All Forum Posts by: Nathan V.

**Maybe this is a bad post. No replies in the starting out section. Trying the Michigan Q&A section.

Alrightyyyyyy!!! Just a head up that this is going to be a long post. Where to start......

I found Bigger Pockets about 6-years ago and, it supercharged my desire to get into real estate. I had chances in the past and always dreamed about doing it but never took action. After listening to every podcast there was, reading, and fighting analysis paralysis, I finally took action! We drove around our area and wrote down the address of every duplex we could find. We then used the county website to find the owner and the owner's address. We whipped up some letters and sent them out. A gentleman contacted us stating he was getting ready to list his last duplex. I couldn't believe it! It worked!! What do I do now, I thought. It turned out that his son-in-law is one of the top agents in the area and was about to list it. He worked with us the entire way and, we closed that deal due in large part to him! (He will be our agent for life and we recommend him to everyone we get the chance to.)

Fast forward a bit. We got into the place just as we found out we were going to have our first child. We inherited a stellar renter who had lived there for 20-years and paid rent early every month. The rent was well below market rates, but thanks to the advice we received on here, we kept it low and slowly increased it the first year. Things were going well. Our life was changing, but it was changing for the better. Once our child was born, we decided to have her leave work to be a stay at home mother. This is where we started to get comfortable.

The numbers worked fine losing the wife's income. We had to adjust our lifestyle a bit but who doesn't after having kids? Having the renter pay a decent amount of the mortgage helped out so we decided to pay down some stupid debt. We figured this would help our DTI for the next property. We had everything right and time kept flying by.

The duplex is 900 sq/ft per unit, and we started to notice it was a little tight for all of our belongings and an ever-curious two-year-old. While vacationing during the 4th of July weekend, we began to feel like we were suffocating by staying there. We were not using it for what we intended it for, which was renting both units and banking the cash flow for our next purchase. We also realized that rents had increased tremendously over the past 2-years and our tenant was once again paying at least $350 below market rent. We got scared, felt like we screwed up, and decided to contact the realtor to sell it.

We contacted the agent once we returned from Holiday and worked the numbers to sell it. He asked why we wanted to sell it. I began to blurt out it is too small for our needs, the tenant's rent is low, mowing the grass, and any other reason I could think of to justify selling it. The good news was it had appreciated nicely since our purchase and he felt we would sell it for about $55k above what we bought it for. During our conversation, I noticed his body language. After a day or two of talk, it dawned on me. He was thinking, "why the heck are you going to sell this"? The wife and I discussed it more, and we realized all the reasons we were looking to sell it are the same reasons we looked for a landlord to have to purchase from!!! We were about to be the people we looked for to buy from! We called the realtor back, told him what we had discovered, and he encouraged us to keep it.

On to today. We are fully moved into a beautiful townhouse we plan on renting for the next year. I am about 50% complete in the process of getting our unit move-in ready. We also decided that with the large amount of cash flow this thing can generate, that we are going to hire a property manager for a year. Everything is going amazing again and I am thankful for every lesson learned along the way.

My intent of sharing this to get off my chest that without realizing it, I almost blew a great opportunity. The other reason is to reach out to anyone that reads this in the West Michigan area that would like to meet up virtually or at a park (socially distance). I am ready to tackle the next project. Before I do that though, I would like to work with someone that has done it. For now, I would like to try a wholesale, flip, or both! Using the rules from the Richest Man in Babylon though, I would like to do it with someone who has done it before.

What can I bring to the table? Excellent credit, cash for marketing, and a private money provider (given the deal is correct). I have the first one under my belt and even though I took a 2-year pause, I'm ready to rocket forward and build something amazing. Let's do this!

The answer is always no if you never ask.

-Nathan

Alrightyyyyyy!!! Just a head up that this is going to be a long post. Where to start......

I found Bigger Pockets about 6-years ago and, it supercharged my desire to get into real estate. I had chances in the past and always dreamed about doing it but never took action. After listening to every podcast there was, reading, and fighting analysis paralysis, I finally took action! We drove around our area and wrote down the address of every duplex we could find. We then used the county website to find the owner and the owner's address. We whipped up some letters and sent them out. A gentleman contacted us stating he was getting ready to list his last duplex. I couldn't believe it! It worked!! What do I do now, I thought. It turned out that his son-in-law is one of the top agents in the area and was about to list it. He worked with us the entire way and, we closed that deal due in large part to him! (He will be our agent for life and we recommend him to everyone we get the chance to.)

Fast forward a bit. We got into the place just as we found out we were going to have our first child. We inherited a stellar renter who had lived there for 20-years and paid rent early every month. The rent was well below market rates, but thanks to the advice we received on here, we kept it low and slowly increased it the first year. Things were going well. Our life was changing, but it was changing for the better. Once our child was born, we decided to have her leave work to be a stay at home mother. This is where we started to get comfortable.

The numbers worked fine losing the wife's income. We had to adjust our lifestyle a bit but who doesn't after having kids? Having the renter pay a decent amount of the mortgage helped out so we decided to pay down some stupid debt. We figured this would help our DTI for the next property. We had everything right and time kept flying by.

The duplex is 900 sq/ft per unit, and we started to notice it was a little tight for all of our belongings and an ever-curious two-year-old. While vacationing during the 4th of July weekend, we began to feel like we were suffocating by staying there. We were not using it for what we intended it for, which was renting both units and banking the cash flow for our next purchase. We also realized that rents had increased tremendously over the past 2-years and our tenant was once again paying at least $350 below market rent. We got scared, felt like we screwed up, and decided to contact the realtor to sell it.

We contacted the agent once we returned from Holiday and worked the numbers to sell it. He asked why we wanted to sell it. I began to blurt out it is too small for our needs, the tenant's rent is low, mowing the grass, and any other reason I could think of to justify selling it. The good news was it had appreciated nicely since our purchase and he felt we would sell it for about $55k above what we bought it for. During our conversation, I noticed his body language. After a day or two of talk, it dawned on me. He was thinking, "why the heck are you going to sell this"? The wife and I discussed it more, and we realized all the reasons we were looking to sell it are the same reasons we looked for a landlord to have to purchase from!!! We were about to be the people we looked for to buy from! We called the realtor back, told him what we had discovered, and he encouraged us to keep it.

On to today. We are fully moved into a beautiful townhouse we plan on renting for the next year. I am about 50% complete in the process of getting our unit move-in ready. We also decided that with the large amount of cash flow this thing can generate, that we are going to hire a property manager for a year. Everything is going amazing again and I am thankful for every lesson learned along the way.

My intent of sharing this to get off my chest that without realizing it, I almost blew a great opportunity. The other reason is to reach out to anyone that reads this in the West Michigan area that would like to meet up virtually or at a park (socially distance). I am ready to tackle the next project. Before I do that though, I would like to work with someone that has done it. For now, I would like to try a wholesale, flip, or both! Using the rules from the Richest Man in Babylon though, I would like to do it with someone who has done it before. 

What can I bring to the table? Excellent credit, cash for marketing, and a private money provider (given the deal is correct). I have the first one under my belt and even though I took a 2-year pause, I'm ready to rocket forward and build something amazing. Let's do this!

The answer is always no if you never ask.

-Nathan

Thanks for the kind words and advice! 

Hello all! It feels great to finally make a post after observing this forum for the past year! Everything I have learned up to this point has been from everyone that writes in this forum and of course, from the BiggerPockets podcast. Friday afternoon my wife and I closed on our first property which is a two family unit here in West Michigan. We plan on living on one side while we redo some items in the unit. Also, while satisfying the 12 months required by FHA.

We found the unit by driving for dollars one Sunday afternoon looking at all the multifamily properties in our town. After getting the addresses of all the owners, we sent our massive mailing out that consisted of 25 letters. It was an absurdly low number but I liked these units and there are not that many in the area we wanted to be in. I never expected a call but two days after I put them in the mailbox we got a text from the owner stating he wished to sell his current property. I was in shock to say the least but after texting back and forth I finally spoke with him on the phone. We agreed to meet and take a look at the property as he was just about to list it on the MLS. We took a tour, talked for a bit, and asked what the price was. After learning what he was asking, he gave us three days to make an offer before he listed. All the numbers worked using the bigger pockets rental calculator and we let him know we were in. Fast forward 45 days and we are owners of our first Multifamily!!! We met an amazing realtor along the way that the owner was going to list with and plan on working with him for our next property. There is more to the 45 day story than I have here but the unit is solid and needs minimal work. However, I can say we did it. We got an off market property at a good price in a very competitive market from everything we learned here.

On to my question with a ton of buildup.  We inherited a tenant that has lived in their unit for 20 years. Her side is in immaculate condition but she is on a month to month lease paying $350/month below market rate for the same amount of bedrooms and square footage for our area.  The former owner explained he never had the heart to raise rent on her.  She was a great tenant, was never late, and had zero issues.  I spoke with her today and introduced myself and stated that I would need her to sign a lease in the near future.  I also said I was willing to keep her at current rent for December and January.  The former owner suggested I work her rent up every 30 days until she is at the number I decided on which is about $100-$150 below market rate but I am willing to take the small loss with how good of a tenant she is.  She clearly did not want an increase in rent but understood it is what it is.  I discussed the increase spread out over a few months with her and asked if she would be ok with it.  Signals seemed mixed, so here is my question.  Does it sound like a bad idea to approach her with a lease in a few days that starts 03/01/17 at the rate that I came up with and let her know that January and February will be at her current rate?  Michigan law states that an increase with no lease has to be signed and provided 30 days before the increase is expected to be paid.  This way I am giving her roughly a 75 day notice and if she decides not to sign it she can start looking for a new place.  I feel like many will look at this as a headache but I do not want to lose such a stellar tenant especially while we are living on the other side for 12 months.  Any advice helps and we look forward to getting to know everyone in our area that is a BiggerPockets member and everyone else on the forum!