All Forum Posts by: Brandon V.

@Donald D Michna

I would love to get coffee sometime, just let me know.

@Cliff Harrison

I agree here are the numbers monthly:

Purchase Price = $105,000

Downpayment and closing costs = 28,500

Repair Budget = $3,500

Loan for Downpayment = $20,000

My total Investment = 12,000

Income: $800/unit = $1,600

Expenses:

Taxes: $255

Insurance: $100

Vacancy: $80

Repairs: $50

Cap Ex: $125

Water, Sewer: $75

Loan Interest: $100

Total Expense: $785

Mortgage: $450

Cashflow: $365

@Kelly N. @Dan C. @Marcus Auerbach

Thanks everyone for the input.  I am going to go ahead and put in another set of washer and dryer down there and make sure the hook ups and power are correct and set up properly for each unit.  Thanks again! 

Hi BP,

I received a text today from my lower tenant in my duplex with a question about the washer and dryer that I had not thought about.  The washer is currently plugged into an outlet that was previously labeled "Upper Unit" and there are several other outlets labeled this and other that are labeled "Lower Unit".  She is wondering what to do since she only wants to use the washer and dryer that are connected to her billed services.  Would it just be reasonable to ask her to replug the washer and dryer into her "Lower Unit" outlets every time she uses the laundry?  I was thinking about splitting the washer going to the upper and the dryer going to the lower but I heard that the dryer takes up much more electricity than the washer.  Any recommendations?  Thanks.  This is a duplex in West Allis, WI.  

Brandon

Milwaukee Wisconsin

@Avi Garg

West Allis

Thanks everyone! 

Hi BP!

I just wanted to share my first rental story from Milwaukee, WI. 

I found bigger pockets about 6 months ago right after I bought my first real estate property that is currently my primary residence.  Luckily I was a good negotiator and didn't find too bad of a deal for not really knowing anything about real estate other than wanting to build equity and stop wasting money paying rent.  Then I found BP and immediately started reading and learning about how to jump in.  My biggest fear was finding tenants and not having the experience needed.  After searching the forums for awhile I decided to start my venture into house hacking.  I posted up an ad on Craigslist and to my surprise had 10 hits within four hours for renting out the second bedroom in my condo.  I found my current roommate and we get along great and I was successfully house hacking and hooked....

After that I spent the next three months looking up deals and analyzing them every single day and going to the webinars, and listening to podcasts and reading books. As I was gaining knowledge I ran into several roadblocks. The first roadblock was finding the right bank as my lender with my condo was requiring 20% down for a SFH and 30% for anything else. After searching out a couple of options I found one that was fairly cheap with closing costs and only required 25% down. The next roadblock was finding funding as I just purchased my condo and didn't have a lot left to put down. I was able to convince some of my family members to give me a loan that the bank accepted as part of a down payment for an investment property. Then I finally found the right deal. I must have analyzed it ten times and looked it over twice. It was a duplex that needed a little bit of work but nothing I couldn't manage while working full time. It had inherited tenants in the upper unit that had lower market rents (and we all know the pros and cons of that). We finally reached an accepted offer and immediately the upper tenants decided to move out. I managed to close on the deal one month ago and was able to get the renovations done for the lower unit and rent it out on Feb 1st with a great tenant. I just put out an ad for the upper unit at the current market rate and have many applicants lined up with the ad being one day old.

Overall the property I bought was $105,000, I have about $12,000 invested in it and it rents for $1,600 a month (or will soon). My estimated CF is around $300 a month giving me about a 30% COCR and I am truly excited and pumped to be apart of the community and look forward to more deals down the road!

Hi Everyone,

Here's what ended up happening for those who read:

Since the duplex was on the market for awhile I did go with the 1,500 credit and the seller had no issues with that.  Looking back, I probably could have got more due to him wanting to sell with a tenant, and since the tenant was moving out, he would have been more motivated to sell due to lack of rental income. 

As far as the tenant, she legally has the place until December 31st so I ended up changing the closing date from December 30 to January 15.  This way I can be sure that it will be clean, there will be no problems from the inherited tenant, and it will give me 15 days to fill the units by Feb 1st or wait until March 1st, the day of my first mortgage payment.  This also gives me a better time to fill the units since Feb, and March are a little better than January. 

Thanks.

Brandon

Hi Everyone,

Inspection

I just had my inspection done for my first long term rental, it's an upper and lower duplex and here are the noteworthy items:

1. Minor water damage on the lower unit bathroom coming from the upper bathroom when the tenants get out of the shower and the water runs down.

2. Two beams in the basement have some frays across where they sealed some asbestos and the inspector said that it would need to be sealed again with a asbestos contractor.

3. Furnaces are a little older than I expected, I was thinking about 10 years old and they are actually about 17 year old, but they have been well maintained.

4. Roof has little damage but it is 18 years old and the inspector thinks it has about 5-7 years left.

5. Other minor items per usual. 

This place will cashflow about 300 per month and I have budgeted about 7000 in repairs and it would still be giving me a 15% COCR. Would you change the offer at all based on these findings? I'm leaning towards a $2,000 closing cost credit or price reduction? Does that seem reasonable?

Inherited Tenant

When I first offered to buy the duplex there was an inherited tenant living in one of the units and they were on board with staying.  A week later she told the current seller that she would be moving and she expected to move on January 7th.  We intend on closing on December 30th at the end of the year for the tax benefits.  They are on a month to month lease right now and ideally I would want the tenant cleared out and the unit cleaned by December 30th.  How would you go about negotiating that?

Thanks everyone!

Brandon

@Jason Bott Thanks, that's what I had figured as well so I'm guessing this agent really doesn't know what he is talking about or just estimated way off.  I'll see when he runs the numbers but I'll continue to shop around for now.  He was also referred to me as well...

Hi All,

Just got off the phone with an insurance agent and he did not really clear things up as to what I will need for landlord insurance.  The property I am considering built around 1920's, in a B- area, has a roof that's 15 years old, around 1800 sq ft, is a duplex with no real major problems to the building, porch, electric, railings, etc.  The property is around 140k and the agent was going to run the numbers exactly but from doing this "all the time" he estimated that it would be 1400-1500 a year for coverage.  Does this sound remotely close?  If some that does eat into my cashflow as I was expecting a monthly cost around 60 not 125.  He mentioned several types of insurance including a 300k liability coverage and maybe adding on an umbrella package in addition to that 1500.  So I guess I'm just confused as to what to get and the relative cost associated with it.  Thanks.

Brandon