Ultimate Saginaw County Real Estate Investing Guide for 2024

BRRRR means “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a plan for repeated expansion. This plan hinges on your ability to withdraw cash out when you refinance.

When you have finished rehabbing the home, the market value has to be higher than your complete acquisition and fix-up costs. The asset is refinanced based on the ARV and the difference, or equity, comes to you in cash. You purchase your next rental with the cash-out money and start all over again. You acquire more and more rental homes and constantly grow your rental revenues.

After you’ve accumulated a considerable list of income generating properties, you might decide to allow someone else to handle all rental business while you get mailbox net revenues. Locate one of property management companies in Saginaw County MI with a review of our complete list.

Factors to Consider

Population Growth

The growth or fall of an area’s population is a good barometer of the region’s long-term desirability for rental investors. An increasing population normally illustrates active relocation which means additional tenants. Businesses view this as an attractive place to relocate their business, and for workers to move their households. An increasing population builds a stable foundation of tenants who will handle rent bumps, and a strong seller’s market if you want to unload your investment properties.

Property Taxes

Property taxes, maintenance, and insurance costs are investigated by long-term lease investors for determining expenses to predict if and how the investment will be viable. Unreasonable costs in these categories threaten your investment’s returns. High real estate taxes may indicate an unreliable market where expenses can continue to rise and must be considered a red flag.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that tells you how much you can expect to collect for rent. An investor will not pay a steep amount for a property if they can only charge a limited rent not enabling them to repay the investment within a suitable time. The less rent you can charge the higher the price-to-rent ratio, with a low p/r indicating a more robust rent market.

Median Gross Rents

Median gross rents are a significant illustration of the stability of a rental market. You should discover a site with stable median rent growth. If rents are being reduced, you can eliminate that area from deliberation.

Median Population Age

The median citizens’ age that you are looking for in a strong investment environment will be near the age of salaried people. You’ll discover this to be accurate in areas where people are migrating. A high median age shows that the existing population is aging out without being replaced by younger workers relocating there. This is not promising for the forthcoming economy of that region.

Employment Base Diversity

A greater amount of companies in the area will boost your chances of strong profits. If there are only one or two major employers, and one of them moves or closes shop, it can lead you to lose paying customers and your asset market worth to go down.

Unemployment Rate

You can’t have a stable rental income stream in a location with high unemployment. Jobless individuals cease being clients of yours and of other businesses, which causes a domino effect throughout the market. Individuals who continue to keep their jobs may discover their hours and incomes reduced. Even people who have jobs will find it hard to pay rent on time.

Income Rates

Median household and per capita income will reflect if the tenants that you want are living in the location. Improving salaries also inform you that rental rates can be increased over the life of the asset.

Number of New Jobs Created

The active economy that you are hunting for will generate a high number of jobs on a regular basis. A higher number of jobs equal a higher number of renters. This allows you to acquire more lease properties and replenish existing vacant units.

School Ratings

Local schools will have a strong influence on the housing market in their locality. When an employer looks at a city for possible expansion, they know that good education is a prerequisite for their workers. Good tenants are a consequence of a robust job market. New arrivals who buy a house keep property values up. You can’t run into a dynamically growing residential real estate market without highly-rated schools.

Property Appreciation Rates

High property appreciation rates are a necessity for a lucrative long-term investment. You need to be certain that your investment assets will grow in market value until you decide to sell them. Substandard or declining property value in a location under consideration is not acceptable.

A furnished residential unit where tenants stay for shorter than 30 days is considered a short-term rental. The per-night rental rates are typically higher in short-term rentals than in long-term units. These apartments could demand more frequent repairs and sanitation.

Average short-term renters are excursionists, home sellers who are buying another house, and business travelers who need more than hotel accommodation. Regular real estate owners can rent their homes on a short-term basis via platforms like AirBnB and VRBO. This makes short-term rentals a convenient method to try real estate investing.

The short-term rental business includes interaction with tenants more often compared to yearly rental units. This determines that landlords deal with disputes more frequently. Ponder covering yourself and your assets by joining any of real estate law experts in Saginaw County MI to your team of experts.

Factors to Consider

Short-Term Rental Income

Initially, calculate how much rental revenue you must have to achieve your expected profits. A location’s short-term rental income rates will promptly show you if you can predict to reach your estimated rental income range.

Median Property Prices

Meticulously compute the budget that you want to spare for additional investment properties. The median values of real estate will show you if you can manage to participate in that area. You can tailor your property search by looking at median prices in the location’s sub-markets.

Price Per Square Foot

Price per square foot can be impacted even by the design and floor plan of residential properties. A house with open foyers and high ceilings cannot be compared with a traditional-style property with bigger floor space. You can use the price per square foot data to get a good broad view of home values.

Short-Term Rental Occupancy Rate

The percentage of short-term rental properties that are currently filled in a location is vital information for a rental unit buyer. If almost all of the rental units have tenants, that market necessitates new rentals. Low occupancy rates signify that there are already too many short-term rental properties in that area.

Short-Term Rental Cash-on-Cash Return

To understand if you should put your cash in a particular property or community, compute the cash-on-cash return. You can compute the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by the cash you are putting in. The result will be a percentage. If a project is lucrative enough to reclaim the amount invested quickly, you will get a high percentage. When you take a loan for part of the investment and use less of your funds, you will realize a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares property worth to its yearly return. High cap rates show that income-producing assets are available in that city for reasonable prices. When cap rates are low, you can prepare to spend a higher amount for real estate in that market. You can obtain the cap rate for possible investment real estate by dividing the Net Operating Income (NOI) by the market worth or purchase price of the investment property. The answer is the annual return in a percentage.

Local Attractions

Short-term tenants are usually individuals who come to an area to attend a recurring important activity or visit unique locations. When an area has places that periodically hold must-see events, such as sports arenas, universities or colleges, entertainment venues, and theme parks, it can draw people from other areas on a recurring basis. At particular seasons, regions with outdoor activities in the mountains, seaside locations, or near rivers and lakes will attract a throng of people who need short-term housing.

To fix and flip a property, you need to pay lower than market value, make any necessary repairs and upgrades, then sell it for full market price. To be successful, the property rehabber needs to pay less than the market value for the house and calculate the amount it will take to rehab the home.

Look into the prices so that you know the exact After Repair Value (ARV). The average number of Days On Market (DOM) for homes sold in the area is important. To successfully “flip” a property, you need to dispose of the rehabbed house before you have to put out money maintaining it.

To help distressed property sellers locate you, enter your business in our catalogues of cash real estate buyers in Saginaw County MI and real estate investment companies in Saginaw County MI.

In addition, search for the best property bird dogs in Saginaw County MI. These professionals concentrate on quickly locating profitable investment ventures before they are listed on the marketplace.

Factors to Consider

Median Home Price

The region’s median home value could help you find a suitable neighborhood for flipping houses. You are searching for median prices that are low enough to suggest investment opportunities in the area. You must have cheaper real estate for a successful fix and flip.

When area information signals a sharp drop in real property market values, this can point to the availability of possible short sale properties. You will find out about possible investments when you partner up with Saginaw County short sale facilitators. Find out how this is done by reviewing our article ⁠— How Does Buying a Short Sale House Work?.

Property Appreciation Rate

Are home values in the area moving up, or moving down? You have to have an environment where real estate values are constantly and consistently on an upward trend. Unpredictable value shifts aren’t beneficial, even if it’s a remarkable and unexpected increase. Buying at an inopportune moment in an unreliable market can be catastrophic.

Average Renovation Costs

Look thoroughly at the potential renovation expenses so you will find out whether you can achieve your targets. The way that the local government goes about approving your plans will affect your project as well. You need to understand if you will be required to employ other contractors, such as architects or engineers, so you can be prepared for those expenses.

Population Growth

Population growth is a good gauge of the potential or weakness of the location’s housing market. If the number of citizens is not growing, there is not going to be a sufficient pool of purchasers for your properties.

Median Population Age

The median population age is a simple indication of the presence of qualified homebuyers. It mustn’t be lower or more than the age of the typical worker. Workers can be the people who are active home purchasers. The needs of retirees will most likely not be included your investment project strategy.

Unemployment Rate

If you see a region that has a low unemployment rate, it is a good indication of lucrative investment prospects. An unemployment rate that is less than the national average is a good sign. If it’s also lower than the state average, it’s even more attractive. If you don’t have a vibrant employment base, a location won’t be able to provide you with enough home purchasers.

Income Rates

The citizens’ wage stats tell you if the region’s economy is strong. The majority of individuals who acquire a house have to have a home mortgage loan. Their wage will show the amount they can borrow and whether they can purchase a house. Median income will help you determine if the regular home purchaser can afford the houses you are going to market. Particularly, income increase is vital if you want to scale your business. To stay even with inflation and soaring construction and supply costs, you have to be able to periodically mark up your purchase rates.

Number of New Jobs Created

The number of jobs created yearly is valuable insight as you think about investing in a particular city. A higher number of people buy houses when the region’s financial market is adding new jobs. With more jobs created, more potential buyers also move to the city from other locations.

Hard Money Loan Rates

People who acquire, fix, and resell investment homes prefer to enlist hard money and not conventional real estate loans. This strategy allows investors make profitable projects without holdups. Find hard money companies in Saginaw County MI and contrast their rates.

People who are not experienced concerning hard money loans can discover what they need to learn with our detailed explanation for newbie investors — How Hard Money Loans Work.

As a real estate wholesaler, you enter a purchase contract to purchase a residential property that some other real estate investors will be interested in. When an investor who approves of the residential property is found, the purchase contract is sold to them for a fee. The property under contract is sold to the real estate investor, not the wholesaler. You’re selling the rights to the purchase contract, not the house itself.

This strategy involves utilizing a title company that is familiar with the wholesale contract assignment operation and is capable and inclined to handle double close purchases. Locate Saginaw County title companies that work with investors by utilizing our list.

To know how wholesaling works, look through our detailed article Complete Guide to Real Estate Wholesaling as an Investment Strategy. When pursuing this investing plan, list your firm in our directory of the best real estate wholesalers in Saginaw County MI. This will allow any possible clients to see you and reach out.

Factors to Consider

Median Home Prices

Median home prices in the area will show you if your required purchase price range is achievable in that market. As real estate investors want investment properties that are on sale for lower than market value, you will need to take note of reduced median prices as an implicit tip on the possible supply of residential real estate that you may acquire for less than market value.

Rapid deterioration in real property market values could result in a supply of homes with no equity that appeal to short sale property buyers. Wholesaling short sale houses often delivers a list of different perks. But, be cognizant of the legal liability. Learn about this from our guide Can You Wholesale a Short Sale?. When you determine to give it a try, make certain you employ one of short sale attorneys in Saginaw County MI and foreclosure law offices in Saginaw County MI to confer with.

Property Appreciation Rate

Median home value movements clearly illustrate the home value picture. Real estate investors who need to liquidate their investment properties later on, like long-term rental landlords, require a location where property values are going up. Decreasing purchase prices show an equivalently poor rental and home-selling market and will dismay real estate investors.

Population Growth

Population growth numbers are critical for your potential contract purchasers. A growing population will need new housing. Investors understand that this will combine both leasing and purchased housing units. When a region is shrinking in population, it does not require more housing and real estate investors will not be active there.

Median Population Age

Real estate investors have to participate in a thriving property market where there is a substantial supply of tenants, first-time homebuyers, and upwardly mobile citizens buying larger residences. This needs a vibrant, reliable workforce of residents who feel confident to go up in the housing market. If the median population age matches the age of wage-earning people, it demonstrates a favorable residential market.

Income Rates

The median household and per capita income show stable increases over time in regions that are ripe for real estate investment. If renters’ and homebuyers’ salaries are getting bigger, they can handle rising rental rates and residential property purchase costs. Property investors stay out of communities with unimpressive population salary growth indicators.

Unemployment Rate

Real estate investors will take into consideration the city’s unemployment rate. Tenants in high unemployment communities have a hard time paying rent on schedule and a lot of them will miss rent payments completely. This impacts long-term real estate investors who need to lease their property. Real estate investors cannot depend on tenants moving up into their homes when unemployment rates are high. This is a problem for short-term investors buying wholesalers’ contracts to repair and resell a house.

Number of New Jobs Created

Understanding how soon new employment opportunities are generated in the area can help you see if the real estate is located in a strong housing market. New residents move into a market that has more job openings and they require a place to live. Whether your buyer supply is comprised of long-term or short-term investors, they will be drawn to a city with regular job opening creation.

Average Renovation Costs

An essential consideration for your client real estate investors, especially house flippers, are rehabilitation expenses in the area. When a short-term investor improves a house, they want to be able to liquidate it for a larger amount than the whole expense for the acquisition and the rehabilitation. Give priority status to lower average renovation costs.

Purchasing mortgage notes (loans) pays off when the mortgage note can be acquired for less than the remaining balance. When this occurs, the note investor takes the place of the borrower’s lender.

Loans that are being repaid on time are referred to as performing loans. Performing loans earn you long-term passive income. Non-performing mortgage notes can be re-negotiated or you can buy the property for less than face value via a foreclosure procedure.

At some time, you could build a mortgage note collection and start needing time to oversee it on your own. When this develops, you could select from the best mortgage loan servicers in Saginaw County MI which will make you a passive investor.

Should you determine to utilize this method, append your project to our list of promissory note buyers in Saginaw County MI. When you do this, you’ll be discovered by the lenders who announce profitable investment notes for acquisition by investors like you.

Factors to consider

Foreclosure Rates

Low foreclosure rates are an indication that the area has investment possibilities for performing note buyers. If the foreclosure rates are high, the city may nonetheless be desirable for non-performing note buyers. If high foreclosure rates have caused a weak real estate market, it may be tough to liquidate the collateral property if you foreclose on it.

Foreclosure Laws

It’s imperative for mortgage note investors to understand the foreclosure regulations in their state. Are you faced with a Deed of Trust or a mortgage? A mortgage requires that you go to court for authority to start foreclosure. You merely need to file a public notice and start foreclosure steps if you’re using a Deed of Trust.

Mortgage Interest Rates

The interest rate is determined in the mortgage notes that are purchased by investors. That rate will significantly influence your investment returns. No matter the type of mortgage note investor you are, the note’s interest rate will be critical for your calculations.

The mortgage loan rates set by traditional mortgage firms are not equal in every market. Mortgage loans issued by private lenders are priced differently and may be higher than traditional loans.

Mortgage note investors ought to consistently be aware of the up-to-date market mortgage interest rates, private and conventional, in potential note investment markets.

Demographics

A successful note investment strategy incorporates a research of the community by utilizing demographic data. Mortgage note investors can discover a lot by reviewing the size of the populace, how many residents are employed, the amount they earn, and how old the citizens are.
Performing note investors need clients who will pay without delay, creating a repeating income stream of mortgage payments.

Mortgage note investors who look for non-performing mortgage notes can also take advantage of strong markets. If these note buyers need to foreclose, they’ll need a stable real estate market to unload the defaulted property.

Property Values

The more equity that a homeowner has in their property, the better it is for the mortgage note owner. This increases the possibility that a potential foreclosure sale will repay the amount owed. Appreciating property values help improve the equity in the home as the borrower pays down the balance.

Property Taxes

Normally, lenders accept the property taxes from the borrower every month. That way, the lender makes sure that the taxes are submitted when due. If the homeowner stops performing, unless the lender takes care of the property taxes, they won’t be paid on time. If taxes are past due, the government’s lien leapfrogs all other liens to the head of the line and is taken care of first.

If property taxes keep increasing, the homeowner’s mortgage payments also keep growing. This makes it hard for financially challenged borrowers to stay current, so the mortgage loan might become delinquent.

Real Estate Market Strength

A place with increasing property values offers excellent potential for any note buyer. The investors can be assured that, if need be, a repossessed collateral can be liquidated for an amount that is profitable.

Mortgage note investors also have a chance to originate mortgage notes directly to borrowers in consistent real estate communities. This is a strong stream of revenue for accomplished investors.

A trust owning income-generating real estate properties and that offers shares to investors is a REIT — Real Estate Investment Trust. REITs are developed to permit average people to buy into real estate. REIT shares are economical for most people.

Participants in REITs are completely passive investors. The liability that the investors are taking is spread among a collection of investment assets. Investors are able to liquidate their REIT shares anytime they choose. Investors in a REIT aren’t able to propose or pick assets for investment. Their investment is limited to the real estate properties selected by their REIT.

A Real Estate Investment Fund is a mutual fund that possesses stocks of real estate firms. The investment real estate properties are not owned by the fund — they are owned by the companies in which the fund invests. This is another way for passive investors to allocate their investments with real estate without the high startup cost or exposure. Where REITs have to distribute dividends to its shareholders, funds don’t. Like other stocks, investment funds’ values rise and fall with their share price.

You may pick a fund that focuses on specific segments of the real estate industry but not specific locations for individual property investment. You must depend on the fund’s directors to select which locations and properties are selected for investment.