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Updated about 3 years ago,

User Stats

4
Posts
3
Votes
Robert Brown
3
Votes |
4
Posts

Rookie: Looking for advice to move forward with small multi's

Robert Brown
Posted

Good day!

Been an exciting 2 years, and hopefull i'm just beginning!!

**1**
Closed on a local  (Kenosha, WI) Duplex in May 2020..
Upper/Lower ~ 1,000 sq fot per floor, plus basement storage/laundry and a large garage.
moved into the lower Aug1.
20% down, on effectively $125K... appraised then for $140K, more now (appreciation plus repairs)
Bank gets* $728/mo  Upper tenant pays $755 (still well below market)
( insurance of ~ $59/mo and water $25/mo not escrowed)
* i was paying $1000/mo all-in at my 1br ~ 550 sq foot apartment  rent/garage rent/insurance/utilities etc..

**2**
While i was under escrow on #1 my father had passed away. Both my brother and myself are not local to the hometown (Escanaba, MI) so things were slow moving.   Upon discovering that the home value was much less that we would have guessed  but the prospective rent was much higher than thought i decided to buyout my brother.

so before new years 2020 i had a 1378 sq foot 3 bedroom "farmhouse", full basement with laundry,  large corner lot and  large garage.  tenants pay all utils. including trash/water/sewer/etc
PITI is $370/mo ; rent is $800 I was able to get this home withotut a down payment.. we got it out of the estate's name.. then brother quit-claimed his portion to me.. i then did a cash out "refi" to pay out brother.

**3**
the "plan" was to wait until spring 2022 to purchase the next adventure
(seems as all my tenants are on M2M  i cannot use the rental income until it hits my Sch E, so had planned to wait until after taxes)

but i never stop looking and found a duplex in the next town over (Racine, WI)
Another over/under Duplex ~ 1,000 sq/ft per floor
Laundry/storage in basement, small garage
as listed tenants were paying $675/$695
25% down as it  is an investment on $150K
PITI+water is ~$900/mo  gross rent is now $1695/mo and still has  room to grow.

**Moving Forward**
I've been saving then buying.
I figure between the 4 rented units and the fact that i *agressively*  save at my W2 job.
I could recoup the 25% downpayment in about a year.. and repeat. ( similarly priced duplex)

While inventory of such is low around here, I'd LIKE to get into  a decent 4-flat..
at that point i'd likely move into it to take advantage of owner/occ items..
specifically < 25% down..

WHAT should i be looking for as i grow my portfolio?
I know i need to start looking more into tax strategies.
I understand that save/buy is a (relatively) slow  way to expand.. but i'm also not looking for a "Boom"
I'd be hard-pressed to refi... i've decent  rates and for now i'm looking at cashflow until i'm not dependant on my W2 job ( i think  that at 7 units i could "get by"..barely) then i can  move towards being more concerned on long term wealth/retirement/equity

The rentals have their own business account that i do not dip into*
* I do not pay myself rent, BUT the business account does pay my personal gas/electric.

from my W2 earnings i spend about $1300/mo on everything ( from car insurance to eating out), rest is saved

any new downpayments are a mix of business account and savings

With the 5 total units ( 4 rented; 1 personal use)  I "Cashflow" about  $1K/mo
but that number does not account for any CapEx.

What might you change/suggest about my strategy?

Robert





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