First time caller, long time listener... Introductions

[Michael R Fox]

Good evening everyone-

Writing this intro post has been on my list for a few weeks now.  My best buddy and business partner (@Pete Woelfel) finally convinced me to cross this off my list tonight. He asked me today over Slack what I was going to accomplish today to get myself one step closer to financial independence.  This is it...

I am new to real estate investing, looking for that first deal.  Have been reading/listening/consuming content for the past 6 months or so and @Pete Woelfel and I are about to try to acquire our first property together.  Pete has his own duplex in Wauwatosa that he house hacked years ago and is now his rental.  This will be the first one for me.

My other business partner (my wife Stephanie) and I have an agreement that I cannot actively manage the property.  So Pete is going to do that and I am going to handle all the accounting and back office stuff.  We have a number of other friends that have expressed interest in our plan to build up a portfolio of properties in the Wauwatosa and surrounding areas of Milwaukee.  We may even dabble out west here in Waukesha county where I live if we can find a good deal.

I have been trolling the forums for a while now, following most of the discussions and learning as much as I could.  Looking forward to networking with all you in the future.

Pete and I have our kick off meeting tomorrow with a Real Estate Attorney that is going to help us craft our operating agreement for the properties we hope to buy together. The last piece of the puzzle that needs to fall in place... Then we are on to making the numbers work on something we find on the MLS or through anyone around here.

Pete and I have a mostly regular weekly or bi-weekly catch up session in the morning at the Collectivo on 68th and Wells.  If anyone is interested in networking or meeting up and talking about whatever, PM one of us.

Thanks to everyone that hangs out around here for providing such fantastic content on a regular basis, looking forward to adding back to the community as Pete and I embark on this journey and hopefully add some stories of our own along the way.

-Mike

[Michael R Fox]

Quick update on @Pete Woelfel and my property search...

We found a property on the NW side of Milwaukee.  Nice neighborhood, 3/1s going for $105K - $125K depending on condition.  We were able to secure our property for $115K via @Marcus Auerbach.  We had a great time working with him and all his experience really taught us a lot...

We opted to go the commercial loan route. 5.25% 5 year arm amortized over 25 years. Since we were buying as partners along with our wives, we had an operating agreement spun up and formed an LLC. With the commercial loan we were able to title the property to the LLC.

In terms of out of pocket costs, Pete and I had to pay for the hardwoods to get refinished and buy a few things.  Other than that, it was turnkey.

We were expecting the financial model to play out much worse based on the robin's egg blue furnace that was originally in the property, but through Marcus' help, we were able to secure a new furnace on the seller's home warranty policy during the inspection period.  

We closed in mid December and Pete immediately spun up a website and posted on Zillow, Hotpads, Trulia and Craigslist.  We started with rents at $1375 and didn't get many hits for that price point and no one was qualified based on our minimum qualifications.  After the new year, Pete dropped the price to $1295/month and the google voice number and the gmail lit up.  By the middle of the month, we had a signed lease with our tenant for a year.  Pete was able to secure a client for us in less than 30 days with a holiday thrown in the middle.  Kudos to him.

Pete and I are continuing to monitor the MLS for relatively good values in the same area. Based on the strength of the potential tenants that popped up after we dropped the rent sub $1300, we are convinced that the area is underserved for single family rentals...

We are lining up showings for some properties on the MLS right now who's numbers seem to pass the sniff test. We really won't know if the financial model will hold up until we walk them and need to look at possible renovations...

Hope this is helpful for anyone starting out or anyone in the MKE area in general.  If you have any specific questions, hit me up with a PM or post a response in here.

Hope everything is going well for everyone in the new year...

Mike