Single Family student rental

[Mike Lauenstein]

Investment Info:

Single-family residence buy & hold investment in Milwaukee.

Purchase price: $350,000
Cash invested: $130,000

Bought a house on the east side of Milwaukee, near UW Milwaukee to rent to students.

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

Had the opportunity to use money from 1031 to invest. We live in Denver which is very expensive, then looked at Milwaukee where our son is attending university. We found a house near school that needed work - perfect since we are very handy

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

My sister-in-law is a realtor and helped us find the property after one day of touring expensive and poorly maintained student housing. This was owned by a family whose parents had passed away. We did pay slightly over asking because the market was moving fast.

How did you finance this deal?

We had money from a 1031 investment that we used for the down payment. Conventional bank loan with 20% down.

How did you add value to the deal?

Spent 5 months and 50K renovating. We added 2 bedrooms and a bath and a lot of work to bring the rest of the building livable.

What was the outcome?

It is a very nice house for students or a family. It has the possibility to have a separate entrance for a 3rd floor apt.

Lessons learned? Challenges?

The seller would not accept any inspection contingencies. We did have an inspection so we knew what we were up against. We believe their concern was the entry way with lead lined floor with a decorative design. To replace the whole floor would need to be taken out.

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

Claudia Graf, realtor - Shorewest Realtors