New investor interested in Michigan rental properties

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New investor interested in Michigan rental properties

Kyle Palacios
Glendale CA · Member since 2020 · 8 posts · 1 vote

Hi everyone,

I am new to real estate investing and bigger pockets. I live in Los Angeles and am interested in investing in Michigan. I just wanted to introduce myself, network, and learn as much as I can. 

I have been looking in the Midland and Ludington area because I have family there and they know the towns. 

Does anyone recommend other cities/towns to look into in Michigan?

I don't want to do a long distance big renovation to start off with, but maybe down the line when I get more comfortable with the process I will. 

 My goal is to buy 2 properties by the end of the year. I am looking for single family properties under 100K.

Any feedback would be appreciated. 

Thank you and Happy 4th of July!

-Kyle
 

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
6y

PS.  I forgot to add...  One city with strong growth, a diverse economy and generally a business-friendly attitude is Grand Rapids.

5Reply
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  • Patricia Gilroy
    Investor · Naples FL · Member since 2020 · 6 posts · 0 votes
    6y

    @Kyle Palacios

    Traverse City is really growing

    0Reply
  • Kody King
    Midland, MI · Member since 2016 · 12 posts · 6 votes
    6y

    @Kyle Palacios

    Are you looking for something turn key? Do you want to be more of a passive investor?

    Kody

    0Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    Thanks @Patricia Gilroy ! I'll check it out and see if I have any contacts there.
    @Kody King

    @Kody King Hi Kody, 

    I am looking for something more turn key. Simple things like painting would be OK. I just don't want to start off with installing new floors, cabinets, counter tops, roof etc...

    I am looking to be more of a passive investor right now. I have read David Greene's books on BRRRR and long distance real estate investing. They were interesting and something I would consider doing maybe early next year once I am comfortable with buying and renting properties. I will be using a property manager. I want to identify a location with good potential then start networking with real estate agents and property managers.

    Kyle

    0Reply
  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    6y

    @Kyle Palacios

    Just throwing in my 2 cents.  I've never invested in any of these markets, but have invested in many markets around the country and know Michigan well.

    Since you are not looking to invest in your back yard, you have more flexibility.  That means, you should broaden your thinking to include more information regarding market selection.  If you'd have to fly here anyway, what difference is a flight plus a 2 hour drive or a flight plus a 4 hour drive.   Broaden your scope. I'd look at population growth, economic drivers, diversity of employment, landlord friendliness, etc. 

    Luddington is a fairly small market.   Midland economy is dominated by Dow Chemical.  Factor those in when comparing and contrasting markets.

    Good luck.

    2Reply
  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    6y

    PS.  I forgot to add...  One city with strong growth, a diverse economy and generally a business-friendly attitude is Grand Rapids.

    5Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    @Greg Scott

    Hi,

    Thanks for the feedback. I am considering other areas in Michigan as well. It seems like Detroit metro area has good potential. But risky at the same time.

    Any thoughts on Lansing or Grand Rapids?

    Kyle

    0Reply
  • Deepak Bhatnagar
    Member since 2020 · 8 posts · 2 votes
    6y

    @Greg Scott I agree that if you are not investing in your home town or around areas than its worth considering expanding the area nd look at which city have a good potential.

    0Reply
  • Trevor Finton
    Member since 2018 · 19 posts · 6 votes
    6y

    @Kyle Palacios, I agree with @Greg Scott regarding the relative smallness of Ludington and limited economic diversity of a town like Midland. I invest in Grand Rapids and it's growing (perhaps too much so). Great size, great diverse economy and strong rental market. I live here so it's easier at the moment, that said $100k will probably not get you anything at all right now. I have strongly considered Lansing and Kalamazoo. Both have much more reasonably priced properties with solid rents and properties don't fly off the MLS nearly as fast. Spend some time comparing neighborhoods for rental prices vs purchase prices and how long rentals are on the market compared to number of inquiries. If you want to compare the macroeconomics of a few cities I like to use https://datausa.io/ . Also be sure to compare tax rates. 
    A final thought, only paint is nice but flooring, even LVP installed isn’t horribly expensive especially if you can get a good purchase price.

    Happy hunting. If you end up in GR or Kalamazoo and need property management I’d recommend my PM. 

    1Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    @Trevor Finton

    Thanks for the great information!

    0Reply
  • Ryan Kuja
    Rental Property Investor · Holland MI · Member since 2014 · 79 posts · 27 votes
    6y

    Hi Kyle. I invest in the Grand Rapids market. Happy to answer questions. Also, I have a 3 bed, 2 bath rental property in selling in GR. 113K, rents for 1250.

    0Reply
  • Rich Sherlock
    Member since 2016 · 3 posts · 1 vote
    6y

    @Ryan Kuja

    Hi Ryan, I own property in Grand Rapids. Where is your listing located?

    0Reply
  • Josh Walker
    Investor · Norman, OK · Member since 2017 · 75 posts · 53 votes
    6y

    @Kyle Palacios - I really like the Lansing area. I’m going to tour some small apartments there this weekend.

    0Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

     @Josh Walker 

    I will look into Lansing more. I have no idea where the good areas and bad areas are. Do you recommend a general area to check out? 

    Thanks!

    0Reply
  • John LyszczykPro Member
    Rental Property Investor · Marine City, MI · Member since 2016 · 146 posts · 230 votes
    6y


    @Kyle Palacios I am a Rental Property Investor/Real Estate Agent in the SE Michigan market. I have rentals in and around the Port Huron, MI area. This market has rentals <$100K with high demand. I listed a 2 bed 1 bath upper apartment and received 60 inquiries in 8 days. Needless to say, there is a need for rental housing in this area. 

    If you'd like to know more about the markets I've invested in let me know. I can provide insight and forward you potential deals if you're interested. My brother and I currently self-manage our rental portfolio, but would be open to managing properties for other investors as well. 

    1Reply
  • Fernando DomingoPro Member
    Long Beach, CA · Member since 2016 · 61 posts · 17 votes
    6y

    I have properties in Royal Oak and Lincoln Park that were just rented in the last couple of weeks with a very high demand as well.  Found multiple renters in a couple of days.

    1Reply
  • Joel K.
    Investor · Grand Rapids, MI · Member since 2018 · 20 posts · 9 votes
    6y

    Hi @Kyle Palacios ... My partner and I invest primarily are the Grand Rapids/West Michigan area. We actually have a turnkey rental available in Norton Shores right now (Muskegon area). That's within your buying criteria on numbers. If you want me to send you more info, let's connect on there and you can inbox me.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    6y

    Kyle, don't make the common mistake of equating the City of Detroit with Metro Detroit! 

    Metro Detroit is very safe to invest in, being no different than Ludington, Grand Rapids, Midland, etc. Just find a property with the return you want.

    [email protected]248-209-6824
    Logical Property Management4.9460 Reviews
    WebsiteView Page
    0Reply
  • Janani Kalpathi
    Rental Property Investor · Los Angeles, CA · Member since 2020 · 50 posts · 23 votes
    6y

    @All - I just wanted to say thank you for the inputs on this thread so far! We are also looking into buy-and-hold MFH investing in MI as it's local for us. The areas and feedback provided so far have been super helpful and I've been using Asana to capture the info and plan our next steps. 

    Also, since BP is all about knowledge sharing.. for any newbie investors looking to start developing systems and using tech to treat REI as a business, check out Asana - a pretty cool free project management software. 

    Thanks!

    Janani

    1Reply
  • Ben Oswald
    Investor · Los Angeles, CA · Member since 2020 · 1 post · 0 votes
    6y

    Hey Kyle

    I live in CA too & have LTR in Michigan.  Careful calculating your taxes, you take a hit for not living in / homesteading properties there.    Use this & estimate the SEV, but I recommend padding it a little...

    https://treas-secure.state.mi.us/ptestimator/ptestimator.asp

    0Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    @Ben Oswald

    Hi Ben,

    Thank you for the information and tip.

    Any other advice would be greatly appreciated since you are investing from California like I am.

    Kyle

    0Reply
  • Jake Thomas
    Residential Real Estate Agent · Grand Rapids, MI · Member since 2013 · 803 posts · 689 votes
    6y

    I work with several investors investing in the Grand Rapids area. You can easily hit the 1% rule here and expect quality tenants. I work with a large property management company that makes your investing experience very easy. 

    0Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    @Jake Thomas

    Any suggestions on which areas of Grand Rapids I should focus on?

    0Reply
  • Nick Paquet
    Member since 2018 · 10 posts · 4 votes
    6y

    @Kyle Palacios

    The west side of GR is growing rapidly. As more and more Grand Valley students are choosing to live near the downtown campus, many businesses and investors are following. If college age and young adults are your target renters, this would be a great place to look.

    Most of the family neighborhoods are seeing house prices skyrocketing. The best way to get a house in Grand Rapids under 100k would be off the market or through a wholesaler.

    Muskegon would be the next city I would invest in outside on Grand Rapids. Prices are low and there is a lot of potential for growth.

    If you have any questions about property managers or contractors in the area feel free to message me!

    Nick

    0Reply
  • Ujwal Velagapudi
    Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
    6y

    I've lived and worked in metro Detroit, Lansing, and Grand Rapids and I'd definitely would lean towards investing in Grand Rapids first and then metro Detroit. GR has a lot more growth potential, but Detroit does have some nice suburban pockets. I would just be weary of the automotive world and its impact on Detroit, but also MI as a whole with all the suppliers and sub-industries. I would stay away from Lansing, not enough growth there and I could never pull the trigger to buy some multifamilies there, just felt more stale than other MI cities. I've invested in Saginaw & Flint, and even though they were solid investments, I wouldn't advise it right now as their local economy isn't sufficient enough for me to invest again. Not too familiar with the Midland or Ludington market, but I do agree that Midland's economy is primarily a one company town (Dow), so it'd be too risky for me to look there (especially in current times).  

    0Reply
  • Kyle Palacios
    OP
    Glendale CA · Member since 2020 · 8 posts · 1 vote
    6y

    I just closed on a duplex this week. If anyone needs a great realtor in Grand Rapids, let me know. 

    1Reply
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