All Forum Posts by: David Mo

@Jordan Smith

Look forward to connecting!

@Jordan Smith welcome home! I currently have a house hack in West Allis and if I were in your shoes, I would start by pulling one off in Milwaukee. That way you can get the ball rolling while you spend some time learning the various neighborhoods and where you want to stay away from. Networking is really important!! Reach out to some realtors who invest themselves and see if you can form a partnership since you have limited time. Best of luck, and feel free to reach out if you would like to connect! 

@James Hamling thanks for the explanation. That was very helpful! 

@James Hamling I drew my conclusion from the sources I linked regarding inflation and interest, although it's very possible I came to the wrong conclusion. Regarding my mortgage statement, the idea I was trying to convey was that a fixed rate mortgage balance is locked in for the life of the loan and the remaining balance will not change with inflation. @Marcus Auerbach gives a great example of increased wages. To overly simplify it, if minimum wage inflates from $10 to $20, I can now pay off my mortgage twice as fast. Perhaps over simplifying this is why I'm missing something and it's not a hedge, or hedge is the wrong term to use. 

@Cherie Tormey Take my other post with a grain of salt because I could be wrong.

At the end of the day I just want to understand this too. If I'm getting something wrong please explain why and what's correct. Thanks! 

@Cherie Tormey I think the correct way to view it is how inflation and the interest rate affect each other. Generally the two have an inverse relationship. As the interest rate for a mortgage lowers, interest grows and vice versa. Lower interest rates means more people purchasing homes which will drive the prices of housing up. 

I'm not sure which component is the driving factor. For example, is it inflation that drives interest rate, or the other way around? 

Another cool thing is that a mortgage is a hedge against inflation. If I have a mortgage balance of $150k, it's still $150k if 1 dollar today = 2 dollars tomorrow. More reason to get a house when interest rates are low! :) 

Sources: 

https://www.investopedia.com/a...

https://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp#:~:text=There%20is%20a%20general%20tendency,to%20have%20an%20inverse%20relationship.&text=In%20general%2C%20when%20interest%20rates,economy%20slows%20and%20inflation%20decreases.

@Account Closed Sounds like an opportunity to help some struggling home owners in a tight pinch :) 

Hi @Adam Gerstmeier! I'm a local investor with a duplex in West Allis. You're jumping in at a crazy time right now where prices on the MLS are sky high and bidding wars are expected. @Matthew Meunier basically nailed it on the head in that you'll have an easier time finding a good deal off market, and to do that you'll have to network and get creative. In your situation where time is scarce, perhaps a partner or two with more experience and time will be beneficial. 

Set your expectations now that you're going to get beat up and frustrated. I say this not to deter you, but so that your goal is that much sweeter when you achieve it. Good deals are just harder to come by for everyone. Make sure amidst your frustration that you stick with your numbers and don't end up "settling". Deals are still out there...just harder to find! 

Best of luck, and feel free to reach out if you would like to connect!

@Ricky Conti I'm a very hands on person so I'm thinking about how I want to do these updates and learn along the way, however I am expecting it to take a lot of time. In the short time I've lived here I've discovered so many places that make me like this place even more. I have read that WA is going through a transition phase which is what got me interested in this location in the first place, but I look forward to seeing it happen in person! 

@Daniel Smyth I did not know that. Thanks for the info! Thank you as well @Marlen Weber! 

I set a goal this year in my introduction post to own 1 property by the end of 2020. I purchased my first duplex some time in August and have successfully reached that goal. 

I wrote about my first purchase in the Deal Diaries forum over here:

https://www.biggerpockets.com/...

I wanted to talk about what I learned from my first purchase in more detail here and to see what others have gone through. Please share your thoughts! 

Mistakes I made:

1. I didn't check to see if the security deposits were credited to me. I was able to get my bottom tenant's deposit back after the deal closed but was unable to retrieve the deposit for the upper tenant.

2. I failed to consider the climate that this property is in. Because Milwaukee experiences cold winters, you're more likely to run into frozen/cracked pipes. I should have considered this and gotten a plumber inspection along with the standard property inspection. A few days after purchase I was notified of a water issue where water was pouring from the ceiling of the basement. I've since identified that it is at least the toilet that's causing the problem, but perhaps an inspection would have caught it sooner and we could have had the previous owner address it. 

3. Trust but verify. There were water issues in the basement that were addressed by the previous owner. After the fixes were made, pictures were sent of the dry basement, but had I went over myself to see the basement, I could have potentially caught the ceiling leak issue before purchasing.

4. While not a complete deal breaker, there was a tree that was basically hugging one of the walls of the property. I did not consider any foundational damage that this might have caused. I've since removed the tree myself, but still have a stump to deal with. 

5. This definitely depends on each case, but in my case it would have saved me a lot of headache if I made vacating the units a part of the deal. My upstairs tenant caused me a lot of headache while moving out which was not worth the extra month's rent...which wasn't even paid to me in the end! I now believe that if you plan to do any renovating / drastic rent increase, it's just cleaner to have tenants out asap. The bottom unit is currently renting for $900 while I believe the market rent is at least $1200. $300 of an increase is a lot for anyone to stomach...even if it's fair. 

6. I did not set the tone correctly with my lower tenant in the beginning and developed a friendship with them which has made it more difficult for me to make business decisions. While I was warned of this ahead of time, I think I needed to experience this issue firsthand due to my personality. 

What issues have you guys run into after closing? I would love to hear about your first purchase experiences and what you learned from them!