All Forum Posts by: Andy LaVoy

1) If you’re 28 you get to make your own choices. Love your family but ask them to respect your decisions as an adult. They might still not, and that’s okay.

2) College kids in a large college town are probably some of the worst tenants in all of REI. Learn from that mistake and buy in a better neighborhood and do a good job screening your tenants to set yourself up for success.

3) Find a 4 unit in a class B/C neighborhood and FHA it if you can. You get to live for free and keep tight watch on your tenants, make relationships with them and lead by example in how to treat the property, and living onsite makes maintenance easier. You'll learn a ton this way.

4) If you're not attending a regular BP or REIA meetup, start. Surround yourself with other successful investors who know how to solve the problems you'll inevitably encounter.

5) Have fun! What a great opportunity you have to improve your life together with your spouse. You’re in for a hell of a ride!

@Dave Foster Thanks! I appreciate the advice. You're saying conventional fees are higher, so in the short term, a higher rate commercial loan would make more sense? Am I understanding that correctly?

I'm considering buying a portfolio of 7 SFHs, and the seller wants the transaction to make a 1031 exchange so he can buy something larger. Can I split the portfolio up into 7 transactions so I can get 7 individual conventional notes, or will I need to get a commercial loan to keep it as a single transaction? I'd prefer to go with a Fannie loan to get a better rate, lower down payment, and longer term, but I'm open to creative solutions too. Thanks!

I can't make it tonight, but I'd love to make it out next week. Same time and place?

@Chase Binnie Thanks for that! Where can I find more info about the Wednesday evening meetup?

Can BRRRR be done in Madison anymore? It seems to me the market is too overpriced and the cost and timelines of contractors would make it too slow and unreliable on the Rehab, but I'd love to hear a counter argument. Maybe you just need a higher budget? To buy off market? Have a great set of contractors?

@Keith Schulz @Andy Crooks I hear you both suggesting to exercise caution about doing a big build out in MH, so maybe I should focus on something a little more straight forward right now. How would someone who's pretty green go about finding good deals off-market in the Madison area?

@Kelly DeWinter Thats great advice. Do you know how long I have to go after that tenant? They rented under an LLC which I'm unsure if they have any assets anymore. They've been doing a shuffle of their funds between holding companies and just walked out on our lease. I'd love to go after them, but I don't want to waste money if it's futile.

I had an eviction 2 in a commercial space ($900/mo) followed by about 6 months of vacancy. That really hurt, and I was desperate to get a new tenant in, so I rented to them on a 1 year deal for $600/mo while they tried to start up a new business in the space. It probably wasn't my best decision, but this is my first property. The new tenant has been great, and I'd love to have their new business thrive, but I can't help but feel that $300 missing every month. He took me up on the $600 rent immediately and even offered to pay our shared trash bill, so I think he knows he's renting under market. What do you suggest for trying to renew him at a higher rate for next year? 

Hi All,

My name is Andy and I'm a relatively new investor in Madison, WI. 

I cut my teeth on my first purchase in 2017, a one mixed building with 2 commercial tenants and 2 residential tenants. I had an eviction in my second month of ownership, which cost me a good chunk of my reserve fund with legal fees and vacancy. It's now rented again and I'm in the process of rehabbing the upstairs warehouse space into 2 residential units. Also, I had a building heater go out in January which set me back a couple grand. This first project has been awfully difficult motivationally, but I feel the cruising point is near, and it should cash flow well at that point.

All that to say, I haven't given up but I'm thinking about my second investment. My background is in software, and that's how I plan on funding my projects. My goal is to build out a cash flowing portfolio that can replace my income, but I'm really struggling with what to take on next. There's a lot of advice about how to do a specific type of deal, but how do you pick which type of deal works for you? It seems like buying multi-unit residential is how many people start, so I guess that's where I'm at now. The Madison market is white hot, so I'm considering shopping in more rural areas around Dane County where I can get in at a lower price. I'm also considering buying some land in Mount Horeb and building a 6/8 unit apartment there. I'm not really sure how to go about financing a land buy + complete build, and I don't know how to find a contractor to do the architecture and build, but I'd love some advice on that. 

I'm considering getting my RE License for access to the MLS, to write my own contracts, and just to learn more in general about the industry. I also want to grow my network, I'd love to learn from other successful investors in the area. I'm a math nerd and love to run numbers, I really just don't know where to look for or how to apply the math across an entire industry (there are so many ways to go, something I love about REI is that creativity can win). I think I could be valuable to someone locally helping build out software for analyzing projects, I do have some of my own money to invest, and I'd be happy to do grunt work while I learn.

Happy to chat with anyone willing to give advice and I appreciate your time,

Andy