All Forum Posts by: Courtney M.

@Scott Kane

The "lower peninsula" is pretty massive so I'd recommend focusing on a market first, and then trying to find a broker/PM to help you out. I've invested in some of the suburbs of Detroit (Westland and Taylor) and they tend to be pretty decent cashflow cities. Other cities in the general area include Redford, Garden City, Wayne. These are all within Wayne County. I grew up in this general area and it's important to have the PM/broker team because there are good areas of cities, and bad areas of cities. 

I haven't personally looked at situations with backtaxes, I've set up searches on Zillow and will ask my broker about opportunities as I see them come in.

It's a good market but the most important component is your team!

My husband and I moved to Lake Elsinore 8 years ago. The Ortega highway connects Lake Elsinore and OC, so there was a trend of people moving out because you could get a much bigger house. The trend was people would move out after about 5 years, but lately with WFH the area is super hot. We bought our house for about $420k and it's valued at around $600k now. Very curious to see how these trends hold up. I agree in the summer it's very hot and if you grew up near the beach, it's not likely you'll stay long-term. 

@Louis Schmidt - this is a helpful calculator I found for determining non-homestead taxes.

https://www.michigan.gov/taxes...

Why does the property need to be off market?

@Jill F.

I feel like both taxes and closing costs don't get mentioned enough here. I'm looking at refinancing a property now, I could get about $15k cash out but the closing costs are $5k! So it doesn't seem worth it to me unless I can pull out at least $20k, net of closing costs.

@Katrina B.

The first key is to work with an experienced investment broker. My broker estimated that the property would be worth $135 - $140k after rehab and he was spot on.

I purchased the home in late March 2020. One of my loans was from a company called Lightstream - an online loan company that offers large unsecured loans. I applied for $100k and got approved for $65k. My payments for that loan were $613.52/month.

The second loan was a $25,000 private loan for which I paid 10% interest-only based on a yearly calendar plus a 2% loan fee. So $500 for the loan plus monthly payments of $208.33.

Construction started in April 2020 and was finished by mid-May. We had a tenant in paying $1,350/month starting in June. My PM takes the first months' rent as part of his fee, so starting in July I had income from the property that could be used against those payments.

I was worried about this property because the offer was accepted at the end of February 2020 and in March things started to go crazy with COVID. I almost backed out of the deal, but I had $8k in as earnest money and I would have lost it. Also, in talking with my broker, he said I stood to lose more money by backing out, which helped to put the situation in perspective. 

Even if the property hadn't appraised as high as it did, I still would have been able to refinance and it pay back my loans, I just wouldn't have received my own investment back. 

Also, if the market dropped, I could have just kept paying on those loans and waited for the market to pick up. That's probably my favorite part about BRRRR - as long as you buy right, there are multiple exit strategies.

I hope that helps!

Welcome to the forum, James! There's a lot to learn here. I recommend setting up some keyword searches for cities you're interested in investing in - a good way to get an understanding of how active a market is!

I have purchased 2 properties in Michigan that meet the 1% rule. These are good neighborhoods and I have good tenants.

Many people buying in states like California and Texas are looking towards appreciation. 

Everyone has different goals. For most, 1% is used as a qualifier. There are lots of other factors to consider.

@Katrina B.

The reason many investors focus on BRRRR is because of the ability to "recycle" your investment dollars.

I purchased my first property with 15% down in SE Michigan. All in it was about $25k ($87,000 SFH). That property is doing fine. However, once I went through this process once I realized it was going to take me a long time to build my portfolio.

I just wrapped up a BRRRR which I purchased with cash. I had about $25k cash of my own and took out $90k in short-term loans. The property was $84k and just appraised at $140k. Using cash-out refi, I received $98k back (after closing costs, those can be a significant chunk) and was able to pay back my short-term loans and had $14k left. So although I didn't get ALL my cash out, I have 30% equity in the property, a low payment due to current mortgage rates, and since the property is fully fixed up, I will have fewer repair expenses.

In both processes, I figure, I am out cash either way. But I will get back more of my cash and be able to pursue more investments, more quickly, using the BRRRR method.

@Steven Kassler

I actually found my broker through BP. I set up searches for the cities in which I was interested purchasing and ran into some of his old posts where he had done some rehabs. Because I have family back in Michigan, I've met him in person (as well as seen the properties). I definitely recommend honing in on your market and doing the same! For people who are looking for cashflow, I think out-of-state investing is an incredible opportunity, but it's worth the cost to fly out and get familiar with your team. Once you find one great person as well, they will typically have referrals, and all my broker's referrals have worked out well for me.