All Forum Posts by: Tyler Lyons

Hi @Sean N.,

Do you have any equity in your primary residence? I acquired my first rental property about 2 months ago and I drew on a home equity line of credit (HELOC) to make it happen. Also, if your 9-5 provides you with a 401K, you could also consider a 401K loan as well. I'm considering this for my next rental property. That said, you'll need to make sure that you read up on the features of your 401K plan to understand how a potential loan might work. Hope this helps!

@Jonathan Thrasher - I'm using Custom Upgrades for a duplex that I'm in the process of renovating. Roger works almost exclusively with investors, so he understands our needs and will do what he can to get the rehab cost within (or close to) your budget. His estimate came in quite a bit lower than the other GCs that I had bid on the project, but he does quality work as well. 

Similar to the guys that @Tim VandenToorn mentioned and like any good contractor out there right now, he's super busy, so I'm not sure how much he'd want to bounce around to different properties that you don't have under contract, but you could definitely drop him a line to find out. 

@Shawn Breyer I just started investing in buy and holds this year and before I got my first property under contract a couple of weeks ago, I spent some time interviewing a few different property management companies around Grand Rapids. There are some good resources in the Bigger Pockets FilePlace where you can get some cheat sheets with pre-written questions that you can use to interview different management companies. I used these as an aid as I interviewed different firms.

In addition to the interviews I conducted, I also chatted with some other investors around Grand Rapids to get a feel for the reputation of the different companies. After this analysis, I ended up choosing United Properties of West Michigan. These guys have been massively helpful to me in this new venture and have been very good mentors/advisors as I work through this first deal. Even though I'm still pretty new, so far, my experience with them has been great.

Hi @Jacqueline Coombs- I've analyzed 50+ deals in Grand Rapids the past 2-3 months (closing on my first one in the next few weeks) and I can vouch for what @Tim VandenToorn and @Jake Thomas are saying with respect to CAP rate. Pretty much everything I've been seeing has been in the 7-9% CAP range. In order to get those deals though, you definitely have to be prepared and move very quickly! Cash buyers are ready (doesn't sound like cash is an issue for you) and are scooping up properties as soon as they hit the market.

Thanks for sharing, @Tim VandenToorn! This information is super helpful. I'll plan to dial this assumption down to around 10% and consider adjusting it up or down a little bit based on the quality/desirability of the neighborhood and rental unit. 

BP Community,

As I'm going through and modeling out my first few deals, I'm looking for some wisdom from the experienced folks out there as to what kind of assumptions that you use for vacancy and credit losses. I know that in my farm area of Grand Rapids, MI that vacancies have been quite low. However, it would seem that depending on the area/neighborhood within the market, you'd want to adjust/flex these assumptions. What assumptions are others out there using in their deal models for vacancy and credit losses?

I was thinking that for nicer, more desirable neighborhoods, it might make sense to use 5% for vacancy and 5% for credit losses (10% total loss for vacancy and credit losses) and for tougher neighborhoods, to use 8% for each (15-16% total loss for vacancy and credit losses). 

I understand that this stuff is highly localized, but any thoughts as to how you think about these assumptions and your strategies would be greatly appreciated. If anyone has any first-hand experience as to what you're seeing around Grand Rapids, that would be great as well.

Thanks Everyone!

Tyler

Thanks Clay! This info is super helpful. I'll shoot an email over your way.

BP Community,

Has anyone had any success in getting zoning changes in Grand Rapids, MI? There are a couple of different properties that I've seen recently that would require zoning changes. Any tips, tricks, strategies, or helpful color commentary would be greatly appreciated.

Thanks!

Tyler

Hi Paul - would you mind shooting those contacts my way as well?

Thanks for chiming in everyone! Very helpful.