Grand Rapids Investing

[Kevin Andringa]

Hello,

I am a new investor in the Grand Rapids area. I currently house hack a three bedroom condo in Grand Rapids I purchased in 2017. I am looking to pickup another property in 2019 but am constantly told to, "wait for the next downturn". It is difficult to say what the market will do in the next few years in our market however, I have 20k ready to put into my next deal. Should I pull the trigger on anything that cash flows $300+ a month?

thank you!

[Chris Winslow]

In my opinion, waiting for the next downturn is not the best option. I agree that it still seems like something is coming soon but we can’t predict for sure when it will actually happen. I have been listening to some older podcasts and there are a few where people are talking about how overheated the market was even since about 2014 (5 years ago). Imagine all of the gains you would have seen from appreciation and cashflow if you had been collecting for the last 5 years.

That being said, my guess is that we are closer to the next downturn vs farther away but even if you buy and it does happen, I think that is okay as long as you are investing for the long term. I say this because:

• 1)If you dollar cost average and buy property both when the market is up and when it’s down you reduce your overall volatility/ the swings in prices of properties that you purchase
• 2)You will continue to gain experience and be more equipped to handle more upcoming deals
• 3)You are making $300 per month cashflow (I think this is probably the most important). If the numbers are solid then it seems like a good idea. Even if the property loses a lot of value in the short term and your net worth drops, you will still have your cashflow and it is very likely that it will eventually climb back up based on previous markets.