All Forum Posts by: Colin Merrill

@Jennifer Schelkopf

It definitely was weird but nope, these are in blue collar suburbs of Milwaukee Wisconsin. Wish we could've done more but cash constraints and being able to actively manage the projects slowed me down. It pushed me off the edge of leaving my job though so next year will be better. Good luck finding your next deal!

Did some deals this year, not the best not the worst. Single Family purchase for 14.5k, rehab 60k, arv 150k will finally be renting for $1400 in March. 6 family purchase for 160k, rehab 100k, ARV 350-375k rents for 4950 when done, 4 family purchase 150k, rehab 130k, ARV 200k (mediocre deal), 2 single family and 1 condo flip, there's probably a wholesale I'm forgetting about along the way

Milwaukee definitely works for rentals.  As long as you're buying right and can manage it or find someone trustworthy to do so it can be a great town.  I buy in the near suburbs (West Allis/Cudahy/South Milwaukee), and so far in a few Milwaukee neighborhoods -Bluemound Heights, Silver City.  I think that as long as you're comfortable dealing with the people you are going to get in your rental there's opportunity everywhere.  I've worked with a property management company in some of the hardest parts of this town and you can definitely make some money in the harder neighborhoods however the problem I see is that when you go to sell it's going to be hard to recoup the money you have stuck in because there isn't much value in the homes. There's also the definite problem of higher maintenance costs/management headaches, but maybe if you specialized in section 8 this could be less bad.  I have friends that do well in buying far north or northwest side and I personally love blue collar burbs. 

Yes it's possible.  It all depends how creative you are.  There are conventional loan programs for 5% down for owner occupant and depending where you are there are plenty of grants available, especially for individuals that don't have high incomes.  Then there are seller finance deals, land contracts, etc.  Does your local market have affordable areas?  My last live in flip had a purchase price of $77100.  I put down maybe $4000, received $5000 in grants, and over two years maybe put 20k of rehab into it.  Then we sold it for 145k receiving 60k or so back.

Right now a friend of mine is doing something similar.  He got an off market flip deal under contract for $107k (Thanks @Rebecca Knox!) He's using a 15% down loan from a local lender that knows grants.  They are getting him $9k in downpayment assistance grants and a $17k rehab loan with no interest and no payments, you just pay the originally borrowed amount upon sale. He's also getting the seller to credit him $2500 at closing.  All that being said he's going to have to put down $5500 or so and will have $17k of no interest rehab money.  

If you want to do this for a non owner occ property and you have more time than money you might want to start wholesaling and offer seller financing when you make offers.  It really all depends on where you are in life and how creative you are.

Are there people investing in your area? Are there meetup groups for REI locally? If not maybe you can start one. Maybe it's a market that won't work for rentals but it will for flips? Maybe you'll find out that the best place to buy local rentals is 45 minutes away! You won't know until you talk to others locally!

 Joe- Keep searching, find creative ways to kick up deals, offer everyone you meet a finders fee, etc.  Just closed two homerun deals this month, they're out there just waiting for you to find them.

Congrats!  The big thing that you said you noticed about the other apartment was the smell.  Where we buy rental properties usually that is caused by cat or dog urine.  Is that the smell?  If so the cleaning crew probably won't get rid of the smell.  Kilz (Shellac based) everything in rooms and closets where you can smell it from floors to baseboards and a couple feet up the walls.   Good luck!  If you have any willing friends now is the time to buy a pack of beer and some pizza and call them!

I Bought a 4 family plus some shop space in Cudahy, Wisconsin (near Milwaukee) in 2018 with BRRR funds from my first purchase. I had about 20k of fixup funds after the downpayment and after rebuilding a basement apartment, cleaning up the others, and renting the previously vacant garages I have a property that rents out for $4200, with annual taxes of 3k, and a value of close to 300k. Best 20k+ annual income ever. This month might have beaten that deal between a house purchased at 14.5k in a suburb and a 6 family for 160k in another suburb but only time and rehab will tell! Looking forward to buying more deals! It's been a wonderful couple of years full of steals.

@Dave Foster True, I do have financing lined up but it's somewhat expensive.  5.25% on a 5/1 25 am.  But yeah being able to exit it in a year or 2 to something larger with a later capital gain would be optimal.  Thank you for the advice!

@Jordan P. Those are good points but if I mortgage it and take 80k out it will only cashflow around $200/mo while leaving 70k equity in the deal.  I could cash out more but then it won't cashflow at all.  Between this deal and the few others this month I'll end up with a total rental cashflow this year of around 70k which isn't bad and will cover my living expenses.  I would definitely be able to spend more time with the family and be a happier person over all, and yeah even with taking out 80k that would be enough to keep rolling into more deals.  Good points.  I'm going to call your shop for cabinets for this particular deal today!