All Forum Posts by: Andrew Powers

Welcome to BP! I am in south east Michigan as well and have a house hack in metro Detroit near 9 mile. I've seen lots of activity about Detroit here in the forums, less about the metro area. Either works depending on what your looking for in REI.

It seems that metro Detroit inventory is mostly SFH and in Detroit there is much more small multifamily. Based on my research anyway.

It depends where you want to focus your efforts... SE Michigan has lots of auto, but also solid mortgage and healthcare industries as well as college towns that not alot of people talk about here. Ohio obviously has lots of potential as seen in the forums.

Anywhere can work! What is the best for your goals? That's what I'm honing in on myself.

Welcome! I recommend to write down what you're good at / what you like and compare it to REI strategies that require little money or can be started quickly. House hacking is great. Wholesaling, bird dogging, mobile home flipping, etc work. Depending on what you want to do, can you get a job at a local property management company, construction company, etc? That can help you gain experience and meet local real estate related people

Either works... what is your short and long term goal with this property, and also REI strategy? Is the location good for airbnb? Compare the numbers between projected airbnb income vs traditional rental income. If you don't know, search the forums or reach out to local investors for how to understand rent rates in your area for airbnb and traditional rental.

I agree with the above, try to buy it yourself. Terms could be favorable since you know them.

If they don't want to sell to you, you can teach them some of the benefits of REI but I wouldn't approach it as convincing them.. everyone has different goals.

But maybe you can get creative with them. If they want to sell to you and you are capable to purchase, great. If not... you could do the rehab / flip and somehow split profits, you could do the rehab / property manager the rental for them, etc. Either way can gain you experience!

What is your risk taking level, funds you have on hand, exit strategy for each, ... 

if its the first property, it's less risky to buy small. If you have lots of $ then maybe bigger is fine. Do 1 bd or 2bd properties sell easily in that area or is 1bd hard? Can 1 bd property be converted to 2 bd? 

5% of rent per month... some use 5%, some 10%, etc... depends on how conservative you want to be and also property condition. For example if property was recently rehabbed, then 5% is probably fine. On most properties I analyze I start with 10% repairs, 10% cap ex, 10% vacancy, 10% Property MGMT to be conservative, then work my way down (if possible) as I understand more about the property condition, the location, etc. Better to be conservative with numbers than not... or else you risk your $

@Alexander M Stanton in my area, IIRC, there can be a maximum of 4 different last names living in a house. So if there's something similar in your area, maybe you can rent the 5 rooms where 2 of them are rented to a pair of brothers or sisters... please check local laws though! Seems like laws around you have a occupancy # limit so that may not work.

Either way that seems like a cramped house, 5 people sharing 2 baths and no living room. Maybe the house layout is alright and I understand it's a younger crowd. Like @Steven Foster Wilson, you will need to consider how utilities, common spaces, common space items are shared. For my house hack rooming situation, I have a roommate agreement along with the lease which gets into those details... I.e. need to keep common areas clean, utilities and common-use items are split evenly among roommates no matter how much/little each person uses, etc. They sign this upfront. It's not perfect but it has worked so far.

@Alexander M Stanton what are your concerns?

There seems to be a few channels on YouTube for MH investing with LOTS of content, I suggest looking there! I recently watched a couple of videos by John Fedro and Propelio

It's a rule of thumb, not a hard requirement. Lots of people use the 3x rule since it works. You want to rent to someone who has enough income to cover rent and their living expenses. So with 3x rule... 1/3 of their income goes to rent and the other 2/3 goes to their everything else. On a macro scale rent rates, cost of living, income rates tend to go hand in hand. But for some cities, the income rule may need adjusting (i.e. if rent rates rose rapidly in a short amount of time and wages haven't caught up).

I use the 3x rule in my area as it works... actually all my candidates tend to be well over 3x, but that's because I rent by bedroom where rent rate is less than a house...

I don't rent to college students currently but I've seen that some have their parents co-sign. I suggest looking around the forums or maybe someone can chime in.