All Forum Posts by: Tabitha L. Cox

My advice is to start with where your network is. If Royal Oak is where you have contacts for help--contractors, plumbing, electrical etc--start your landlord journey there and then, once you have your systems in order, expand to other areas. 

As for STR up north, first you may want to think outside the major areas like Traverse City that are already overrun. As a realtor I run the Michigan Lakeshore from Grand Haven to Ludington (and beyond), so I can talk up some other areas to consider for STR near vacation areas. That being said, STR is a whole different game than LTR, and usually involve a lot more work or a larger expense to pay people to do the work. I would make sure you really want to run STR before jumping into that market. Feel free to message me and we can talk more :) .

@Bryan Bokowy I can help you in both those markets, send me a direct message and we can talk more about specifics😊

@Brandon Koster what area of Muskegon was it in?

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Mason.

Purchase price: $166,000
Cash invested: $23,000

House hacked this duplex. Living in one side for a year or so before renting it out. Current long term tenant is paying well below market value rent. When able to rent both sides for full market value pure cash flow should be between $200-$300, but goal is to pay off loans and hold LTR investments as part of retirement plan.

What made you interested in investing in this type of deal?

Wanted to start the LTR investment journey and house hacking made the most sense with other variable we have in play.

How did you find this deal and how did you negotiate it?

I'm a realtor and this was listed on the MLS. It appraised for $9k more than I paid for it, which made me happy. Needed minimal work.

How did you finance this deal?

Traditional conventional mortgage for an owner occupied property.

How did you add value to the deal?

Currently this is about saving me money on my house payment. But will be updating the kitchen and bathroom of the unit we are living in next year as I ready it to rent out to someone else. Units have been rented for $700 but with updates this unit can rent for $900/$950. The current tenant pays $700 but that unit can go $800/$850 in the future.

What was the outcome?

Accomplished the goal of saving me money, as well as, entering the world of LTR in a way where systems can be established and learning happen in a small controlled way before embarking on bigger investments and using OPM.

Lessons learned? Challenges?

Should have had a little more thorough inspection process done. Would not have changed what I did, but would have made planning easier.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Just myself, and my local lender Dart Bank, who I've used for all my real estate financing so far.

@David Bilbey I see this is an older post but if your wife has not connected with anyone yet, I would love to chat 😊

@Landon Bleau if you want to look a little farther south along the Lake Michigan coast I run the area from Grand Haven to Ludington. I believe Muskegon through Montague are up and coming vacation areas that have been passed over for a long time. These areas are not overly regulated yet, with the most restrictions I've run across so far being they can only STR for 120 days a year, or the rentals have to be a month at a time. Because of the weather those STR often do 6 month ‘winter rentals' and I have not heard many complain about not finding a renter for that timeframe. I have been learning the investor language, though still working on applying and practicing as I've worked with investor clients who flip, as well as do STR and LTR. I've flipped two personal homes, and just bought my first duplex.

@Bonnie Low Depends on the specific area and what you are comparing them to. This is where you can see all the 2020 Millage rates for the whole state of Michigan, https://www.michigan.gov/docum... Look under Muskegon County. Most non-homestead rates are 45-55 mils, with the cities--Muskegon city, Whitehall and Montague City being in the low 60s. So it really depends on the price of the homes you are looking at. I typically see annual homestead taxes of $2500 to $5,000 for homes in the $150,000 to $350,000 range. If you decide to make the trek north let me know, I'd love to show you around :) 

@Alex Diago

I may have a great up and coming market you would be interested in. Muskegon north through Montague MI has long been skipped over as people have traveled to the Lake Michigan shoreline for vacations. But renovations and revitalization efforts are going strong and I’m repeatedly confirmed by what I see that these great tourist areas will be doing amazing things in the next ten years. This is still a very residential area too, so they don’t close down in winter because they have industry and jobs outside of tourism. So short term, or long term rentals will work here. The market is hot, like everywhere, but there are houses that come through I think would make great rentals one way or the other. I’m a realtor in this area, but I have also house hacked two flip houses, and am about to close on my first duplex, and I work with investor clients, so I have experience in the investor world, and plan to continue growing my portfolio. If you’re interested in more information let me know and we can exchange emails.

@Ryan DiCanio I agree with the previous comments, but let me give you an example as a realtor. I have an FHA buyer that I got into a deal on a great home by going $25000 over asking, and I believed it was worth that much. The house appraised at value, however the appraisal came back with the following requirements—fix the cement on some stairs, either reside or tear down a shed in the backyard, and prove the well and septic are far enough apart. My buyer and her family went and took care of the shed and steps themselves. Despite the septic being a newly installed, and county approved system, that I did send in the county approval for, we had to gather additional documentation and send it in for a FHA waiver which has a 10 day processing time. So a deal that was supposed to close the first week of this month, likely won't close until the beginning of next month. One of the longest delayed closings I've ever had on a buyer deal I've done. Thankful the seller and buyer are some of the sweetest people ever!

@Sean McGinn I’m familiar with that area as I work as a realtor around there. Is the house listed or is this a direct conversation you are having with owner? If you’re talking to the seller directly, how long has she owned the unit? Looks like it sold in 2016. $80k is about $11k more than the last time it sold, and if she sells direct to you vs listing it she saves a lot of money on fees. She may just want to get out of the responsibility of managing a rental, something which is not for everyone.