All Forum Posts by: Ryan Tongue

Hi Amanda, I'm in a similar boat as you. I'm looking to purchase my first property, though I'm not able to afford homes around where I live, forcing me to look out-of-state. While I don't have any advice to you when it comes to what you should do, I might recommend that you check out Long-DIstance Real Estate Investing by David Greene, the host of BP podcast. It's helped me get over some of my fears when it comes to investing afar. I've posted a link to the book below. Good luck!

https://www.amazon.com/s?k=long+distance+real+estate+investi...

Quote from @Skip Reath:

Hi Ryan. I have a few commercial buildings in GR but have found more success in SFHs in the Detroit Metro area. Although starting out you might want to get into a duplex and house hack wherever you end up living after school, if you want to do a value add project. I can tell you it is hard to manage rehab projects remotely. Good luck in your RE journey!

Hi Skip, thanks for the response. Why do you think you haven't found success with SFHs in Grand Rapids and surrounding areas? I'd be very curious to hear your opinion. Thanks again.

Quote from @Albert Bui:

Quote from @Matthew Kwan:

HI Ryan, 

Happy for you on starting your Real Estate journey! You can always start off on house hacking a multifamily in MI 1-4 units with min 5% down or 3.5% down for FHA. This will allow you to acquire more rental units and also being able to use the vacated unit rents at 75% to help your debt to income ratio DTI.

Happy to help and address any scenarios that you may have!

@Albert Bui @Carlos Valencia

Just careful on the 3-4 unit FHA properties that we'll be subject to self sufficiency rule however FHA is a good option to finance with on 1-2 unit owner occupied properties.

SS Rule is not easy to meet when dealing with expensive west and east coast or urban area 3-4 unit properties. However in the midwest it is typical to be able to "meet the self sufficiency rule for FHA."

@Matthew Kwan

@Carlos Valencia

Thanks for the idea, and I'd love to start with an FHA here in Michigan on a multi-unit property, though doesn't an FHA loan require the property to be my primary residence? If so, then I don't think I'll be able to pursue this option as I'll be living in Utah for the next 18 months at least. I'd love to get my first property underway sooner if I can. Any other ideas?

Quote from @Ash Hegde:

Nice job saving up 50k to get started! You can BRRRR without conventional financing or having all cash. For the purchase and rehab, you would start with a hard money loan, which generally requires 15% down. After that's finished and it's ready to rent, you would move to a DSCR loan for your long term financing. Neither of these consider your personal income, though they will consider your credit, so make sure that is in good shape.

Hi Ash, thanks for the idea. My understanding is that a hard money loan is an umbrella term used to describe any short term loan from an individual/company rather than a bank, is that right? If so, how does an investor typically find hard-money lenders in his/her local area? Also, when you say that I could move to a DSCR loan for long-term financing, do you mean that once I've acquired the property and it's cash flowing properly, I would then qualify for a DSCR loan (depending on my credit) that I could use to pay off my hard money loan? Thanks for the tip!

Quote from @Logan Laperriere:

Hi Ryan, I was in your shoes about 10 years ago when I graduated college. West Michigan is a great place to invest in rental properties. I personally own properties in Grand Rapids and Kalamazoo. I also own some commercial properties in Metro Detroit. I would be happy to talk with you some time about investing. Have you ever considered a DSCR loan? that may be a good option for your situation.

Hi Logan, thanks so much for responding. I'd love to set up a time to talk. What's the best way for me to contact you outside of this forum? I'm also not very familiar with a DSCR loan, though my understanding (which I'm sure is flawed) is that a lender evaluates a property's cash flow rather than my income when deciding whether I qualify for a loan. Is this possible for a property I do not yet own? Thanks again.

Hi all!

My name is Ryan Tongue, and I’m rookie investor looking to purchase my first property! I’ve been stuck in the analysis paralysis phase for a while and have never posted before. But enough of that, let’s get going! I apologize for the long post, though I’m looking to be as clear as possible for you guys.

A little bit about me: I’m from West Michigan, and I’m currently living in Salt Lake City pursuing an undergraduate degree in mechanical engineering at the U of U. I’m 22 and I have about 18 months until I graduate. During the summers, I’ve been working as a door-to-door salesman in SC, TX, and UT, saving as much cash as I can to put towards my first rental property.

My goal is to build a portfolio of long-term rental properties in West Michigan and surrounding areas. I've read David Greene's Long-Distance REI, among other books, and understand that a good investor shouldn't limit his or herself to their own backyard, though between the network I have in West Michigan and my basic understanding of which areas are good/bad/on-the-rise, I want to get started there.

I’ve reached a point where I feel I have a thorough understanding of the principles behind the various strategies that a person might utilize when investing in real estate, and I’ve also saved up a sum of cash that I believe to be enough to get started. However, there are several barriers I’m finding difficult to hurdle due to my lack of experience. What I’m looking for now is a mentor or even just advice.

To give you an idea of what I'm hoping to find guidance in, the investment plan I had in mind is to find properties that need work or are owned by motivated sellers that I can purchase for 80 cents on the dollar, or as close to as possible. I'd like to add value to the property through a rehab project, and then rent it out long-term. My hope is that after buying the property under market-value and forcing appreciation through rehabbing, I'll have significant equity in the property that I can leverage through a HELOC or something similar to recycle my capital and repeat the process with more homes. Essentially, I'm looking to BRRRR, though I won't be able to start with an all-cash offer as I only have around 50K to work with. I'd also like to do aspects of the rehab myself, and I know contractors in my circle that would be willing to help me learn how.

The biggest issue I face is that I don't qualify for conventional financing since I'm still in school and don't have consistent income, so I'll need to find a qualifying partner or pursue creative financing which is something I'm not sure how to accomplish. I'm also limited in the amount of time I will physically be in West Michigan prior to when I graduate in May of 2025, which makes applying for an FHA and house-hacking difficult. I've thought about house-hacking in Utah while still in school, but the price-to-rent ratios seems so high around me that it would be difficult to cash flow. Aside from these concerns, I'm not confident in my ability to assess rehab costs, or what a property's ARV might be. I've reached a point where I feel that I should be asking "who" knows these things and can help, rather than "how" I can learn everything myself.

I realize there are gaps in my understanding of what I’d like to accomplish, and that today’s market is a controversial one to invest in. I’m desperate to move this forward, however, even if it means being a fly on the wall for someone doing what I’d like to do if I’m not at a point to be able to invest myself. If you’re an investor in Michigan that is willing to let me shadow you on a deal, I’d love to provide value to you in any way I can. To all others reading, advice on what you think I should do would be greatly appreciated!

Often when I express my dreams to others, I’m met with responses along the lines of what I can’t do. If there’s a platform that exists that will instead view my barriers as puzzles to be solved, I believe it’s this one.

Thanks for reading,

Ryan