All Forum Posts by: Tim VandenToorn

Who hates investing in Michigan?  Check the news Michigan is all the rage!

Tyler, 

This is a great question.  In general I use 10% vacancy on all my calculations (which also assumes credit loss).  I think this is very conservative and not always a reality as I am assuming my unit will be vacant 36 days out of every year.  

I also change my formula depending on the neighborhood, but rarely do I ever go greater than 10%.  In student neighborhood if my lease dates are ending in the summer I may lower it to 5%-7%.  If my lease dates are winter to winter, I work hard at getting them changed to a summer cycle even if I have to have a longer vacancy my first year or perhaps even offering the tenants a free months rent.  I would rather have them pay the electric and gas bill during the winter than me.  

I combine credit loss and vacancy into one formula.  In a good neighborhood with solid tenants or young professionals you wont (or will rarely have) credit loss. 

Most tenants are good paying tenants,  and you only hear the horror stories.  With proper tenant screening and quick reaction on evictions you can limit these losses!

Good luck!

Tim

Jake, 

I would love to discuss this more with you.  I even have a great property management company I can refer you to ;).

As far as neighborhoods this really depends on your goals.  

The 49509 neighborhood (SE) would be considered lower income but provides great cash flow.  

The Heritage Hill area provides top dollar rent and is close to the Hospitals which allows investors to attract professionals. 

The SW and NW side of town close to Grand Valley State University is targeted by investors right now due to students looking for top quality properties to live in.  Rents generally range from 350.00 to 450.00 per room (although we rent the whole house this gives you a good starting point for the rent price) if you do a good job on the remodel, and of course consider functionality and amenities. 

Further SW has a strong Hispanic presents which creates a lot of opportunity for Land Contract if you are interested.  Wyoming is a great market for this as well. 

The NE side of Grand Rapids is usually a good areas for stable single families and generally has more owner occupants.  

I would love to sit down with you or even give a second opinion on anything your realtor may suggest with no obligation.  Let me know. 

Good Luck!!

Levi, welcome to Bigger Pockets and great job already looking into this as a sophomore in college.  If only I would have done that!!  =) Have you considered "house hacking" in my opinion this is a great way to get started.  I would seriously consider that if I could do it over.  

It is a tough market right now to get started it, but it doesn't mean you should wait. 

I would love to sit down with you to discuss my path to ownership, to market, great areas to invest etc.  

Welcome to BP Donvier, what is tempting you out West?   

Ann, you can definitely buy and hold cash flowing properties here in Grand Rapids.  Things are moving quickly though!!

Bethany, welcome to BP and the world of real estate investing.   GR is a great market to be a part of.  Have you determined what your goals are as far as a rate of return (cap rate)?  What areas in GR are you looking to invest?  Are you drawn to a particular part of town?

We look forward to hearing back!  If you want to grab coffee let me know.

Matt, maybe I missed something but when it comes to house hacking what are your goals.  Price location etc.  I come across several duplex's a month both on and off market.  If I know of something that fits within your goals I will gladly pass that along to you.

Welcome Cliff.  Definitely possible and we look forward to hearing about your success in future post.  If I can hlep in anyway please let me know. 

Kyle The meeting is March 14 at 6pm at the Buffalo Wild Wings on 44th St.  I look forward to seeing you there.