All Forum Posts by: David Hall

Some of your questions are going to vary by manager, management style, neighborhood, school district, etc.  I own over 100 units in Lansing, we self-manage and I am a local broker/agent, helping investors invest in Lansing. I've answered some of your questions below.

Projects in the next 10 years (expected start and end date) - There are tons of new projects being talked about in Lansing.  Some big skyscrapers are being planned for downtown (https://lansingdowntown.com/new-vision-lansing) and the south side is seeing developments as well (https://www.lansinggrowthfund.com/).  The city wants to invest in more urban areas into larger projects and the hope is that the surrounding neighborhoods will grow in desirability and demand.

Average household income - Most of Lansing renters are blue collar support workers.  There are tons of manufacturing, insurance, healthcare and support workers for colleges and government jobs.

Crime score - check out crime mapper and other sources to look at the specific neighborhood you've targeting.  There are good prices, and good areas, sometimes these overlap, sometimes they don't.  Talk to a local professional to get more specifics on this one and try to drive the area if you can to figure out where you'd be comfortable investing.

Average home price - The average home price is $160k in the City of Lansing.  There are TONS of opportunities to buy properties cheaper and rent them.

Population growth past 10 years - depending on your source, you should see stagnant growth, a slight uptick or a slight decrease.  Overall, being a capital city, certain jobs will never go away. 

Who are the major employers - State of Michigan, GM, Hospitals, LCC, MSU, Auto Owners, Farmbureu, etc.

And vacancy rate - 5.6% according to a quick google search.  Ours is between 5-10%.  Some of that is on purpose because we inherited tenants that we didn't want or because we had planned improvements scheduled.  It also depends on your management style, old guys like to never raise rent and never have a vacancy, newer investors like to push the limits of what rent they can get, and as a result, often have higher vacancy.  There is middle ground based on what your goals/needs are.

Job growth - Lansing has experienced positive job growth for the last 5 years, there are tons of municipal construction projects driving a lot of contractors to the area that need housing.  The new McLaren hospital on the east side of Lansing was recently built providing 28,000 jobs to the area.

Tenet demographics - 46% of residents in Lansing are renters.  

& government and taxes - Ingham County is not the most landlord-friendly place, but other areas are far worse.  We have code compliance required every few years and the city's goal is to avoid slumlords, which is a good thing.  Evictions take longer than they should, but overall, with good management and a good property, most of these headaches are minor.  Property taxes are more affordable than in other capital cities and overall, I don't think are cost-prohibitive for making an investment.

In summary, I think Lansing has a long-term way of providing steady returns for investors due to the diverse employment landscape and it is a great place to invest.

I buy in Lansing Michigan! [email protected]

Did you end up jumping into a flip this year?

Your best bet is going to be to join the facebook groups, there are 3 major ones in Lansing. Post in those groups asking to be added to buyer's lists and message everyone who says they have deals. Come to the meetups, I host two of the monthly.  There are always people bringing deals and buyers looking for deals at the meetups.  Post on craigslist, post on marketplace,  get A LOT of lines in the water and you'll be more likely to catch a fish.

Network as much as possible.  Go to meetups, offer to help people FOR FREE, ask for book recommendations, read the books and follow up with the people who recommended them.  Right now you don't know what you don't know so listen to podcasts, get out there and ask questions.  You'll likely start to gravitate towards one type of investing based on your personality, then double down in that area.  There are so many ways to do real estate investing so start wide, then go deep!

Hey Sonny, I'm from the West Side of Lansing and own rental properties in the area.  As far as what type of neighborhood, the further you get from downtown Lansing, typically the less crime.  So for the Waverly area, the further West you go, probably the less crime you'll see and higher values you'll have.  Overall though I'd say the Waverly area is a great investment location, lots of jobs, shopping and schools.  Slow steady growth like you should expect in the midwest.

Greetings Alec.  To connect with investors in Lansing Michigan your best bet would be to come to our free monthly RE Meetups.  We host them monthly at Tony M's Restaurant the last Thursday of the month at 6pm.  This month on January 26th we are having a speaker coming to discuss proper Mindsets when it comes to Goal Setting.  But normally the speakers are real estate related.  I've raised hundreds of thousands of dollars from the investors in the group.  Lots of partnerships, contracts and friends have come out of networking.  We'd love to have you.  Message me if you need more detail.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $118,000
Cash invested: $27,000
Sale price: $168,500

This was meant to be a quick wholetail deal. In this market, taking longer than expected only helps!

What made you interested in investing in this type of deal?

The reasons I took the risk: The property is in a desirable location and the house across the street had just sold for $180k. The cost of renovations was low as I only planned to fix a basement water issue, deep clean the home and swap a few fixtures. My Plan B was sold in if it didn't sell I could rent it for at least 1% of the purchase price.

How did you find this deal and how did you negotiate it?

A wholesaler brought me this deal and it had pretty thin margins. I thought the ARV would be around $150k and the asking price was $120k.

How did you finance this deal?

I buy all my deals with a hard money lender who only requires 10% down and I had just sold another flip property so I had the money to do this without a partner (which is my typical model).

How did you add value to the deal?

A light flip, $11,000 total. Fixing the main issues with the house which was grading, water in the basement and the basement being unfinished.

What was the outcome?

Conclusion: This is not a home run project. This was more of a "Wholetail" deal where I put in minimal effort and minimal capital and made a profit. I ended up putting in $23,000 of my own money and made $18,000. The appeal to this deal is it was close to home, a good area, minimal work, no partners needed, and easy to manage while I had other things going on.

Lessons learned? Challenges?

Always use a title company you trust, would have saved me $2500

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a realtor and ran the project myself

Hey Chad I can chime in here as well.  There are a lot of different brokerages in Lansing and each have their own pros and cons.  I myself work at Keller Williams currently.  I wanted a larger brokerage with more opportunities to network with other agents who might bring me leads.  Also agent commissions is a large portion of my income currently so I wanted a reputable company that could support me as I grow my team.  Larger brokerages however have larger fees that agents pay.  If you are not looking to do a lot of volume, don't care about brand and don't want training, offices or bells and whistles, I would look at some of the smaller brokerages.  Come to our RE coffee which we host every month or our monthly evening meetups (that last Thursday of every month, look up Lansing Real Estate Meetup on facebook to join our group along with 1500 other members).  At both meetings you can talk to myself and other agents who are already doing what you want to do and see where the best fit might be for you.

I am biased as I own rentals in Lansing, live in Lansing, and am the best investor-friendly in Lansing, but yes, Lansing is a great market for all the reasons you mentioned.  Diversified industries.  Our market is not fragile and should remain linear and see steady growth for a long time.  Hospitals, manufacturing tied to GM, colleges/universities, and government jobs.  

Rental market is experiencing growth.  I'm raising rents in all my units and tenants aren't complaining and we haven't had one move out due to a rent increase.  Rentals are in short supply and most property managers I know have waitings lists, vacancies are very low. 

Foreclosures are almost nonexistent. If you are getting foreclosed on, it is not because there is a lack of value (like in 2008). Most borrowers in trouble have been bailed out due to inflation. There isn't a lot of foreclosure inventory, but there are some. The best option right now is buying rentals from landlords who are retiring. These are your typical BRRRR deals where you can make some repairs, push rents and produce a stable, producing asset. Lansing has several options for these.

Lastly, City of Lansing is not the most "landlord-friendly" area.  For me the returns you can get outweigh the hassle.  There is a requirement to have your rental inspected every three years and the city tends to be someone inconsistent with their requirements and repairs.  If you hire a manager most of those items won't bother you very much and you can still get the cash flow and positive outcome you desire.

Let me know if you have any other questions or want help finding a rental property.  But I think Lansing Michigan is and will continue to be a strong rental market.