Sean Larson - Cody & Co.

Property Story
"Fontenelle"

It's been a while since I posted a property story! This one is about the primary home I lived in for about 3 years. I offered on this one on a dark, rainy night back in October of 2020 after walking it for about 10 min. I knew it had a decent spread immediately as well as after renovations. I also liked it because, although it was definitely "grandma's house", it would easily attain conventional financing.

However, to help my offer get accepted and at a lower amount in a tough market, I purchased this with private money for 185k. The sellers received higher offers but accepted mine because it was a cash offer and waived inspections- having my builders license allows me to examine a property and feel pretty confident about what I find.

As soon as I closed I started the loan process to pay back the private money. In between purchasing with cash and getting it appraised I had friends and myself remove wallpaper and paint as much of it as I could to help with general cosmetics. Every bit can help with an appraisal. However, I did NOT want to gut anything just yet, remove carpet/expose subfloor etc. because it needed to appraise for the conventional loan so I just did what I could to help in general before the appraisal. About a week after purchasing, it appraised for 225k! This meant I could pay back my points and interest to my private lender AND get a conventional loan at 90/95 LTV (I can't remember) with zero dollars out of my pocket...well besides paint I guess! My plan was already working...

Then, over the next few years I remodeled it from top to bottom, finished an unfinished basement, added two legal bedrooms and an additional bath and listed it. It's hard to say what renovations cost because it was over such a long time but I estimate it cost me about 28-32k with me doing almost all of the work myself. I can say that the materials, excavation equipment rentals and electrical (hired a professional) for the basement alone were about 12k.

The best part? When you live in a home as your primary for 2 out of the last 5 years, uncle Sam doesn't tax you on it!

The numbers:
Purchase price: $185,000, 2020
Investment type: Owner occupant, single family home
Sales Price: $340,000, 2023
Net: $146,000, TAX FREE

(You can call it 146k or take away what I paid for my mortgage and renos and call it 80k but you have to live somewhere! Those kind of points are hard to quantify but 80k and free living for 3 years sounds pretty good too :)

Let me know if you have any questions and if I can help you do this too!

I'd like to give a shout out to Chris Alicki and West Michigan Mortgage for a great presentation on marketing today! Chris and I are ready to help you buy in West Michigan!

Sean has the skill and the experience!👏🏼 Contact Cody & Co today!

📲 616 930 3148
📧 [email protected]

Full review below⬇️
Sean has navigated me through 2 of the best financial decisions I’ve made - house hacking back to back duplexes that now pay the mortgage on my SFH (and then some depending on the month). His humbly successful investment property portfolio and expertise in the skilled trades, combined with his natural curiosity, creative problem solving skills, and real world experience make Sean an invaluable asset to have in your corner whether looking to buy a SFH or invest in rental properties that create passive income.

His knowledge of unconventional financing options, ability to spot often overlooked red flags during walk throughs while providing “ball park” estimates for repairs/updates being considered, and not being afraid to ask sellers the difficult questions or propose out of the box concessions will keep more money in your pocket at closing, provide a clearer picture of your overall financial position when deciding to make an offer, and provide peace of mind that you’re making the the right financial decision for your future.

Here she is! New everything! Finished basement. 3 yr roof, 1.5 yr a.c. heated tile floors and new flooring throughout to name a few! This is my favorite neighborhood out of all the places I've lived. Super quiet, awesome neighbors and no city feel even though it's just minutes from downtown.

Thanks to Charlie for finding it for me in 2020, Holli for living through construction and helping physically a lot-especially outside and to all the random help I got here and there. Also a shout out to JW Home Staging & Design for the amazing staging!

500 Fontenelle Street SE, Grand Rapids, MI 49548

Coming soon!

15k in the stock market with a 60% gain makes you 9k. The same amount down on 150k property makes you 90k when it appraises for 242k like one of mine did today. Purchased 3 years ago.

Why do I have to convince people to get into real estate again? 🤔

I have a goal of helping one buyer or seller this month in West Michigan! Do you know of anyone looking for help from an agent who also personally invests in Real Estate?

Check out this New Listing! You won't find a cheaper home that is ready to go!
https://www.flexmls.com/share/76XrN/820-Woolsey-Drive-SW-Grand-Rapids-MI-49503

I was fortunate enough to represent both sides of this transaction! Thanks to Dave and Adam for a great start to my week!

Hi all, I'm selling a 2bd sfh in black hills soon. Was previously rented for $1350/mo. Could be a 3 bedroom and still have a living room but there's no basement and no garage. Big backyard though. I was thinking about listing for $145,000. 820 Woolsey st.

I also have an off market duplex in east grand rapids one block from Wolfgang's for 350k. Appraisal was done, FHA repairs (painting spots) have all been done but buyer backed out due to job change. Lender says you could use appraisal that's already been done. I would be representing buyer here. Split utilities, one unit rented for $1150 and one becoming vacant. It's a really nice spot.

Pm for more details or reach out to me at [email protected]

Not only household debt low but the US has the 3rd most affordable housing in the world!

Take a look at this awesome listing with a pole barn! Let me know if you want to see it!
https://www.flexmls.com/share/6nwRv/2357-Kinney-Avenue-NW-Grand-Rapids-MI-49534

2357 Kinney Avenue NW, Grand Rapids, MI 49534 This large, custom-built, 3 bedroom, 2 bathroom home has been completely renovated from top to bottom. Located in the desirable Kenowa Hills school district, it has all the amenities you are looking for plus a HUGE POLE BARN on almost a half acre! New stainless steel appliances, luxury vinyl plank f...

Make sure you don't step over dollars to pick up dimes! On average, people selling their own homes cost themselves $58,000!!!

I'm excited and sad to say I've listed one of my own. I thought I'd never sell. This is in arguably the best location in Grand Rapids. I started my real estate journey on
THIS street.
Check out the top unit any time! Sean Larson
https://www.flexmls.com/share/6gZv9/228-Henry-Avenue-SE-Grand-Rapids-MI-49503

https://time.com/nextadvisor/mortgages/mortgage-news/dont-wait-to-buy-a-home/

Waiting on the Housing Market to Crash? Don't, Experts Say. Here's How Today's Market Is Different From the Great Recession Housing Bubble The hot housing market has some buyers hoping it’s a bubble waiting to burst. Experts say this market is unlike the housing bubble 15 years ago, and it might not be wise to hope for the market to crash.

I have leads on 3 duplexes in Muskegon all under 140k with some taking in $1200/month currently!

Sean Larson - Cody & Co. now takes appointments on their Page.

Who knew Teddy was talking about Grand Rapids! :)

Let's go!

Two Reasons Why Waiting To Buy a Home Will Cost You If you’re a homeowner who’s decided your current house no longer fits your needs, or a renter with a strong desire to become a homeowner, you may be hoping that waiting until next year could mean better market conditions to purchase a home.

There might be snow on the ground but things are staying red hot for a while!

If You Think the Housing Market Will Slow This Winter, Think Again. From the opportunity to take advantage of today’s low mortgage rates to changing homeowner needs, Americans have more motivation than ever to buy a home.

"Boston" - Grand Rapids, MI
Dec. 2018
Purchase: $42,000
Rehab: 38k with me doing almost no work there
Rehab length: 6 months
Rent: $1250/month

Timeline:
Dec. 2019
Line of credit obtained for 90k, interest only, 3.99%, 10 yr. I now have all my money back!
Within 6 months, 3 other properties (5 units) were bought with some of those funds.
Fall 2020- Boston appraised for 130k as I refinanced into a 30 yr. investment loan at 3.625% interest!

In December 2018, a friend shared a property listing with me. It needed work - like nearly all properties do. I handed management to United Properties. They handled most of the rehab and placed tenants.

Let’s review the timeline and numbers. After all, that’s what you’re here for!

First, I love this story. This is the tale of how buying one house gave me the cash for buying THREE houses with a total of five units.

I closed in December 2018 for $42,000. This was a vacant, hoarder situation with multiple refrigerators and freezers packed FULL of meat for months. Oh, and the house had no power. The kitchen was pretty decent though! The rehab took $38,000. I’m a licensed builder, but I didn’t do much of the work since I was also working full time. Having someone else do the work changed the numbers I had projected, but I was just too stretched. I contacted my property management company, and they handled the rest for me. Yes, it costs more to have them manage the projects, find contractors, and complete the project on time - it was absolutely worth it. The rehab took six months. It is pretty much a different house. The management company listed it for $1250/month, and rented it quickly.

At this point, I have $80,000 into this house. It gets better from here. This is the part that makes me excited about the power of real estate. In December 2019, I was able to get a line of credit for $90,000 (10 years, 3.99% interest). That’s right. A house that cost $80,000 allowed me to get $90,000!
During the year I owned that house, I continued to set money aside. The savings plus this infusion of money effectively allowed me to purchase a house in Muskegon and two in Grand Rapids over the next 6 months.

Is there more to the story? Sure is. Check this out. Fall of 2020 the house appraised for $130,000. I refinanced into a 30 year investment loan at 3.65% interest. I paid off the line of credit, got MORE cash out, and kept going!

The Bottom Line: I bought and renovated this house for $80,000 and immediately obtained a line of credit once it was rented – which was about one year after I bought it. I bought more properties with the 90k, refinanced out of the Line of Credit into a 30 yr conventional loan, ended up with an extra $15,000, managed to get three more houses, and a down payment for a 4th (which I actually closed all at once)! After the refi, this house cost me nothing and afforded me 3 – 4 more properties. This is what BRRRR and financial freedom are all about!!

Purchase price: 110k
Rehab cost: ~8-10k
Appraisal: $159,000
Having this happen to a client you've never met from CA on one of your first deals together and they now own a property with $0 money in it:
PRICELESS!!!!!!

Good news!
House Approves Short-Term Rental Protections with Bipartisan Vote



The Michigan House of Representatives worked late into the evening and voted early this morning in support of HB 4722. The Michigan Realtors®-supported bill provides important clarity and meaningful protections for short-term rentals, while also preserving the necessary local controls to regulate the practice. In bipartisan fashion, the House passed HB 4722 with a 55-47 vote. The bill, sponsored by Representative Sarah Lightner (R - Springport Township) would amend the Michigan Zoning Enabling Act to clarify that short-term rentals are a “residential” use of property.



Absent a definition for short-term rentals, Michigan’s courts have struggled to address private property rights associated with short-term rental rights. In many communities, especially those where second homes are prevalent, the practice has been banned or severely limited. The bill designates a “short-term rental” as a single-family residence, a dwelling unit in a 1-to-4 family house, or any unit or group of units in a condominium complex as eligible for terms of 30 consecutive days or less. Local Governments maintain their ability to reasonably regulate through their health and safety powers to ensure accountability. This change will prevent local governments from banning short-term rentals based on zoning designations.



HB 4722 will now head to the Senate for consideration. Michigan Realtors® thanks all who supported this reform, as well as, Representative Sarah Lightner and Speaker of the House Jason Wentworth for their leadership on this important issue for private property rights.

Henry I : The BRRRR with so many R's

"Henry I" - 3 Unit, Grand Rapids, MI

Brrr #1, July, 2015
Purchase price and type: $163,500, 3.5% down
Loan Product: 3.5% down, FHA Loan ($5,800)
Monthly PITI: About $1100/mo
Rehab: 45-55k
Rehab length: 2-3 years
Rent: $1050/month (beginning total for 2 occupied units)
2018 Refi: streamline FHA cash out, or something like that.
Rents:~1700
Appraisal: $230,000
Cash: ~$33,000
Loan amount: ~190k
Money in deal: 15-20k
Hard to quantify benefits: + 3 years of living free
Fall 2018- move out, rent my unit
Rents: $2665
Brrrr # 2
2020: Refi into 30 yr. Conventional
Appraised value: $280,000, no cash out
75 LTV, 3.625%, 30 yr. Conventional
Monthly PITI: ~1500

2021: Rehab the other two units
Cost: 23-28k/ongoing
Rents: $3400-$3500/month
Total cash invested: 35-45k
Est. Value: $370,000
Cash on Cash Return: ~15-20%

Henry I
After feeling like I had a stable paycheck in academia, reading my first few real estate investment books, and discovering my local real estate group - I felt like I was ready to begin this journey. On July 31, 2015, I closed on what I’ll call “Henry I” as my primary residence.

I closed on the last day of July for about $5800 using an FHA Loan.

The next day was rent day. I met with the tenants, collected just over $1,000 in rent, raised the rent, and began rehabbing this neglected, historic, 3 unit home. I rehabbed my unit for a few months and moved in at the end of 2015. Over a few years, rents went to around $1600 total for the two other units. My mortgage was only $1200. Oh, and I lived there! What buying and moving into this property did to my savings rate was somewhere around...incredible! I had enormous amounts of cash that could have piled up for down payments on other houses, but I had enormous deferred maintenance issues to deal with. It wasn’t pretty and was anything but passive. I spent many months on a ladder. I had many periods of surviving paycheck to paycheck to cover the rehabbing costs of this property. I was aggressive but could (mostly) count on rents and my regular paycheck. I absolutely stretched myself financially, physically, and emotionally for this investment. But, I was adding value at the same time I was living for “free”. This allowed me to throw everything I had into it. I was more than happy to have this problem since it was everything I had read about. I even used an 18 month, interest free credit card to put on a new roof. Collecting those first rents, improving a place, and watching it’s value go up because of something YOU tangibly changed, improved, repaired, etc. This was magic before my eyes! I remember feeling so “rich” with my 35k/year salary. It was everything for me then.

Fun fact: when you buy a property you normally do not have a mortgage payment until 1.5-2 months after closing. Often, at close, you will (should) receive prorated rents as well as security deposits. Depending on the close date and how the 1st mortgage payment falls, you might also collect rents again before your first mortgage payment!

This wood sided, historic 3 unit needed everything. When I say “everything”, realize this - it’s still a work in progress after 7 years. It needed paint on every surface﹘inside and out, 0-33 feet up. All three units needed most rooms remodeled including kitchens and baths. It also needed a roof. It took the better part of two summers to replace siding, scrape, and paint 90% of the exterior. All units hadn’t been updated for several owners, several tenants, and possibly even decades. I found a syringe in a cabinet and dead squirrels in the attic. One unit had a smoker, but once I moved in I asked them to stop smoking inside because it permeated the entire house. Plaster was missing from many visible spots on walls and ceilings throughout all of the units. The bathroom in my unit was a complete gut job. I was all over almost every surface of this place. It took the better part of 3 years, over 4,000 linear feet of cedar siding, 30+ windows being fully restored or painted, 3 units painted throughout, roof replacement, and everything in between was needed to get the property stabilized.

This was like phase one, or BRRRR #1. BRRRR was coined by Bigger Pockets but people have been doing this forever. Buy, Rehab, Rent, Refinance, Repeat. I moved in immediately, improved the property as fast as I could afford to, and got as much of my money back to do it again somewhere else as soon as possible. Everything cost more and took twice as long as I thought it would but it was an amazing first experience that came with so many invaluable lessons, not to mention the $33k cash back a couple years into this.

Since I had tenants occupying all units after my refi, I didn’t want to create a turnover to improve their units. I saved/used that cash from another investment about a year later (“Boston”). My refi bumped my mortgage payment up, but my rents still covered my mortgage while living there for “free”. I was at the tail-end of this first phase of sorts for rehabbing which made me happy with the higher payment - especially since it allowed me to do what I had been reading about. I was about to do it again with the same money. I let houses buy houses but we’ll get to the details about that in a later post.

A year later, I moved away from this property and placed a qualified tenant in my unit. There were a couple of quiet years where I didn’t have to do much and that was nice. I finally was physically away from this property which was strange, but I was happy I was done wrestling a ladder around it. During this quiet time, I received about $600/month NOI (Net Operating Income).

My plan was always to bring this property to market value through value add. This summer, my property management company started rehabbing the other units as tenants turned over. The apartment maintenance was stabilized but still performing hundreds of dollars below market value.

As I write, two of three are rented and the third unit with the most potential is underway. My neighbors rent a similar unit for 1300-1700/month. My numbers are something around 1400-1500 for the final unit bringing total rents to around $3500/month.

It’s hard to calculate a return on this one because I had lived for “free” for several years, had a 25% P.R.E on the property when I lived there that fell off when I moved, and it’s happened over several years but based on what I have tied up here, I am making about a 25-35% cash on cash return.

Yes, this doesn’t count my time there but thousands of hours of work on this property and others eventually led to me obtaining my builders license which means there was tangible net benefit from it and not a cost, not to mention the accidental additional income stream I created for myself. My business, Larson Historic Renovations, grossed about 30k/year for a couple of years while I rehabbed this property and worked full time. To me, that is worth every drop of sweat, blood, or tears this property caused me!

Without a W-2 generating job, I can’t likely BRRR this again for a while even though the 2 new units will push the value north of $370,000 based on the property comps in that area.

The Bottom Line: After all of the refinancing and rehabs between 2015 and this summer, I will have about 45-50k into this property that will net cash flow around $900-$1,000/month when complete. This is no “home run” story, but I started here. It was one of the best decisions of my life. This property is why I’m writing today. It’s why I have 7 other properties. When I can’t work, this property will be there for me. Paying me. Forever. This is power! This is the start of financial freedom, and it works!

Want to know more about investing in real estate? Here's a nice article about calculating and understanding ROI.

How to Calculate ROI on an Investment Property Lots of people look at property as an investment opportunity because it will hopefully grow in  value over the years. If you’re buying an investment property to rent, you’re not only hoping the value of that property increases with time, you’re planning to make a profit by renting it out, too...

Sean Larson - Cody & Co. updated their phone number.