All Forum Posts by: Randy Charboneau

Hey Loren!  I'm a Real Estate Broker that works the West MI metro areas (Muskegon, Holland, Grand Rapids, Kalamazoo, Battle Creek, etc) and have helped numerous investors with foreclosures, flips, investments, etc.   

What type of help are you specifically looking for?  Hard Money Lenders?  Hands on workers?  Contractors?  Real Estate Agents?  Would love to help any way I can.

Hey Matt!  I'm a Real Estate Broker based in Grand Rapids and cover the West Michigan market.  Let me share some info and data with you about this area.

Grand Rapids has experienced a bit of a boom the last few years due to lack of properties for sale and consistent (or even increasing) demand.  Because of this, our median price point has risen from $200,000 in Spring of 2019 to a value of $315,000 today in just 5 years!  That kind of appreciation is wonderful for long term hold investors but it's having a negative effect on investors entering the market.  Rents have not quite kept pace with the median price increase and as a result, cash flow has suffered.  We have had quite a few rental units enter the market in Grand Rapids recently as well.  It's pretty common to find 2x more rental units available than homes for sale.   Compare that to a nearby major metro like Muskegon that has 5x more homes for sale than rental units available!  

Grand Rapids is an excellent investment opportunity for the long game where appreciation and equity build up are the priorities.  If cash flow is your goal, I'd suggest looking at some of the nearby communities like Muskegon, Battle Creek and Kalamazoo.  The price point entries in those communities are much lower and the cash flows are excellent with much less rental pressure on units and a better homes for sale ratio. 

I cover all these areas so if you'd like to discuss particulars just message me and I'll be happy to help

Hey Olivia!  Welcome to BP and the Grand Rapids Market!   I've helped quite a few people house hack in this area so if you have any specific questions about areas, rents, appreciation, and such just reach out anytime and I'll be glad to help!

Hey Kaleb!

I think as a beginning investor, you want to hook up with a good Real Estate Agent first and foremost.   One that has experience in the investor field and can help shape your investment plan.  I like to work with investors because they tend to be repeat buyers and sellers and that makes them a good resource for me, so I spend a lot of time on the mentor side of things with each one to make sure we share common goals of building up their portfolio and wealth.  I think most solid investment Realtors will share that goal and vision.   Once you form a plan and target the right market and property types you will be acquiring, you can start investigating the property management side of things as that will be determined by the former.  A good title agency can usually be found via your agent and that will be secondary to your acquisitions.  Contractors for rehab and maintenance can be difficult to find, but a good Realtor and Property Mgt team can usually give you some decent leads for that initially.   I'm local in Grand Rapids as well so feel free to shoot me any questions you might have and I'll help you any way I can.

Kent and Ottawa Co. are experiencing fabulous appreciation rates since COVID.  Back in 2020, the median price range for this area was around $200,000.   It's now at $370,000.  Almost DOUBLE in just 4 years!  Grand Rapids City has gone from $200,000 to $317,000 in that time frame.  Not quite as good but certainly very positive!  We currently have a major shortage of inventory in this area, so it's not really a matter of "where the best place to buy", but more a matter of "can you find a house you like and actually purchase it?".   Hopefully things will improve by the time you're ready to come this way.   When you get closer to the date you're ready to start shopping this area, I'll be happy to update the appreciation reports for any zip code you're interested in.

The Grand Rapids wholesale market is a wild wild west when it comes to property condition and deals.  I'm seeing conditions vary from turnkey/rented to almost tear down.  The spread/margins can be great to nothing.   It really depends.   It seems like everyone wants to get into the wholesale market since it's the new "get rich quick with no money" racket and the better deals seem to be landing in the more experienced outfits hands.

Most of my clients have been looking in the Kalamazoo/Battle Creek and Muskegon markets due to the lower price points and better rents/vs/sale price ratios.    I think for Grand Rapids you want to target a property that simply isn't suited for an owner occupant who will need a loan in its condition.  That gets all of those kinds of buyers out of the way and you're simply dealing with other investor competition on it.  This may mean picking up something that needs work or something that has a unique issue that turns homeowners away that you might need to fix at some point, but it's possible to still make money in GR.

yes they allow rent adjustments from year-to-year based on the avg rental pricing for the area, but keep in mind there will be a maximum.  You're dealing with the government and they put protections  in place for themselves and their tenants so you can't arbitrarily raise that rent to whatever you want.   The nice part of the rent raising is the government usually picks up most of the increase and keeps the tenant portion the same (or the tenant will at least contribute less to the rent increase than the govt) so it hurts them less or not at all.  Just more money in your pocket year to year.

Geez so many Debbie Downers in this thread.   

Holly, I have some pretty incredible news for you.   Yes, you can absolutely still buy a $50,000 home and make money on it still.   Muskegon MI is the place for you.    We have homes over here in rental condition and occupied for as low as the $30,000 range!   I just sold an investor a 2 bed 1 bath home in Muskegon Heights with updated kitchen and newer roof and vinyl siding that is occupied and paying rent at $700+month for $49,500!    This is absolutely possible.   If you wanted to do a quick flip and buy it for $25,000 and put $10,000 into it and resell for $50,000 we can certainly do that.   For a cheap/low money/starting investor, I can't think of a better place in the USA right now to invest than West Michigan.

I'll jump in on this one

I've only rented to section 8 tenants. (Section 8 is sort of a broad term and can encompass any tenant receiving housing assistance from a govt authority. In my local area, we have the (Michigan State Housing Development Authority, Grand Rapids Housing Commission, Kent County Housing Commission (and other counties), The Dept of Housing and Urban Development (HUD), etc.)

What I like:  Tenant is getting assistance from the govt so they only have to pay a portion of their rent.  The rest is auto deposited every month from the govt 100% of the time without fail.  If the tenants gets behind, it's only for a portion of the rent so it hurts less.   Also, if they get behind and you kick them out because of it, they lose their section 8 assistance and the waiting list is years long so they do NOT want that and find money when they need to (through friends, charities, etc.).

What I don't like:  Yearly inspections.   The housing authorities want these properties in a certain condition and if your tenant is hard on the property it's going to make your life a pain in repairs and compliance.   So far, I've been pretty fortunate and have been able to handle all of this.  It hasn't been easy or simple but nothing impossible.  Just very annoying each year.

The bottom line on these homes is cash flow and equity build up and section 8 keeps that money flowing with incentives to make sure it stays that way so I'll deal with the rest to get my cash.