Ultimate Flint Real Estate Investing Guide for 2024

A long-term rental plan that includes Buying a home, Renovating, Renting, Refinancing it, and Repeating the process by employing the capital from the mortgage refinance is called BRRRR. BRRRR is a method for repeated growth. This strategy hinges on your ability to extract money out when you refinance.

The After Repair Value (ARV) of the property needs to total more than the combined buying and refurbishment costs. Then you get a cash-out mortgage refinance loan that is calculated on the superior value, and you withdraw the difference. You acquire your next house with the cash-out money and do it all over again. You add growing investment assets to your balance sheet and lease income to your cash flow.

When an investor owns a significant portfolio of real properties, it makes sense to hire a property manager and establish a passive income source. Discover top real estate managers in Flint MI by browsing our directory.

Factors to Consider

Population Growth

The increase or shrinking of the population can signal if that region is desirable to landlords. If the population increase in a city is high, then additional renters are likely coming into the community. Moving companies are drawn to rising regions providing reliable jobs to families who move there. An expanding population constructs a reliable foundation of tenants who can handle rent bumps, and an active property seller’s market if you decide to unload your investment assets.

Property Taxes

Property taxes, ongoing maintenance expenses, and insurance specifically affect your returns. Unreasonable property taxes will negatively impact a property investor’s profits. If property tax rates are excessive in a specific market, you probably need to search in a different location.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that tells you the amount you can plan to collect as rent. The rate you can charge in a community will impact the price you are willing to pay based on how long it will take to repay those costs. You need to find a low p/r to be assured that you can price your rents high enough for good returns.

Median Gross Rents

Median gross rents are an accurate benchmark of the desirability of a lease market under examination. Median rents must be expanding to validate your investment. You will not be able to achieve your investment goals in a city where median gross rental rates are declining.

Median Population Age

The median residents’ age that you are searching for in a favorable investment environment will be near the age of waged adults. This may also signal that people are migrating into the city. A high median age signals that the existing population is leaving the workplace with no replacement by younger workers moving there. This isn’t advantageous for the forthcoming financial market of that community.

Employment Base Diversity

Having diverse employers in the locality makes the market not as risky. When workers are concentrated in a couple of dominant enterprises, even a little disruption in their business could cost you a lot of renters and increase your risk enormously.

Unemployment Rate

High unemployment means a lower number of tenants and an unsafe housing market. Non-working individuals won’t be able to buy goods or services. The still employed people may find their own paychecks marked down. This could result in late rents and lease defaults.

Income Rates

Median household and per capita income will tell you if the renters that you need are living in the community. Historical income data will show you if income growth will allow you to hike rents to meet your income expectations.

Number of New Jobs Created

The vibrant economy that you are on the lookout for will create a large amount of jobs on a regular basis. An economy that creates jobs also adds more people who participate in the housing market. This assures you that you will be able to sustain an acceptable occupancy rate and buy more assets.

School Ratings

The ranking of school districts has a powerful effect on housing prices across the area. Well-endorsed schools are a requirement of companies that are looking to relocate. Business relocation attracts more tenants. New arrivals who buy a home keep home values strong. You can’t discover a vibrantly expanding residential real estate market without highly-rated schools.

Property Appreciation Rates

The basis of a long-term investment plan is to hold the property. You need to be certain that your assets will rise in market price until you need to dispose of them. You do not need to allot any time reviewing locations that have below-standard property appreciation rates.

A furnished residential unit where clients reside for shorter than 30 days is considered a short-term rental. Long-term rentals, like apartments, charge lower rental rates a night than short-term rentals. These houses may require more frequent upkeep and cleaning.

Short-term rentals are used by business travelers who are in the region for a couple of nights, those who are moving and need temporary housing, and holidaymakers. Regular real estate owners can rent their homes on a short-term basis through portals such as AirBnB and VRBO. This makes short-term rental strategy a convenient way to pursue residential real estate investing.

Short-term rentals require interacting with renters more frequently than long-term rentals. That means that property owners handle disagreements more regularly. Think about covering yourself and your portfolio by joining one of real estate law offices in Flint MI to your network of experts.

Factors to Consider

Short-Term Rental Income

Initially, compute the amount of rental income you should have to reach your desired profits. A community’s short-term rental income levels will promptly show you when you can anticipate to reach your projected rental income figures.

Median Property Prices

You also need to decide the amount you can bear to invest. To find out if an area has potential for investment, look at the median property prices. You can customize your market search by studying the median values in particular sub-markets.

Price Per Square Foot

Price per square foot gives a basic picture of property prices when looking at comparable real estate. When the styles of potential homes are very contrasting, the price per square foot may not provide a valid comparison. If you take this into account, the price per square foot can give you a broad estimation of real estate prices.

Short-Term Rental Occupancy Rate

A closer look at the city’s short-term rental occupancy levels will tell you if there is an opportunity in the site for more short-term rental properties. A city that needs additional rentals will have a high occupancy level. Weak occupancy rates signify that there are more than too many short-term rental properties in that location.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the venture is a practical use of your money. You can determine the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by your cash investment. The answer is a percentage. When a venture is lucrative enough to return the amount invested fast, you will get a high percentage. Financed investment ventures can yield higher cash-on-cash returns as you are using less of your own cash.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares rental property worth to its yearly return. Basically, the less a property costs (or is worth), the higher the cap rate will be. If cap rates are low, you can expect to spend more cash for real estate in that region. The cap rate is calculated by dividing the Net Operating Income (NOI) by the listing price or market value. The result is the per-annum return in a percentage.

Local Attractions

Important public events and entertainment attractions will attract tourists who need short-term rental houses. When a city has places that periodically hold must-see events, such as sports coliseums, universities or colleges, entertainment halls, and adventure parks, it can invite visitors from outside the area on a regular basis. At certain times of the year, regions with outside activities in mountainous areas, oceanside locations, or along rivers and lakes will draw lots of people who want short-term rental units.

To fix and flip a property, you need to pay below market worth, make any required repairs and updates, then sell the asset for full market worth. The keys to a profitable fix and flip are to pay a lower price for the house than its existing market value and to accurately calculate the budget you need to make it saleable.

Assess the prices so that you know the accurate After Repair Value (ARV). The average number of Days On Market (DOM) for houses listed in the region is crucial. Liquidating the home fast will keep your costs low and guarantee your returns.

To help distressed property sellers find you, enter your company in our lists of cash real estate buyers in Flint MI and real estate investment companies in Flint MI.

Additionally, coordinate with Flint bird dogs for real estate investors. Specialists in our directory focus on acquiring distressed property investment opportunities while they’re still under the radar.

Factors to Consider

Median Home Price

Median real estate price data is a valuable gauge for estimating a prospective investment area. You’re looking for median prices that are modest enough to show investment opportunities in the city. This is an essential element of a profit-making investment.

When you notice a sharp weakening in real estate market values, this might signal that there are potentially properties in the location that qualify for a short sale. Investors who team with short sale negotiators in Flint MI get continual notifications regarding possible investment real estate. Learn more concerning this sort of investment explained in our guide How Difficult Is It to Buy a Short Sale Home?.

Property Appreciation Rate

The movements in real estate values in an area are critical. Steady growth in median prices shows a robust investment environment. Unpredictable market worth shifts are not desirable, even if it’s a significant and quick surge. You may wind up purchasing high and selling low in an unstable market.

Average Renovation Costs

A comprehensive review of the community’s renovation costs will make a huge difference in your market choice. The time it takes for acquiring permits and the municipality’s requirements for a permit request will also impact your decision. To create an on-target budget, you’ll need to know if your plans will have to involve an architect or engineer.

Population Growth

Population growth is a good indication of the strength or weakness of the region’s housing market. When the population isn’t going up, there isn’t going to be a good source of purchasers for your houses.

Median Population Age

The median residents’ age is a clear indication of the availability of preferred home purchasers. If the median age is equal to that of the regular worker, it’s a good indication. Workforce can be the individuals who are possible homebuyers. Individuals who are about to leave the workforce or have already retired have very particular housing needs.

Unemployment Rate

You need to have a low unemployment level in your prospective location. The unemployment rate in a prospective investment market should be less than the nation’s average. When the city’s unemployment rate is less than the state average, that is a sign of a good financial market. Non-working people can’t purchase your real estate.

Income Rates

Median household and per capita income are a reliable sign of the robustness of the housing market in the area. Most people need to get a loan to purchase real estate. Their salary will show how much they can borrow and if they can buy a home. The median income levels show you if the community is appropriate for your investment plan. Scout for places where wages are going up. To stay even with inflation and increasing construction and supply expenses, you need to be able to regularly adjust your rates.

Number of New Jobs Created

Knowing how many jobs are generated per annum in the region can add to your confidence in a region’s real estate market. A growing job market means that a higher number of people are confident in investing in a home there. Additional jobs also draw wage earners moving to the city from other places, which further revitalizes the property market.

Hard Money Loan Rates

Investors who work with upgraded homes regularly use hard money funding instead of conventional mortgage. This lets them to immediately purchase undervalued real estate. Research Flint hard money lenders and look at lenders’ charges.

Those who aren’t knowledgeable concerning hard money financing can discover what they need to know with our detailed explanation for newbies — What Is Hard Money Lending?.

Wholesaling is a real estate investment approach that entails finding homes that are interesting to real estate investors and signing a sale and purchase agreement. When an investor who approves of the property is spotted, the contract is sold to them for a fee. The investor then settles the purchase. You are selling the rights to the contract, not the house itself.

Wholesaling hinges on the involvement of a title insurance company that is okay with assigning contracts and knows how to deal with a double closing. Hunt for title companies for wholesaling in Flint MI that we collected for you.

To understand how real estate wholesaling works, study our comprehensive guide How Does Real Estate Wholesaling Work?. When you opt for wholesaling, add your investment venture in our directory of the best wholesale real estate investors in Flint MI. That will allow any possible customers to locate you and reach out.

Factors to Consider

Median Home Prices

Median home prices in the area being considered will immediately show you whether your real estate investors’ required investment opportunities are situated there. Reduced median prices are a good indicator that there are enough residential properties that could be acquired under market value, which real estate investors need to have.

Rapid worsening in real estate market values could lead to a number of houses with no equity that appeal to short sale property buyers. Wholesaling short sales often delivers a list of particular advantages. But, be aware of the legal liability. Get more data on how to wholesale short sale real estate in our exhaustive explanation. If you choose to give it a try, make certain you have one of short sale attorneys in Flint MI and property foreclosure attorneys in Flint MI to consult with.

Property Appreciation Rate

Median home market value fluctuations clearly illustrate the housing value picture. Real estate investors who need to liquidate their investment properties later, like long-term rental landlords, want a region where real estate prices are increasing. Decreasing market values show an equally poor leasing and home-selling market and will chase away real estate investors.

Population Growth

Population growth information is an indicator that real estate investors will analyze in greater detail. When they find that the population is expanding, they will presume that new residential units are required. Real estate investors are aware that this will include both leasing and purchased housing. When a community is not growing, it doesn’t require new housing and real estate investors will invest somewhere else.

Median Population Age

A vibrant housing market needs residents who are initially leasing, then transitioning into homebuyers, and then moving up in the housing market. This needs a strong, reliable labor force of people who are confident enough to step up in the real estate market. When the median population age equals the age of employed people, it illustrates a reliable housing market.

Income Rates

The median household and per capita income should be rising in a strong real estate market that investors want to work in. Surges in lease and sale prices have to be backed up by improving salaries in the market. Real estate investors have to have this in order to meet their estimated returns.

Unemployment Rate

The community’s unemployment stats are a vital point to consider for any future sales agreement buyer. High unemployment rate causes many tenants to make late rent payments or miss payments altogether. Long-term investors will not take real estate in a city like this. Real estate investors cannot depend on renters moving up into their homes when unemployment rates are high. This makes it tough to locate fix and flip investors to close your buying contracts.

Number of New Jobs Created

Knowing how often fresh employment opportunities are created in the city can help you determine if the real estate is located in a stable housing market. New residents settle in a region that has additional job openings and they look for housing. Employment generation is beneficial for both short-term and long-term real estate investors whom you count on to buy your wholesale real estate.

Average Renovation Costs

Renovation expenses will be crucial to many property investors, as they typically buy low-cost rundown houses to update. Short-term investors, like home flippers, don’t make money if the acquisition cost and the repair costs total to more money than the After Repair Value (ARV) of the property. Look for lower average renovation costs.

Note investing involves obtaining debt (mortgage note) from a mortgage holder at a discount. This way, you become the lender to the original lender’s borrower.

Loans that are being paid off on time are thought of as performing loans. They give you stable passive income. Some mortgage investors look for non-performing loans because when the mortgage investor cannot successfully re-negotiate the loan, they can always acquire the collateral at foreclosure for a low price.

Ultimately, you could accrue a number of mortgage note investments and be unable to manage them without assistance. At that point, you might need to utilize our directory of Flint top home loan servicers and reassign your notes as passive investments.

When you find that this plan is a good fit for you, put your firm in our directory of Flint top companies that buy mortgage notes. This will help you become more visible to lenders offering lucrative opportunities to note investors like yourself.

Factors to Consider

Foreclosure Rates

Investors searching for current loans to purchase will want to find low foreclosure rates in the community. If the foreclosures happen too often, the area might nevertheless be desirable for non-performing note buyers. If high foreclosure rates are causing a slow real estate market, it might be tough to resell the property after you foreclose on it.

Foreclosure Laws

It is critical for mortgage note investors to study the foreclosure laws in their state. They’ll know if their state uses mortgage documents or Deeds of Trust. While using a mortgage, a court has to approve a foreclosure. A Deed of Trust allows you to file a public notice and start foreclosure.

Mortgage Interest Rates

The mortgage interest rate is set in the mortgage loan notes that are acquired by note buyers. That rate will undoubtedly impact your investment returns. No matter the type of investor you are, the mortgage loan note’s interest rate will be significant to your forecasts.

Conventional lenders price dissimilar mortgage loan interest rates in different parts of the country. The stronger risk taken on by private lenders is reflected in bigger mortgage loan interest rates for their mortgage loans compared to conventional mortgage loans.

A note buyer should know the private and traditional mortgage loan rates in their regions at any given time.

Demographics

If note buyers are deciding on where to purchase mortgage notes, they will review the demographic information from possible markets. Mortgage note investors can learn a great deal by studying the extent of the populace, how many residents have jobs, how much they earn, and how old the citizens are.
Mortgage note investors who like performing mortgage notes look for areas where a high percentage of younger residents have good-paying jobs.

Investors who purchase non-performing mortgage notes can also make use of stable markets. In the event that foreclosure is necessary, the foreclosed house is more easily unloaded in a good real estate market.

Property Values

As a mortgage note investor, you must look for borrowers having a cushion of equity. If the lender has to foreclose on a mortgage loan with lacking equity, the sale might not even pay back the amount owed. As mortgage loan payments lessen the amount owed, and the market value of the property goes up, the borrower’s equity goes up too.

Property Taxes

Most homeowners pay property taxes to lenders in monthly installments along with their loan payments. The lender passes on the taxes to the Government to make sure the taxes are submitted without delay. If the homebuyer stops paying, unless the mortgage lender pays the taxes, they will not be paid on time. If taxes are delinquent, the municipality’s lien supersedes any other liens to the front of the line and is taken care of first.

Because property tax escrows are combined with the mortgage payment, growing property taxes indicate higher house payments. Homeowners who are having difficulty handling their loan payments may drop farther behind and sooner or later default.

Real Estate Market Strength

A place with appreciating property values has excellent potential for any note buyer. They can be assured that, if necessary, a defaulted collateral can be liquidated for an amount that makes a profit.

Mortgage note investors also have a chance to make mortgage loans directly to borrowers in consistent real estate communities. It is a supplementary stage of a mortgage note investor’s career.

A trust that owns income-generating properties and that offers shares to people is a REIT — Real Estate Investment Trust. This was initially done as a way to allow the ordinary investor to invest in real property. Shares in REITs are economical for the majority of people.

Investing in a REIT is considered passive investing. The risk that the investors are taking is distributed among a collection of investment assets. Shares in a REIT may be unloaded when it is beneficial for you. However, REIT investors don’t have the ability to choose particular assets or locations. You are confined to the REIT’s collection of real estate properties for investment.

Real estate investment funds are in essence mutual funds specializing in real estate businesses, including REITs. The fund doesn’t hold real estate — it owns interest in real estate firms. These funds make it easier for additional people to invest in real estate. Whereas REITs have to distribute dividends to its members, funds do not. The benefit to investors is created by growth in the value of the stock.

You can find a fund that focuses on a distinct type of real estate firm, like residential, but you cannot suggest the fund’s investment assets or locations. As passive investors, fund participants are content to let the management team of the fund determine all investment determinations.