All Forum Posts by: Kurt Hines

My experience in Michigan is that getting a tenant in the winter is much harder, and rents are lower. People just don’t move in crappy weather. Once I hit October with a vacancy, I’ll offer a 6 or 18 month lease so that renewal comes up in the summer. 

The rental market is strong because Alpena is a regional jobs hub. I think a recession would take a lot of those jobs away. I don’t have strong research on this, but I think a lot of the jobs are st the hospital and at lefarge, the quarry. I’m concerned what happens if that quarry ever closes. 

I’m obviously still investing here, and I think rents will rose over time. 

On the west side of the state is Traverse City, which is a powerhouse. Local people always talk about Alpena becoming the next Traverse City. Last I looked, the Alpena population has been pretty flat at 10,000 people for a long while. If that starts to rise, then I think it might be happening. 

Hi @Yoree Washington  I have a residence about 25 minutes outside Alpena. I’ve been looking at investing there for a couple years, and just bought a four Plex a month ago. 

In my mind the biggest issue is the relatively low rents for SFR, where I am not comfortable they are high enough to make enough cash flow to cover CAPEX costs.

Since you’re not local, your other issue is going to be property management. There is one company, and I have only heard bad things about them. I’m self managing. 

There is a tourist season up here too. I have family with vacation rentals, but the main season is only 10 weeks in summer. I’ve heard people having wider luck outside that tourist season, but I don’t have any knowledge directly. 

The economy and rental market is strong right now in Alpena, but when we have a recession, I think it could be harder hit than other areas. 

Hope that was helpful!

Hi @Kyle Ostrander  

I live in Presque Isle, and I've looked at investing in Alpena. The issue I found with SFH rentals there is the rents just aren't high enough for me to feel comfortable covering CAPEX costs long term and still make a good cash flow. I think multi family is the way to go in Alpena. The good news is there is a strong rental demand. I'm currently investing downstate, but looking to invest in larger multi family (10+ units) at some point soon, either in Alpena or downstate.

I’m traveling for a long while now, but we should get together when I’m back in town. 

Good luck!

Yes to what Dan said. I do this on every property I look at, before I even think about seeing it. I entirely ignore any property cost listing on real estate sites.  The Michigan Property Tax Estimator site is gold. 

With the new tax law, HELOC interest is not tax deductible unless used for a business purpose. So, if you make a draw from a HELOC for REI purposes, you just have to track the interest from that draw, and deduct it on your schedule E.

I just had Darrell Richardson inspect a property for me in Hamtramck. He did a great job, at a reasonable price, and works with a lot of investors (and invests in SFR himself.)

http://www.michiganhomeinspectioncompany.com

Are there any specific tax strategies for someone who can no longer claim passive losses, and can't be a real estate professional due to having a full time job?

Regarding rent payments at 7/11, I looked into it and you need a certain number of units to use it. I don’t recall how many. You can also check out rentalutions.com. Great interface with lease signing, tracking, listing service, etc. the free (one unit) account does have an ACH fee of $2, which is annoying. The paid plans don’t. I’ve also used Cozy, and been relatively happy with it. I stopped a couple years ago because tenants had too many problems getting it setup, but I just started it again, and it’s been fine.

I'm looking for a property in the Hamtramck area, ideally 4+ bedrooms (or Duplex), or a wholesaler who works in that area.