All Forum Posts by: Douglass Belt

Welcome and congrats on your success this early in your career! I agree with @Brie Schmidt, contact @Nicole Pettis as she runs the local BP group and would be a great resource for you!

Doug

thanks everyone for the feedback. I agree and makes me a little nervous about cash flow when thinking abour the 50% rule. This feedback helps me get some confidence on my analyzing capabilities. 

Duplex for sale $220K, each unit is 2Br, 1 bath. $1100/month per unit. Taxes $5600/year. As I understand it, this would fit the 1% rule, however, not sure if the numbers work. 

• assuming 30 year mortgage @ 4% PITI =$1589/month. Tenant to pay utilities, trash, lawn/snow removal.
• Principle= $302/month
• Interest =$696/month
• Taxes & Insurance =$592/month

looks like $2,200-$1,589= $600/month in cash flow.

Yearly capex needed $2,000 according to owner. All mechanicals, roof, etc are less than 5 years old. 2 gas ranges and washer/dryer may need to be replaced in next 5 years.

Easy to rent as close to capital, university, etc.

What do you think? Also, I am sure I may be missing some information, so please let me know. This is the first analysis I have posted. THanks!

I agree with all the posters comments and suggestions. When I had an early (and mind you did not tell me he was moving out until I stopped by to find an vacant house!) departure, I signed the new tenant to a 5 month lease, so that it ended in the June. My thinking was if they stayed on, I am right back on track with the high time for "rental season." She ended up staying and has been there for 4 years now. Be flexible but stick to your rules. Again, this is a business and need to treat it as such. Based on your high praise of the tenants, they should understand.

Liberty Mutual Insurance has been great! Good service and reps that actually take the time to explain the coverages and make sure you are covered properly. Not the cheapest but by far the best value out there. Make sure you ask for a "Landlord" policy or a policy that covers the dwelling vs. Home Insurance. I have been improperly covered by my agent for years before switching to Liberty Mutual and having my agent explain that!!! Dont go with the cheapest is my recommendation. No savings is worth a claim or loss when it comes to tenants!

Hi Tanya,

Thank you for your response! I appreciate you sharing your experience with me. As I have been looking around, it seems that SFH may work better-numbers wise, than multi units. It is not the direction I want to go but may have to. I like Duplexes because it gives you some more security with vacancies, cash flow potential, and I feel a little easier to sell than a 3, 4, 5+ unit building but not as easy as a SFH. Somewhere in the middle....thoughts?

Until he retired, I was in regular contact with Steve Brown, and also familiar with the owner of J. Michael Real Estate.

Hi Zachariah,

Thank you for the response! It sounds like you are off to a great start and have a good idea of things around here. I am looking as a Buy & Hold exclusively. I currently own a SFH in MN but looking to break into the Madison Market. I have owned the SFH for about 10 years and moved to Madison 7 years ago. It seems that SFH here in Madison may work better for numbers and cash flow. Not the direction I want to go but may have to until, or if, things change. What do you think?

I am looking for some advice from anyone who has invested in the Madison market. I have lived here for about 7 years and notice that prices for 2+ units are high and very hard to find deals where the numbers make sense. Is there anyone out there who has had success investing in the Madison area on a smaller multi-unit level that would be willing to share their stories, advice, success/failures with me? Are there any areas on the outskirts of Madison anyone has had sucess in (Verona, Janesville, deForest, etc.)? It seems like only SFH are where numbers make sense but not interested in going that route.

 I know some of the larger apartment building owners in the city but they are at whole other level when it comes to advice so looking for someone on a level of 2-12 unit experience. thanks!!

@Kyle Hipp 

- thanks that is good information and that helps. I should have clarified that my property is actually in MN not WI. Like some of you have said, there is no way to protect yoruself frome very posible situation or hazard but the feedback I am getting makes me realize I need to continue to anaylize and improve on my lease yearly-which I will make a part of my process moving forward.

thanks for all the good advice and responses. I will continue to look for resources on this and have a 3rd party look at my lease.