All Forum Posts by: Benjamin Beyer

I always keep a reserve for a large repair (like a boiler) and a couple months rent. My property is in good condition and I thoroughly screen my tenants so its probably more conservative than I need to be, but it helps me sleep at night. It depends on how consistent your other income (W-2 or self-employed) is, what kind of tenants you have, the condition of the properties and how risky your feeling. I'm conservative with real estate investments and risky with other investments. Hope that helps.

@Nicholas Pritzl, 

I second everything that @Marcus Auerbach said. VA loans are less attractive to sellers with multiple offers and most fourplexes in Milwaukee were built as affordable housing. That being said, if I could go back to when I used my VA loan in 2018, I would buy a fourplex and not a duplex. You can find fourplexes in nicer areas that rent for just as much as duplexes. Find yourself a knowledgeable real estate agent who knows what areas are up and coming and how to get the most out of your VA loan.

Short answer is "it depends". MKE has lots of different micro markets through the metro area. In nicer areas you'll be lucky to get a 1% rent to price ratio. In not so nicer areas you can easily find 1.5-2%. The rule of thumb I used when I started investing in the MKE area was $500 of cash-flow for a $150,000 property. So if you put 25% down on that $150,000 property or $37500 that's a 16% Cash on Cash (CoC) Return. Hope that helps.

Alan,

The MKE market is hot right now and has been all summer. It's a sellers market. With that being said I'd recommend you buy now anyways. Barring a completely atrocious deal, you will come out ahead when you're living rent-free in a cash-flowing house-hack. Rent is expensive in MKE.

The inherited tenants could be an issue, but it doesn't have to be. Since you are going to be house-hacking the place you will get a good feel for who your tenants are as people pretty quickly. Read through the current leases and understand the terms. Also, just talk to them and try to understand any issue they have with the house. Everyone appreciates being heard. As a landlord you are in the service industry as well as the real estate industry. I also would try to get the previous owners rent roll or payment record to try and identify tenants that may be problem-childs or have habits of late payments. Lastly, in Brandon Turner's book on managing rental properties he talks about sending the current tenants a letter or email explaining who you are and how you run your company. I would highly recommend this as well. Start out on the right foot from day one. Also, read that book if you haven't.

On street parking is very common for Milwaukee and unless you live downtown it really isn't all that bad, just inconvenient. 

Prior to the inspection, I would go on the county website (https://lio.milwaukeecountywi....) and check out what kind of permits were pulled on the property and the county records. Just type the address in and click on the Assessment Info. Then click on the tax key and permit info. Knowing what permits were pulled and the property record has a few advantages. First, you can see what work was down on the property and who did it. Knowing what companies worked on your property can give you an idea of the quality of work. Are the contractors still in business? What do their reviews say? What are their ratings on the BBB? Make note of all of this and have your friend look at them during your inspection. If everything looks kosher, you just found yourself a contractor you can use on your property in the future. Second, during your inspection make note of anything that has been updated but didn't have permits pulled for the work. If the electrical boxes or plumbing look updated but no permit was pulled this is a huge red flag. Electrical fires caused by incorrect wiring are not covered by insurance so this could be a serious problem. Most of the time its just small things though, like a fence or retaining wall. It helps to have a good understand what work requires permits in Milwaukee. This can be found on the county website as well. Finally, when you pull the records you can see what kind of citations were issued on your property and how the previous landlord ran things. If they tons of citations for bushes over-growing into the alley or sidewalk you can guess they were pretty hands off and maybe didn't give the property the attention it needed. 

For the inspection I would just use this post (https://www.biggerpockets.com/...) by Mindy Jensen as a checklist as you go through. Be very thorough.

Buying your first investment property is an exciting time and a great step towards wealth. Feel free to PM if you have more questions about the home buying process or personal finance ($17k in Bitcoin?!?! I get the feeling you love volatility lol) Good luck and happy investing!

Milwaukee (MKE) is very diverse. Some areas are family oriented and some are more for young professionals. MKE is well-known in the Midwest for a good nightlife, bars and breweries, which is why it is nicknamed, "Brew City". Prices in MKE are just as diverse from 100K all the way up to 400K for a multifamily. I would suggest finding a local real estate professional to assist you in your search.

Hi BP Nation,

Has anyone (especially professional property managers) taken the time to get a CPM? I'm a big fan of education and I might be able to get the course paid for by my employer, but I want to make sure I'm not wasting my time. I would like to start a property management company someday. Is this certificate useful? Did you learn a lot when you took the course?

Thanks in advanced!

Hi BP Nation,

Recently, I got my real estate license. I see some of the other realtors with different designations and certifications, like Accredited Buyer's Representative (ABR) or Certified Residential Specialist (CRS). I wondering what's the first or the best designations and certifications for newer agents to start working towards.

Thanks in advance!

@Marcus Auerbach

Very well put.

Hey BP Nation,

Has anyone done a lease signing via Zoom or use Docusign? This is my first new lease since COVID. I’m curious what people’s experiences with this software for this specific application.

Thanks!

Hi BP Nation,

I am currently house hacking a two-family home in Milwaukee, WI. I've been making updates throughout the property as needed and one of the things I noticed is that all the outlets upstairs are "three prone outlets" (Like the ones you'd see in a modern house), while all the outlets down stairs are two prone outlets. I am wondering if anyone has see this before and knows why that would be. 

Also, do anyone know how I would update the downstairs outlets? Is this a project I could handle? I've replaced outlets before but do I need to run wire to do this update?

Thanks!