First Milwaukee Rental Property

[Mitchell Behm]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $306,000
Cash invested: $10,500

House-Hack. $2000 fixed rate mortgage and $1200 rent for upper.

What made you interested in investing in this type of deal?

It was an easy way to get into the real estate investment game. FHA loans allow you to put as little as 3.5% for down payment.

How did you find this deal and how did you negotiate it?

I was sent a link from my mother when I just about gave up on finding something available without a contingent offer. I knew that I couldn't give up so I looked at the deal and it was worth putting an offer in. The owner was older and needed to get out of this rental property. I was able to get the owner to pay for closing costs because he needed to sell fast.

How did you finance this deal?

I financed using a 30 year fixed FHA loan.

How did you add value to the deal?

The house is older and needed basic upgrades like appliances, paint, tile, etc. Landscaping was also needed.

What was the outcome?

I now pay for a small amount of my mortgage while my tenants pay the larger portion. The amount I pay now is much lower than the market rent in the area. Now I am able to pay myself, rather than someone else.

Lessons learned? Challenges?

Simple renovations seem easy at first, but require more attention and learning than I thought. It would've been much easier for me to hire contractors for the work and save me time/money. Depending on the person, that may be a good option for you.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with Tim Ludowissi with Boss Realty out of Wisconsin and also loan officer Glenn Strozewski from Associated Bank. They are both well informed in the real estate market and investing.

[Eric Abel]

Congrats!!!! That's awesome, you're finally in the game :). I'm a fellow house hacker in Washington County. Just out of curiosity how many offers did put in before getting an accepted one?