First Property/Househack in Milwaukee

[Tyler Haanen]

Investment Info:

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

Purchase price: $171,000
Cash invested: $75,000

Purchased our first property as a duplex to house hack with my wife.
3/3 Brick style duplex, C neighborhood in Milwaukee
Rehab: 15K roof, 10K new furnaces, 3K new water heater. Completely renovated and furnished lower unit with rest.
Rents: $1500 Lower, $1100 (househack, market rent) Cashflow $500, COC around 7.2%
Think we could of gotten atleast $1650.

Approx. 30K to rehab/furnish the upper, but if we got $1650 for the upper, we would cash flow of $900, COC of 9.7%.

Not bad for the first 1!

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

We were interested in investing in multifamily properties, and were looking for a house hack that had some potential with low downside.

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

MLS, and I didn't negotiate as well as I should of. We did get a few repairs like GFI outlets and a Roof patch but nothing significant.

How did you finance this deal?

5% down Freddie Mac residential loan.

How did you add value to the deal?

We renovated the entire downstairs which boosted its market rent. We furnished it to allow us to rent to travelling 30+ day renters.

What was the outcome?

So far so good, we are renting to a medium term renter (travelling nurses) with 0% vacancy so far (booked since New Years Eve, two weeks or so after our contractor finished)

Lessons learned? Challenges?

Too many to count.
It definitely motivated us to look for BETTER deals to give us even more room for error (or profit).
Setting contractor expectations up front is something we want to do next time. We never understood when we would get our project done. We also had some contractors delay us by not communicating and rescheduling (after we had to bother them).

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

Carol Ford from Waukesha State Bank made the loan process very smooth!