All Forum Posts by: CJ Wine

The additions they put in to make extra bedrooms take away the standard livable areas you would find in a typical SFR. If you were trying to sell it down the road to a a family and not to Homeroom or another investor that liked the layout, you would likely need to remove the co-living additions to make it more of a standard home. As is, it is maximized for bedroom spaces with only minimal shared space. They also told me their additions can cause issues in valuation if you atttempt a cash-out refi. That, and the fact that I would just barely recoupe the additional charges they impose for initial setup in the first 3 years, turned me off of it as an investment for the time being. Still an interesting model and would provide good 5+ year profit potential, but for now I put my money in a Fundrise portfolio for hopefully for immediate returns until I am in a better spot to make a longer term investment.

Hey evyerone! So I am looking to invest with HomeRoom as well. I like the business model with them really helping get it all set up. You can also choose to take the consistent lower risk 70% of expected income model where you get that same check every month, regardless of turnover and vacancy rates. Or, you can go with 85% of actual rent recieved and share in any vacancy or downturn losses..but you also get more on the upside if rents appreciate. Initial setup is 3 years, and after you can renew for 5 years. The biggest downside I see is the added upfront cost of buying common area furnishings and paying to have extra rooms and closets added. You can recoupe that money with the over-market rent you should receive, but if you choose not to renew after 3 years and want to rent/sell as a standard SFH, you then have to tear the walls and such back down and now have a bunch of furnishings you probably need to get rid of. I plan on investing mainly for the hands-off nature of it. I have a full time job and do side work as well. It may not be the popular way as far as the Bigger Pockets community thinks, but it definitely seems like a viable, allbeit slower, way to get into real estate and build a little wealth over time. Just thought I'd share what I have learned thus far. Hope it helps and Happy New Year!

@Hilaree Fraly I am attempting to invest in MI long distance and recently put in an offer with almost identical numbers and age of the home, only all the major CapEx style items were not solid. The apparent flippers of the property basically band-aided the inside and ignored every major aspect of what you should look for in these older homes. I'm still looking for my first deal, so far from experienced, but definitely learning along the way. These were things my realtor should have noticed and we should have avoided an offer all together, but at least it was all brought to light during my inspection and all I lost in the end was the inspection fee.

Anyways, for my goals, had my property come with all the upgrades you find in yours, I would probably have purchased and be doing some minor value add upgrades right now. I have a full-time job, would like to purchase properties that have decent cash-flow in strong rental markets, and don't mind if some of my money remains parked in the property. This supports my goal of having low-to no leverage on my properties so that if I am injured on my job (I'm a firefighter) or there is a major economic correction, I am not left trying to scramble to keep up with payments on underwater rentals, and I have some cash flow to fall back on as a secondary income if needed during tough times. 

Many investors and many bigger pockets members completely scoff at this strategy and write me off as an idiot not worth their time, but they are MY goals, not theirs, so their opinions of my strategy do not matter. If the numbers and property support your goal, then do your homework and go for it. But, if you are trying to become a real estate mogul and grow quickly, then maybe this isn't the right first step. 

Now a question for you if you don't mind...would you mind messaging me with a little info on your lender? I interviewed and got approved with 5 before beginning my search, and only 1 will finance below $50k but at a 6% rate and boat loads of fees at closing. 

Thanks and best of luck!

@Joshua Griffin ...The post didn't take the tag above, so tagging you in the follow-up. 

@Dave Hutson Hi Dave! I live in Colorado Springs and work in Denver. I wanted originally to start with at least a duplex, but with a 25% down requirement on multi-families that's not an easy task, so more looking at SFRs now. I'm looking for long term buy and hold, but intend to watch the market closely once I have some rentals under the belt, and may eventually sell and try to buy some more locally if our market ever dips down some. The eventual goal is to have rentals in a few different markets. A diversified portfolio tends to be less volatile over time. I'd love to hear your thoughts on the area and any recommendations you have. Thanks!

@Joshua Griffin Hey Joshua! I'm looking for buy and hold options and have been skittish on taking on any large rehabs simply due to not having many trusted connections or great knowledge of the areas, only hours on Google. My realtor on the SE side has been sending me a lot properties in the Detroit Metro areas, but I hear that you really need to know your streets on that side of the state because it can be vastly different cultures from one to the next. Thus, recent efforts have focused a little more on the SW side. I would definitely be interested on any advice and/or connections you'd be willing to share on the area. Thanks!

@Michael B. 

I've been trying to get started in Michigan for several months now. I'm a new investor trying to get my feet wet long distance from Colorado. I've tried working with several different realtors, found what seems to be a good home inspector and some possible PMs, but still haven't found that first property yet. I thought $30k saved would give me a good start, but find that really doesn't seem to open many doors going at it solo. Thanks for posting this thread and I will be following to see if I can learn something or share a little of the knowledge I have gained thus far. 

@Trevor Camanse So do you plan on doing these flips long distance since you're listed as in St Petersburg, FL? The thought of an extensive overhaul with no local contact makes me a little nervous. I imagine you have some contacts since you spent some time in the state at least. I've already connected with a few different contacts from this thread to start building a network and get things on the road. I'd be interested in knowing your process for flips and maybe connecting if you want to share what areas you are looking, finding, and if you end up with any deals. Good luck!

@Bridget Scileppi 

I am in the same boat as you, but looking to invest in Michigan from out of state. Some things I've come to note are that multifamily properties appear to require 25% down compared to 20% down for a single family. Also, with a lot of the properties being fairly outdated, total square footage and the amount of disrepair you're dealing with could significantly increase the rehab/update expenses on larger multi-unit vs a small single family. Also, take a look at the city or municipality requirements for municipal inspections. I looked at Kalamazoo and they are required and good for either 28 months or 40 months depending on the requirements you meet, and appear pretty stringent. If you bought a property in bad shape and couldn't afford all the needed repair to get it up to code, you could be up the creek early in the race. Still learning myself so hope to see some good info on your thread. Thanks and best of luck!

@Jorie Aulston I keep hearing off market is the way to go, even though there appears to be quite a bit of opportunity even on the MLS side in the Kalamazoo area still. I will absolutely get in touch with you as I imagine being new to this I might be behind the 8-ball a bit on the ability to swing off market deals. Thanks for the look!