All Forum Posts by: Nathan Herline

@John Tran that is a really good area to invest in. For 2.5 acres I would expect to 5-8K an acre. If it has utilities ran to it, I would expect 10K an acre.

If it’s downtown Lansing, double it!

Hi John,

Do you have a location? Land is seriously dependent on location 

Hi All,

I am working on using OPM to invest in my first properties and I am finding a lawyer that knows the laws in Michigan to help me develop a contract or LLC agreement with the investor so we can do deals together. We have an agreed upon % of each deal and both have a keen understanding of how we want the deals to work, but we need to work on the CYA part of the business.

Any information would be greatly appreciated. 

Need Lawyer in Michigan to help develop an LLC and a contract to do deals with an out of state investor.

@Alex Zyskowski basically if you are 20 miles outside of traverse city I would say rents drop greatly.

I would definitely look at 3 bed 2 bath homes, as 4 bed will be hard to come by. If you think about it the difference between a 3 and a 4 bed home is negligible. Not many people desire a 4 bedroom.

I would not take a 2 bed 1 bath house and double it. You can find 2 bed houses that are worth quite a bit due to other circumstances (pole barn, heated garage, etc)

Senior citizen apartments are all about volume, and low rent is the name of the game. They charge them rent for 500, but that doesn’t include whatever amenity costs that are included. A lot of times, senior homes have ambulances that make regular rounds and have certified nurses assistants etc etc.

I think you are on the right track here. I am agreeing with you that $200K seems fair, I just believe you should run the numbers with inly a 180K appraisal and see what would happen. It’s probably still a deal.

Comparable rents, I’d say 750 a month in that area is fair. If it’s really nice you might get 850-1000 a month, but you gotta find people that work in Grayling, Traverse city, or Cadillac to afford a place that high.

Hi Alex,

These are all really good questions.

1. 5% vacancy is only 18 days of vacancy in a year. I would suggest at least 30 days a year of vacancy and I would change this value to 10% for super conservative measures.

2. For comps, 30 minutes south west of traverse city (Interlochen?) I would use the cities around it. In this case Mesick and Bear lake are comparable areas. One of the hardest parts I’m finding about northern Michigan is the manufactured homes. We all know they tend to be metal frames and are hard to get loans for so their value is low low low.

3. I would look at comparable 3 bedroom 2 bath homes; if I’m reading your post right it is a 4 bed 2 bath home with a walk out basement?

4. Assumed risk: are you buying with cash or OPM? If OPM, do you have all the up front costs rallied into this scenario? If not, you need to do that.

5. I would be really conservative on your ARV if you think 200-250K is where it should be, call an appraiser to get a ball park, if you don't have the number of one, I can get you a contact in Michigan that appraises. Your best bet would be to run with worst case scenario numbers right? I would run it with 165 appraisal or 180 appraisal and find the bottom that you are comfortable with leaving on the table.