Six Unit in Michigan Under Contract

[Ryan Kuja]

Hi BPers!

I've been a member here for a while and actually live down the street from the man, the myth, the legend, Mr Brandon Turner himself in the wonderful albeit very strange town of Aberdeen, WA. My wife and I moved here from Seattle on New Year's Eve last year. We bought a HUD foreclosure what was in really good shape: 2,000 sf plus finished basement, 3/2.5 with a bonus room for $80,000. We are doing all the requisite cosmetic fixes and hope to sell next year for a good profit, through the market is soft so we may need to rent for a year and see if it starts to improve. Anyway, I've been scouring the MLS for months looking at possible rental properties (mainly 2-4 unit and some SFR) in the area and nothing has worked out thus far. My wife is from West Michigan, and so about a month ago we decided to re-focus our search in the Kalamazoo, Grand Rapids, Battle Creek area. Just yesterday we went under contract on a 6 unit in Kalamazoo. The units are 2/1 and rent for between 550-600 month and is fully occupied. We are both filled with excitement and fear as we havent seen the property (but have a good friend who is going to go to the inspection next week and check it out. He is an investor so we trust his thoughts, as well as what the inspection report reveals....hopefully not much). To be honest, I hope I never even see the property, just provide a good, safe living situation for the tenants and collect some solid cash flow each month.

All that being said, anyone have any tips for out of state investors? Anyone else invest in Kalamazoo?

Thanks!

[Michael Glunk]

@Ryan Kuja

Re-reading my previous post, I meant to include one of the tips to see if it was the type of info you were looking for and would want to learn more about. But I was multi-tasking during a boring client call at my W-2 job and hence my vague post. Sorry about that.

In Recap and expand a bit...

I'm in a similar situation as you with investing in Kalamazoo. I've learned a lot by reaching out to some BP members and done my own due diligence. The Kalamazoo market offers a lot more interesting cash flow opportunities compared to my current market in Colorado. There can be some spotty areas, so good to hear you have a friend in Kalamazoo. I've got the same situation where I leverage a buddy from this area as my boots on the ground. 

One thing to think about are the terms of your rental leases. Most property managers align their leases on the same timing. This is driven by the local universities. A large majority of the turnover happens around the same time. Which is ironically now during the July/August time frame. Yes there are those out there that have leases that are not on this schedule. But after talking to numerous property managers and local investors, this was a point that was brought up again and again and something to consider.

Beyond this there are city certification requirements if you are in the City of Kalamazoo boundary and other historical building regulations if you purchase a historic home. More than happy to share more info if this is the type of stuff you are looking for.

Best,

Mike