All Forum Posts by: Marcus Auerbach

@Russell Millan Gee - why would you buy something with a tennant in place?? Why would you not want to pick one yourself and know what you get! My recomendation is you buy a duplex in Chicago and move into one side. Fix a few things as needed and rent out the other side. You will be able to get a great 30 year owner occupied fixed rate loan and your rental income should make up for all or most of your mortgage payment. This is an easy way to get started, test the water and learn the basics. You will find many posts about this under "househacking". Welcome on BP and good luck!

I have all tenants set up with ACH autopay, which is automated direct deposit into my account. Most big banks charge a fee for the service, I bank with a smaller one and its part of their service package. I dont give tenants a choice anymore and some are sceptical in the beginning, but after they are signed up everyone likes the convinience.

Thanks @John Horner for asking the question - it is a subject that should be discussed a lot more in the "am I ready to quit my job" space.

Being an Austrian export who lives in the US since 2008 I can tell you the cost of health care in the US is inflated absolutley out of proportion compared to what I have seen in Europe. Partially this seems to be driven by our legal system in the US which is driving cost for malpractice insurnace.

Years ago I was invited to a presidents club meeting of a company selling equipment for cancer tissue diagnostics. Expensive machines with expensive supplies for every test. Turns out the US sales guys made about three time the business volume than their European counter parts. What is driving that? A hospital in Europe would run one tissue test on one machine. The machine is about $100k and the cost for the hospital is about $400 in supplies per test. The test has an accuracy in the high nineties, I forgot the exact number. A US hospital would have two identical machines sitting next to each other and in order to improve the statistical accurancy they will run the same sample on both machines - twice! So four tests. Four time the cost. Why? If they get sued for malpractice they can prove they did everything ethy can - even ran the test four times.

Last summer I was on a business trip in Germany and a US colleague had ran out of meds and had to go to the doctor for a prescription. I went with him to help translate (BTW was not really necessary, every doctor or nurse speaks english). It was a quick visit, took about five minutes and the doctor knew right away what he needed. Of course he'd have to pay out of pocket and when it was time the check out my friend got a little nervous and asked me how much cash I had on me and if they would take a credit card. He could not believe it (and made me verify in German) that the total bill for seeing the doctor visit was Euro 11.25 - that's about USD12!

That is what keeps health care cost and health insurance afordable in Europe - and drives insurance cost in the US.

@Fritz Westfall you might want to provide more details otherwise this might get looked at as a scam.

The way BP comunity works is to build credibility over time through your interactions. Also you might want to complete your profile: right now it only says you are a RE professional and you are looking for money.

I would say on a duplex it depends on the windows. If they are modern and the rest of the home is nice it will probably not make a much difference.

On a SFR it will impair the use of the yard space in the summer, that will put you in the same category as a corner lot.

IMO a lot of major inner city roads are equal or worse than a freeway, because of ambulance and police cars, accelerating traffic and the occasional nonsense souped up car.

I down own a property on a major street, so this is just my humble opinion.

@Nick L. I would put less weight on school district for 1 BR and 2BR - your target audience will not be a family with kids in school age, maybe a baby.

Approach it from the other side: how much is your target audience bringing home net every month? You can probably get 25-35% of that for rent. That's the affordability. The other side is how much they like it. I am a firm believer that people are willing to pay a little more rent every month for a nice place as long as it is within their means. That factors in the curb appeal, the neighborhood and certainly the finishes, especially bath and kitchen. Your tenants are going through the same thought process as you would when they are shopping for a place - how much can I spend and how much do I like one place over another.  So to answer your question I think you can get $700 for a 2BR if you are able to provide a good value for the money.

@Nick L. that's always a crap shoot. The school district is a plus, but a mom's instinct when picking out a home will be more based on the "feel" of the area. Proximity to shopping is overrated - people don't care, anything further than walking distance doesn't count. Once you get in the car you drive anyway. My two cents: treat it like Milwaukee and run the numbers accordingly. If it meet's you requirements this way, you have a little upside potential.

@Samantha Klein well, it's a plan and it's not impossible generally speaking, but like General Schwarzkopf used to say: no battle plan survices contact with the enemey.

A few things will look different in reality: your acquisition cost seems very low, I'd budget maybe 120k. Even then only in top downtown locations you will be able to get $1300 in rent. typically its more like $800-900. Don't forget repairs, expenses and vacancies.

My advise: dont analyse this to death, go buy number one, see how you like landlording, learn from it and adjust your plan accordingly.  

@Michael Madden were you able to close the deal?

@Christopher Patterson congratulations and welcome on board! I have heard good things about the Madison REIA and definitley a place to be for you. REIAs are great, not only you can meet a lot of like minded people and get a wealth of ideas, I always found the meetings very insprining. Just be mindful, there are also a lot of people with their own agenda. If you have a deal under contract definitley post the details here on BP and have it hacked apart - best protection against a lemon deal.