All Forum Posts by: Charles Clark

@Larry Williams

Welcome real estate investing, landlord addition. Hire a lawyer. I found one in my market for $400 to handle everything. I am sure you can find one in your market.

Have everything in order. You need to have the lease, and please send your 14 day in certified mail. Do not give it in person. It is your word against theirs. Do not collect rent from the tenant. If you collect rent, then you are technically working with them so the judge will tell you to continue to do so. Once you send a notice, don’t send another one. It will start the timeline all over. For example, you give 14 day notice this month, then you give 5 day notice next month. The court will go off the 5 day notice.

Again, hire a lawyer that just do evictions and save yourself time and money. I tried to do it myself and it cost me over $2k to finally get the tenant out. Learn from my mistake and hire a lawyer. You can’t afford not to have one on your real estate team.

Beleza,

Charles Anthony

@Dwight Cook

I like MTM when taking over a property. It allows the freedom to cut ties if you don’t fit with the current tenants. In my market you just have to give a 30 day notice. When I sign a new lease, I also like MTM, because it is a new relationship and you want to figure out if you both are a good fit. Once you both accept that you are a good fit, then I sign a year lease.

Hope that helps with your direction.

Beleza,

Charles Anthony

@Dwight Cook

I hope all is well with you.

I was in your situation in 2019 when I purchase my first rental property, which was a four unit. When I took it over the rents were $575, in a market where rents are $750.

When I took over, I improved anything that I could in those first 60-90 days. After that, I gave a 60 day notice to the tenants that were on MTM leases. This allowed me to increase rent and keep my current tenants. However, this cause tenants to recognize that I was not going to be like the last landlord which caused some tension, but they did stay. After the first year, I decided to raise rents another $50, and one tenant put in their notice to vacant while the other 3 stayed. I was able to turn that apartment and raise rents to $750. Then another tenant put in their notice and then I was able to do the same to that apartment.

This year I was able to finish the third apartment to raise rents to $750, but then I decided to put it on the market. I should it for almost $100k more than what I brought. I put about $30k in total into the property and walked away with $76k before taxes. Turn around and purchase a five unit.

I say, take your time unless you have the cash to turn the apartment to make it worth $750. If you have tenants that have been in placed for 5+ years then the apartment is out of date. So improve the property where you can so tenants know you are different than the previous owner.

Feel free to contact me if you want to chat.

Beleza,

Charles Anthony

@Cam Flowers

Roberto is the GC. Contact me and I will give you his info.

Investment Info:

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

Purchase price: $199,900
Cash invested: $25,000
Sale price: $288,000

First completed deal from analyzing to purchasing the property to adding value to selling for a profit.
I purchased the property using a FHA, and put less than $6k as a down payment. Rents where $575/ea, mn income = $2300, debt service w/ expenses = roughly $1600. W/in 90 days, increase rents to $625 ($50 increase).

Renovated 3 units to increase rents to $750/unit. Each renovation ran between $4-$6k with a total of $18+k

ROI: ($76,000-$25,000)/$25,000 = 204%

Beleza!!

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

It fit my strategy of using my FHA and knowing there was room to raise rents after renovation of units. The strategy was to buy and hold for the next 10 years. My goal was to refinance in 2022, but the market jumped 44% since I purchased the property.

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

I found the deal on the MLS. The price was right for the amount of rents that were being received and the possible growth of rents in the area.

How did you finance this deal?

FHA loan. I was able to get the loan but did not have the down payment. Received down payment and initial funds from outside investors.

How did you add value to the deal?

Found the deal, manage the property, and used investor funds to improve apartments and building.

What was the outcome?

Original purchase price: $199k

Down payment: $6k
Investment: $19k
Total Investment: $25k

NOI (11/2019 - 09/2021): $9k
Sales Proceeds: $67k
Total NOI: $76k

ROI: ($76,000-$25,000)/$25,000 = 204%

Now, I am using this return to invest in a bigger project. I went from 4 units to 14 units in under 2 years. Pick a strategy, analyze properties, talk to everyone you know about real estate, and pull the trigger when you find something that makes sense to you.

Lessons learned? Challenges?

Lessons learned is that you have to pull the trigger when you find something that meets your standards. And problems are going to happen no matter how much you prepare and you have accept it. It is the person who deals with problems who gets to dictate their income.

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

I was the listing agent on the deal. Carly Stack was the buyer's agent and did an amazing job communicating.

Investment Info:

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

Purchase price: $199,900
Cash invested: $25,000
Sale price: $288,000

First completed deal from analyzing to purchasing the property to adding value to selling for a profit.
I purchased the property using a FHA, and put less than $6k as a down payment. Rents where $575/ea, mn income = $2300, debt service w/ expenses = roughly $1600. W/in 90 days, increase rents to $625 ($50 increase).

Renovated 3 units to increase rents to $750/unit. Each renovation ran between $4-$6k with a total of $18+k

ROI: ($76,000-$25,000)/$25,000 = 204%

Lets talk strategy. Beleza!!

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

It fit my strategy of using my FHA and knowing there was room to raise rents after renovation of units. The strategy was to buy and hold for the next 10 years. My goal was to refinance in 2022, but the market jumped 44% since I purchased the property.

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

I found the deal on the MLS. The price was right for the amount of rents that were being received and the possible growth of rents in the area.

How did you finance this deal?

FHA loan. I was able to get the loan but did not have the down payment. Received down payment and initial funds from outside investors.

How did you add value to the deal?

Found the deal, manage the property, and used investor funds to improve apartments and building.

What was the outcome?

Original purchase price: $199k
Down payment: $6k
Investment: $19k
NOI (11/2019 - 09/2021): $9k
Sales Proceeds: $67k
Total Investment: $25k
Total NOI: $76k

ROI: ($76,000-$25,000)/$25,000 = 204%

Now, I am using this return to invest in a bigger project. I went from 4 units to 14 units in under 2 years. Pick a strategy, analyze properties, talk to everyone you know about real estate, and pull the trigger when you find something that makes sense to you.

Lessons learned? Challenges?

Lessons learned is that you have to pull the trigger when you find something that meets your standards. And problems are going to happen no matter how much you prepare and you have accept it. It is the person who deals with problems who gets to dictate their income.

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

I was the listing agent on the deal. Carly Stack was the buyer's agent and did an amazing job communicating.

Investment Info:

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

Purchase price: $199,900
Cash invested: $25,000
Sale price: $288,000

First completed deal from analyzing to purchasing the property to adding value to selling for a profit. The strategy was to buy and hold for the next 10 years. My goal was to refinance in 2022, but the market jumped 44% since I purchased the property.

I purchased the property using a FHA, and put less than $6k as a down payment. Rents where $575 each, so monthly income was $2300, while debt service with expenses where roughly $1600 a month. Within 90 days of purchasing the property I was able to increase rents to $625 ($50 increase) each due to improvements made to the common area, landscaping, and any upgrades we could make while having 100% occupancy.

As tenants moved out, I was able to renovate 3 of the 4 units to ask and receive $750 an unit. Each renovation project ran between $4-$6k with a total of $18+k of improvements.

Original purchase price: $199k
Down payment: $6k
Investment: $19k
NOI (11/2019 - 09/2021): $9k
Sales Proceeds: $67k
Total Investment: $25k
Total NOI: $76k

ROI: ($76,000-$25,000)/$25,000 = 204%

Now, I am using this return to invest in a bigger project. I went from 4 units to 14 units in under 2 years. Pick a strategy, analyze properties, talk to everyone you know about real estate, and pull the trigger when you find something that makes sense to you.

Please reach out if you want to talk about strategy and how to act on your strategy.

Beleza!!!!

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

It fit my strategy of using my FHA and knowing there was room to raise rents after renovation of units.

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

I found the deal on the MLS. The price was right for the amount of rents that were being received and the possible growth of rents in the area.

How did you finance this deal?

FHA loan. I was able to get the loan but did not have the down payment. Received down payment and initial funds from outside investors.

How did you add value to the deal?

Found the deal, manage the property, and used investor funds to improve apartments and building.

What was the outcome?

Original purchase price: $199k
Down payment: $6k
Investment: $19k
NOI (11/2019 - 09/2021): $9k
Sales Proceeds: $67k
Total Investment: $25k
Total NOI: $76k

ROI: ($76,000-$25,000)/$25,000 = 204%

Lessons learned? Challenges?

Lessons learned is that you have to pull the trigger when you find something that meets your standards. And problems are going to happen no matter how much you prepare and you have accept it. It is the person who deals with problems who gets to dictate their income.

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

I was the listing agent on the deal. Carly Stack was the buyer's agent and did an amazing job communicating.

@John Buffet

Great question and congratulations on moving towards your goal of buying an investment for your future.

First, if you choose to go with the FHA, you will limit your options. You will have to stay in the home for at least a year. So, technically you only have one option.

Second, if you are planning to purchase more investments beyond this one, I suggest purchasing a four unit if you can. More bang for your buck. I did this and that decision put me well ahead of the game. Now, I have 14 units in less than 2 years.

If you plan to just have a few properties then go with a duplex. It will be less of a down payment and less stress managing tenants. Buying a single family, is creating a liability and will make it harder to save for the next property. The true house hack is getting as many units with one loan. With a residential loan you can get up to four.

I hope that helps.

Obrigado,

Charles Anthony

@Nathan Barshinger

Milwaukee is a city that you can not put it in one category or box. Just like most markets if you run the numbers for a property and it works for you, then I would say, “you can find cash flowing deals in Milwaukee”.

Putting a team together to ensure you have the resources to accomplish your RE investment goal is the most important move for you to make if you want to invest in this city. Go Bucks!!!

@Brittany Stradling I hope all is well with you. 

I agree with a lot of what people are saying that there are multiple ways to accomplish what you are talking about. Slow and steady can multiple on you quickly if you are able to take advantage of the market. I was able to own and manage 14 units in a year and half because I used my resources around me and different financing methods. I brought my first property in Oct 2019 with a $10k investment from family and purchased a four unit. After having a conversation with my fiancé (girlfriend at the time) about her condo and equity, she realized she could refi her condo and pulled money out for a down payment to purchase a duplex. Finally in Oct 2020, we were able to get a commercial loan for an eight unit priced at $245k that was bringing in $4k a month, and our mortgage is $946 a month. The property was cashing flowing but needs some work. 

Because of this last purchased and the cash flow that is coming in, I was able to walk away from my 9to5 and focus on my RE career while purchasing more investment properties. Getting my real estate license made this choice easier, because with my license it becomes another income stream to use for my investments and paying for everyday life. Even though I was able to own and manage 14 units in under 2 years, it took a lot of preparation to be ready to jump on an opportunity when it presents itself. I analyzed properties almost 6 months straight before I had the money, loan approval, and the right property to close on my first deal. As in most places, Milwaukee, WI (where I have all my investments) has gems if you are willing to invest in areas where others might not want to invest. 

With you have the high-paying job as a resource, you could hire someone or get a trusted partner who can do the leg work of finding the property and running the analysis while you provide the capital for the deal. This will give you the leverage to scale, if that is what you are trying to do. With your access to a high paying job, you could find other people in your circle who want to invest and then you have your next deal with their money. The key to growing and scaling is OPM. Other People's Money. It is the only way to scale and to grow your business. Just like businesses use the stock market (OPM) to invest, you have to use the bank and other investors (OPM) to grow your RE portfolio.

I would like to finish off by saying, that being able to build a trusted partnership is the most effective way of growing quickly. I was able to get to 14 units because I partner with people close to me that had resources I didn't. I did not use any of my own money to close on any of my deals. I used OPM, but I had the knowledge and skills to put the deals together. Use your resources (your money) until you can use OPM to scale. I hope this helps you on your RE journey.