All Forum Posts by: Jeff Roth

Hi Jon-

You are a new real estate investor and concerned that finding opportunities is harder with prices and interest rates what they are currently.

Great question! You are not the only one concerned about this.

There are still markets that offer strong cashflow in landlord friendly communities.

As an out-of-state investor, you want to make sure you have a strong team in place that acts as your fiduciary and makes sure you buy well and the property is managed to increase value and reduce tenant turnover.

There are many markets in Michigan that cashflow with high renter demand.

We have helped and continue to help many out-of-state investors build portfolios of cash flowing properties.

To Your Success!

Hi Angela-

You asked about multifamily markets with strong cashflow especially for out-of-state investors.

Great question!

We help investors, from around the country, invest in high cashflow multifamily properties in Michigan.

Specifically, we like the Lansing market for several reasons. It is the state capital. There is a lot of economic development going on driving jobs which drives housing demand. The cost of living is lower so your labor costs on repairs are lower. It is generally a landlord friendly place to do business. You can buy a duplex for around $135K that rents for $2,000 a month/gross rents plus or minus for example.

We have a strong team in place there to handle property management, repairs, and property inspection.

There are other markets in Michigan too but we like Lansing.

To Your Success

Hi Daniel from Milwaukee, Wisconsin-

You bought a duplex last year with 5% down and conventional financing. You just graduated from your PhD program and are ready to get your next investment property but your debt to income ratio is skewed because of your student loans and ask how you might overcome this.

Great question! I would look into getting a Debt Service Coverage Ratio (DSCR) loan which uses the income from the property to qualify the loan and your credit score and less on you personally.

You may also be able to use a cash out refinance DSCR loan on your current duplex to get the cash you need for the downpayment on the next one.

To Your Success!

Hi Jacob-

Great question! You asked what is one thing you wish you would have done sooner, or what's one piece of advice you'd give to a young real estate investor?

I would say learn enough to get started. Limit your study time to 6 months and then go find a mentor who has done what you would like to do. An investor friendly Realtor with a teacher's heart can get you started and help you avoid costly mistakes. They can provide referrals to the rest of the team you will need to be successful. They should provide more value than what they receive in compensation and typically the team reflects the mentor so make sure you connect well with them.

To Your Success!

Hi Alex in Dallas, Texas-

You are wondering what to do in a declining rental rate market leading to negative cashflow.

I am sorry to hear you are facing this but you are not alone and I have faced this exact problem in the past.

The thing to do is get creative as pressure fuels creativity.

Basically, you have two levers if you want to keep the property-increase income and reduce expenses.

Unfortunately, most expenses are fixed and increasing for landlords.

I recommend focusing on the income side.

Here are some ideas to get through this situation.

1. Rent by the room, if you are able to locally, to increase cashflow.

2. Rent the garage separately or storage space like a shed or similar to existing tenants or others-make sure your insurance covers this.

3. Rent the basement for storage as well.

4. Turn the property into a mid-term or short-term rental if you are allowed locally.

5. Consider doing a lease option. Non-refundable option payment. Higher than market rents. You can offer a monthly rent credit toward purchase. A purchase price at the end equal to or higher than market for the risk. Use a local attorney to paper this up correctly.

To Your Success!

Hi Jon from Columbus, Georgia-

You have decided to hold onto a flip and turn it into a short-term rental.

You feel you can't effectively self-manage as you are out-of-state and wonder if you should use a co-host through AirBnB or a local property management company.

We encourage our short-term rental investors to use a property manager to keep it as passive as possible. A good one should be able to give you an idea on what the average nightly rate is, average monthly occupancy, average annual revenue, and if the area is already saturated with short-term rentals.

The property manager we recommend has a menu of services you can select so they can do everything or as little as you want. This is especially helpful for our investors who want to get their hours in to claim their property as an active investment and write off their W-2 and active income with depreciation.

To Your Success!

Hi Janet from Raleigh, North Carolina-

You are 54 and love your work at a non-profit and are ready to start investing in real estate.

Your husband is risk-averse and looking to retire in 5 years.

He's good with investing as long as your assets are protected from lawsuits and the investing is done thoughtfully and he is not involved in the property management.

Recommend you look in an area that cashflows well at a reasonable price ($135,000 plus/minus) ideally starting with a duplex so you always have a rent check coming in and some work that could be done when the units become vacant to add value and increase rents. Then, plan to refinance in a year or two and use the equity to go buy the next one.

You certainly want to have an excellent property manager to make your investment as passive as possible, investor insurance coverage from a knowledgable agent, and asset protection in place with an LLC and asset protection attorney.

This is all doable in many markets in Michigan.

To Your Success!

Hi Calvin from Hammond, Indiana-

You are 17 and will be 18 in 40 days. Love it! You asked what is the best way to get started and build wealth with real estate investing.

You asked about house hacking where you buy a primary residence up to a 4-unit and rent out parts of the house or other units and using creative financing and/or the BRRR strategy or Buy, Rehab, Rent, Refinance, and Repeat to scale your portfolio efficiently.

Great question!

House hacking a property you can live in while renting out other rooms and even the garage for storage is a great way to get started with minimum down. If you find a motivated seller, you may be able to negotiate some seller financing or lease with the option to buy. Additionally, you can work with a landlord to rent a house with the ability to sublease the house and then lease the house out as a short-term rental (make sure you understand the STR rules for the area) or just rent out the rooms to other people for positive cashflow (make sure you know the rental rules for the area).

To Your Success!

Hi Shyla from Los Angeles, California.

Congratulations on being ready to start investing in real estate. Like many others, the numbers just don't make sense locally for you so you are looking out-of-state.

However, you realize the need to have an excellent team in place to own an income property out-of-state and ask where and how to begin and avoiding costly mistakes.

This is a wise question.

There are people who can help you implement out-of-state ownership at a high level without having to put all the pieces together yourself.

One of these people is an investor friendly Realtor or Broker in the area you are interested in investing. You can find them in investor forums like this, Facebook groups for real estate investors in the area you are interested in, or local real estate investor organizations.

One area to consider is Michigan with its still relatively affordable real estate, demand for housing, and reasonable climate. We have helped many investors from California and nationally invest successfully in Michigan.

To Your Success!

Hi Michael from New York-

You are interested in investing in short-term rentals and are looking for advice on how to get started.

We help investors, especially high-income investors, buy short-term rentals in Michigan which are popular along the coasts and in many inland communities. Real estate is still relatively affordable and the climate is favorable.

Short-term rentals are popular because it is one of the highest and best uses for an income property and you can reduce your W-2 and active income if you spend enough hours a year helping manage the property.

We partner with a state-wide short-term rental property management company that helps us and our investors know what the trajectory of regulations are in each community and they use their tools and experience to tell us average daily rates, average monthly and annual revenue, and if the market is saturated with short-term rental properties.

To Your Success!