I'm not sure why. Anyway, there is actually a good opportunity for flips now even though I prefer the buy/rehab/rent/refinance/hold method. 

Don't be scared, have confidence, and take a look at the market yourself. There is a small window of opportunity in any city to take advantage of the growth period. I personally think that time is now for Jackson. I could be wrong. But I'm literally betting most of my money that I'm not. I'm still kicking myself from backing out of a couple of deals in Ann Arbor in 2011-12. Imagine how I felt. Don't be like me.