All Forum Posts by: Ben Durwood

@Erick Cervantes Did you say you make $90K but haven't filed your taxes for the last two years?  Why the heck aren't you filing your taxes?

Hey @Dan Cournoyer - it's a good question, and I actually started a thread a couple years back on whether tenant or landlord should pay for water in Grand Rapids here - https://www.biggerpockets.com/forums/52/topics/461317-should-landlord-or-tenant-pay-for-water-in-grand-rapids.

The consensus seemed to be that water should be paid by the landlord in Grand Rapids.  Normally, I would like to pass as many of those costs to the tenant as possible, but it is typical for landlords to pay water in Grand Rapids, and the city can put a lien on your property if it's not paid.  

@Chai Jonn You'll definitely be able to find something in Grand Rapids that meets those numbers.  But, I would challenge you to look for a property that cash flows better than that, because I just don't think you're going to get a very good return buying a property for $175K and leasing it for $1,300. 

Keep in mind that property taxes are high in Grand Rapids (close to 2%), landlords typically pay for water, and repairs and maintenance costs are higher in Grand Rapids than other areas because you're dealing mainly with properties built in the early 1900s that require a lot of upkeep.  Plus, it looks like you'll be investing from out of state and may need to pay a property manager.  If you're also borrowing to finance your investment, I think it's very likely you'll be cash flowing negatively with a purchase price of $175K and rents of $1,300 in Grand Rapids.  

@Douglas Spence  I'm curious how you know you got a sweet deal when the appraisal came in so much lower than expected?  How did the appraised value compare to the purchase price + rehab costs?

Hey @Catherine Lacey - I own a small multifamily not far from there.  Mine is in Heritage Hill and also has 2 bedroom 1 bath units.   You are in a very good location and I'm sure would have an easy time selling.  But I'm surprised you're only currently getting $700 a month - it must be in pretty rough shape?  How big are the units?  Assuming these aren't tiny 2-bedrooms, I think you should be able to get the kind of rents you're talking about without doing really high end renovations.  Like @Charles Kao said, I think it could just be a matter of finding the right team.  I'm also remote, and my property manager managed the rehab of my units, and I'd be happy to give you their info. if you're looking for a referral.  

Hey @David Kramer - I'm curious what turned you on to the Grand Rapids market?  It's funny - I also live in San Diego and own a couple investment properties in Grand Rapids. 

For your question on central air - I would say it's a plus but not a requirement.  You can certainly still find a good tenant  without central air, although tenants do prefer it.  As far as the rent premium, my guess is you would get an extra $50 a month or so.  

What area in Grand Rapids are you considering?   

Hey @Brett Kramer - let me through another option in the mix.  What about refinancing at that higher appraised value while rates are still low and then using your extra cash to help fund your next purchase?  That would allow you to access some of the equity you've created for yourself without selling.

I'm actually in a similar situation as you.  I bought a single family in Henderson in 2012 for $105K, and I just refinanced at an appraised value of $230K.  I've taken close to $100K of cash out through refinancing and am using that to continue investing.  

@Wilson Lee I have worked with Lima One before and agree that they are a good solid company.  My loan closed smoothly with no major complaints.

For a fix and flip, though, you'll find the best rates with LendingHome.

@Account Closed  I think the fact that your purchasing has slowed down is just a sign that you are a disciplined investor.  Real estate and the stock market are toward the tail end of a long bull market.  Warren Buffett in his investor letter he released this morning said that Berkshire is having the same problem - they can't find companies to buy at a reasonable price even though they have plenty of cash to use.  So you're in good company on the sidelines.  

@Robert Schumacher That's impressive that you went from SFHs and four-plexes to a 74 unit complex.  I am curious how you made that transition. Did you find the property through a broker?  Finance with a commercial loan?  Thanks for sharing.