All Forum Posts by: Darren Budahn

That makes no sense at all.  I have never heard of anything like that. 

Congrats on the great cash flow purchase! Looks like a Woodlands condo.

@Tim A. 

I got 2 duplexes rented in February of this year in Milwaukee.  I'm sure it can be more difficult in the winter months as most people aren't too thrilled at moving when it's 5 degrees outside, but I haven't had it happen to me personally. 

You can also write an addendum into your rental agreement saying that the tenant cannot move out in certain months unless they give you advanced notice.  For instance, if tenant wants to move out on Feb.1, tenant must inform you by Dec.1.  However, I would speak with a lawyer and have them proof your lease if you go this route.  In WI, you either go with a 12 month lease or a month to month rental agreement.  Each kind of agreement is governed by certain state laws as far as giving notice to end a tenancy.  If you go this route, it's kind of like a hybrid lease.  I know landlords do have these kinds of leases, but I would get a lawyer's take on it. 

If you are looking for cash flow, I wouldn't be looking at duplexes in Waukesha County. I would look in Milwaukee if that is your goal. Obviously neighborhoods in Milwaukee will be much different than they are in Waukesha.  While prices will vary in Waukesha, there are no bad/dangerous areas in Waukesha. Depends what your goal is and where you feel comfortable investing. 

@Kevin Moen

There are lenders who will give you a HELOC on an investment property. From what I have read, they are difficult to find, but they do exist.

The LTV will be lower than a HELOC on a primary as well (60% to 65%).

I know certain lenders advertise right here on BP in the Marketplace, who will give you a HELOC on a rental. Otherwise, try some smaller local banks or credit unions in your area and see what they say. You will probably want to speak with someone who works in commercial lending department. Good luck

Your best option to get an investment property if you have minimal funds for a down payment would be to get an FHA loan. You can buy a duplex, triplex, or quad with only 3.5% down as long as you plan on living there. Otherwise for a straight non owner occupied investment property I don't think you will be able to get in for less than a 25% down payment. Of course if you have 25k that could be enough for a down payment on a duplex in the 50 to 70k range if you don't plan on living there. Make sure to have enough reserves.

I would say the worst area is:  southern border of north avenue. Northern border is Capitol Dr. Western border is Sherman Blvd. Eastern border is I-94.

I second the advice given by David Krulac. Buy a quad with FHA financing, live in it for one year, and then buy another quad the same way, while turning the first property into a total rental. Easiest way to generate cash flow with little money out of pocket if you are just starting out IMO

I think you need to decide if you are wanting to go for cash flow or appreciation first. I would choose cash flow since there are tons of Milwaukee properties straight off the MLS that cash flow well, even if you are paying retail price.

If you are looking at SFH's in the suburbs, you will be lucky to cash flow period, but you will have a greater chance of future appreciation, although it's certainly far from a guarantee. You would also use up all your available funds on the downpayment for one property making it difficult to scale your business.

Also, if you buy a property that cash flows, you will have enough left over to pay a property manager if you don't particularly like the neighborhood.  Looking at crime maps is fine, but the neighborhoods in the city change very quickly and they change literally from block to block.  If you want any advice about a particular neighborhood or address, feel free to PM me.  

I also agree 100% that not using leverage would be a big mistake.  Good luck to you

Karen, 

Why not buy a property in Milwaukee for like $50,000 or $60,000 that you can rent out for $1,000 or so a month? You can buy move in ready houses like this in average neighborhoods all over the city. You can get any local bank to give you a 75%LTV on these kinds of houses. You only need to come up with 12 to 15k cash out of pocket still leaving you with plenty of cash reserves. And you can get a 30yr fixed rate mortgage for only 4.5% or so. You will get a taste of how comfortable you are using leverage. Very low risk. It will cash flow and you can use that money to either pay down the mortgage faster or to invest in other properties.