All Forum Posts by: Anthony Vaiana

Investment Info:

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

Purchase price: $185,000
Cash invested: $15,000

2/1 townhome duplex. 1,100SF main levels with separate finished basements. Larger unit has an additional room and full bath in basement. Purchased as my first house hack in which I have occupied both sides while rehabbing the other to maximize rent potential.

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

I decided to a house hack would be my best way to get started in real estate, while subsidizing my housing expense. Coming from a larger luxury apartment downtown, I was picky on where I lived. Being a side by side and not having neighbors walking around above me, or having a separate basement which I don't have to cross paths with my tenant in the other unit definitely made this property very appealing.

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

Found this property on the MLS. It was in an area outside of where I was targeting. After my GF sent it to me asking I go check it out, I went to view it and put an offer in same day. It was a lot larger than in the photos and is practically like living in a single family home, with one common wall.

How did you finance this deal?

I financed this deal using a 30 year FHA loan and 3.5% down. With closing costs after credits, cash to close was a little above $10k.

How did you add value to the deal?

I added value wit a mix of DIY work and hiring a contractor on one side. New bathrooms, exterior doors and flooring in both units. Unit 1: a contractor was hired to refinish hardwood and paint whole unit, along with some misc work. Unit 2: I installed new interior doors, trim, fixtures, paint on main level and basement. I also hired a company to replace basement carpet. All rehab costs were covered with rent paid, and I have not invest anymore personal money since owning.

What was the outcome?

After rehabbing the units I was able to bring rent up from $850/unit, to $1,250 and $1,350 totaling $2,600 in income. I still occupy larger unit and pay myself $1,100 to my business, but will rent for the $1,350 once I leave. I also use RUBS to split water/sewer with tenants, vs paying as previous owner had. I recently refinanced from a 5% IR to a 2.75% IR. After mortgage is paid property will bring in $1,256/mo. My pro forma after expenses and potential future PM is $430/mo (28% CoC Return).

Lessons learned? Challenges?

I have learned not to buy another property without reserves, as early on was stressful paying for rehab and initial repairs. Buying a property with inherited tenants can be a headache but there is always a solution. Lucky for me a tenant I inherited was able to find a home to buy after giving her notice to vacate, as she was having trouble finding a place to rent with 4 dogs. Having a formal application process avoided having a possible "professional" tenant move in as well.

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

I worked with Cierra Burmeister of Shorewest here in Milwaukee, who was a wealth of knowledge for my first purchase. She coached me through the process from start to finish and I owe a lot to her. Jamison Kaul with Fairway Mortgage also helped secure the deal and walked me through many different finance scenarios to get me the best options. Consistent follow ups and direction made my first purchase seem like it was on autopilot. Couldn't thank them enough.

I purchased my first property last May here in Milwaukee, WI. I used a 3.5% down FHA loan to purchase a large side by side duplex, 2 bedroom 1 bath with separate full finished basements for $185k, in which I owner Occupy. PITI is $1,540/mo with PMI. I initially had to deal with Inherited tenants who were paying $850/mo each, and gave me all sorts of problems to start. It was not a pleasant experience...

But after getting them both out a few months later, I invested around $8k to do some minor rehab. Rented out one side for $1,250/mo and live in the other side and pay myself $1,100 rent to my LLC. Cash flow is about $360/mo, counting myself as a tent. From an owner occupy standpoint, I'm living here for less than $300/mo. One thing I wish I knew was properly estimating rehab costs before, rather than discovering things I needed to do as I went along. But to me it wasn't anything I could fully grasp without pulling the trigger and learning first hand. Second property went way smoother now knowing what to look for.

Hey Scott,

Sorry for late reply. Finding a good agent and property manager will be key to investing from a distance. Luckily your in the right place to find some on BP! As far as where to look, depends on what you are looking for. Washington heights, particularly near north ave and Wauwatosa, has become quite pricey but is a hotter area. River West & Bay view are very popular areas but also pricey. For decent cash flow in C neighborhoods I like Capitol heights, St Josephs neighborhood, West Allis, Dineen Park, Arlington Gardens. I have a duplex in Nash Park and currently searching for a 4 family. 

@Scott Pass

Welcome to the site! Im in Milwaukee and would be happy to answer any questions you have about an area. A lot of Milwaukee property’s are old, and there are a lot of areas that can be headaches. But definitely have able to get some good cash flow compared to some other markets. Milwaukee def is becoming an attractive place though, and downtown has become an awesome place for entertainment.

I moved from Chicago, along with a lot of people I have met who have done the same. Lower cost of living and feels like a mini version of Chicago in a way.

@Dawn A.

Thanks for adding me to the list for last nights meetup! Was nice meeting you and some good info and takeaways from the event.

@Willard Blair

I use cozy and like it a lot. My tenants also love it for ease of use. They can setup direct deposit, and submit documents like renters insurance virtually if that’s something you require. As a landlord you can add automatic late fees and utility charges as well. Would def recommend for a free, simple app. Payments do take 6 days to be deposited to your account unless you pay for expedited service.

@Stephen Glover

Awesome outcome man!! Way to believe in your ARV, and challenge the appraisal you knew was low. 👍🏼

@Brent Watanabe

I would say west of 43, from north up to Capitol. Between 8th and 35th. Area west of highway next to bay view is also lower income.

@Daniel Lynch

Literally just had this convo last month with my girl. She was upset that I asked her to pay for a property I own, cause I’m making money off her is what she said. I explained that I am paying rent to my business account same as I would charge anyone else, because that’s what this is. She couldn’t get a free ride anywhere else. Why should she with me just cause we’re dating. I told her there is a cost of living and if your living with me your chipping in. We agreed she would pay a couple hundred a month (which just almost covers utilities). She paid more in college to live with 4 roommates in a trashy house...

@Dawn A.

Awesome, thanks Dawn! And I’ll see you there