All Forum Posts by: Dan Sundberg

Thanks! Will keep you posted.

@Aaron Provencal wow! You never know unless you ask.Congrats again. 

Thanks @Ezekiel Ayers that's really helpful. Am I doing my math right on this, annual property taxes for a rental are around 5%? 

Thanks for the details on the rental program too. That sounds pretty straightforward and we've got something similar here too and it's not bad. 

Hey BP!

I'm looking for some advice on investing in Michigan generally, and/or Grand Rapids, MI specifically. 

I've successfully completed a few house hacks in California, and am looking into branching out to the Midwest with small to mid multi-family to scale a bit faster. But I feel like I don't know what I don't know when it comes to running numbers in the midwest. 

What are costs associated with snow/harsh winters? Do property taxes fluctuate? What are insurance costs like (we've got a lot of local variability around fire insurance for ex.)? I've noticed a lot of multi-family buildings are pre-WWII housing inventory - are there restrictions or issues common with that (historic districts, crazy high utility costs, etc)?

Also, anyone local to Grand Rapids have any advice on investing there? I went to school in Michigan and worked in GR for several years, so I'm fairly familiar with the areas, but not as an investor. And that was more than 10 years ago.

Thanks!

Nice project! What part of Sac was this in? And how did you find the deal? 

Hi @Sergey Tkachev - could you send me the doc as well? Getting back out to the meetups is my 2025 resolution!

@Nate Jenks - @Andrew Postell did a great job clarifying the big challenge you'd run into pulling cash out with such a low down payment. 

The question to think about is - is that such a bad thing? BRRRRs are a useful tool for the right scenario, but it sounds like you have the opportunity to buy a house with basically no cash in, and with probably some of the cheapest financing available. If you can buy something habitable, and rehab it over time while you live there, that could be a home run of an investment when you look at your return on investment, especially if you house hack.

Sure you may leave cash in the deal, but if you buy right, it could still be an extremely profitable and low-barrier to entry way to get into real estate. I'm on my 3rd house doing just this, and it's been great. That said, I'm looking to BRRRR this upcoming year, but that's only because the first 3 properties allowed us to build up enough capital for this strategy to make sense.

Hi Nate - It'd be worth asking the lender for a detailed breakdown of closing costs for this program, as well as an estimate of the interest rate you'd get with today's rates (they'll probably need to pull your credit to do this). Then compare that with your normal 30-year fixed. Often low down payment/no PMI programs have those costs built in elsewhere in the loan.

Also, make sure there aren't additional restrictions on the property condition, compared to a conventional loan. 

It'd certainly be nice to keep all your cash on hand for property rehab to make the BRRRR work. Also be aware that your cash-out refi will likely need to be 75% - 80% LTV, not 99% like the initial financing when you run your numbers.

Credit unions often have great programs, so hopefully this is one of them!

Good luck!

You know I'm not sure if it's required for STR or not. However I'm almost certain MTR would require it, and definitely LTR.

I have a MTR in the Med Center area just outside of downtown and it's been great for 2 years now. 

You do still need to get it inspected through the Rental Housing Inspection Program, but that's pretty easy. They're just making sure the house is livable and you can find their checklist on the city website so you know what they're looking for. To my understanding too, you can rent your property out while you wait for the inspection and results, and if you miss some items on the inspection they're pretty easy to work with to get it remediated (In my inspection I was missing a smoke detector in the basement and they let me send photos when it was installed). There are fees, but the big one is upfront and then yearly it's like $18 to renew and they let you self-certify for 5 years. Not a big deal. 

As for marketing Furnished Finders is the gold standard for MTR.