All Forum Posts by: Account Closed

Hi Everyone,

I have another question about my family's move back to Wisconsin in June/July of this year. I would like to become a real estate agent when we move back. I have the pre-licensing coursework on it's way to me already. Does anyone have any suggestions on a good firm to work for in the Milwaukee area? I've read a lot about looking at commission splits, but others say not to look at that and rather look at training. Still others say look for a top producing firm and find a top agent to mentor you. Does anyone have first hand experience in that area or any general tips for starting off in this career? Is it difficult to get picked up by a firm or will most places take new people and see if they work out? Anything else I might be missing?

As always, thank you all for your advice!

Conrad

@Dawn Anastasi

I sent you that info. Thank you for taking the time to look into it for me.

@Jay Hinrichs

I can't say it's been a fun experience, but we are committed to making something positive out of this. I'm guessing things would have went a bit better if we were there, but just by reading about the numbers we should have been looking for when we were buying this, it might have been doomed from the get go.

@Bryan L.

Sorry to hear that! Dealing with just two units of high turnover is tough enough. The refi helped us a good bit though. Are you managing your own properties or are they out of your area as well? My property is low end as well. I actually met with an investor/realtor in the area a few times who showed me his portfolio and how it grew historically. He was adamant that the homes in shadier areas of town ended up giving him the best returns. I could see how the rent to mortgage ratio ends up looking good, but not with the high turnover. That's where I keep wondering if we did some more improvements, would people stay longer... or is truly just the transient nature of people attracted to rentals in this area?

Steve,

Thanks for that website. It looks like we are in the lower 20th percentile... median $660 for two bed and average is 685.

I always wonder about the screening because the more turnover there is the more the PMs get a finder's fee. That math definitely sounds better to pay one full month to get someone in there longer. What I think we will do then is let this PM go when we move back. That way I can pick the next tenant myself and give management another try. If that doesn't work out, I'll pick a different management company. I figure there won't be hurt feelings if I'm letting them go in order to manage by myself, at least for a little bit.

Seth,

I believe the PM looked at section 8 but we didn't qualify for a couple of reasons, although that was a couple years ago so I'll have to ask again. We do get tenants that get support via vouchers after we issue a 5-day, but I believe that only happens once or twice before the support is not availalbe.

Phillip,

As far as the market for multi-family homes in Kenosha, it looks very soft. I'm just looking at what is available for sale and prices of duplexes in this area are all over the board and very low... starting from 30K actually. For rents, I'm not sure overall, but for my property the total rent has gone down 100 since we bought. I just checked the classifieds and found the going rate for two beds in that area to be about 650 to 670, so we may not be getting as much rent as we should be. Overall, the 650 number seems to be where rents were in 2006 because that's how we decided to ask for 650 for each one of our units. I'm not sure if that number fluctuated in the meantime and is on its way up or down. Is there a way to check for rent trends?

Thanks,

Conrad

Hi James,

Thanks for the reply. I've never looked into selling it via land contract. I just searched for that in order to get familiar with what that would entail though. We've thought about switching the property management but found it would cost us more in terms of monthly fee going up a percent and two different new PMs that would keep 100% of the first month's rent as a finder's fee vs. the 75% my PM keeps. I'm still not sold on my PM because I've felt like they've come in pretty high for some maintenance and painting they've done (they charge flat rate of $25 an hour for painting and handyman type work through a separate company owned by the PM's husband). The hourly rate is fair, but they've come in really high on hours for clean up and painting before. To try to combat that I'm having them send me detailed pics after every move out so that they would have a harder time justifying say ten hours for clean up when there is some light cleaning to do and a few bags of garbage to take out. As far as tenants go, I think the area is one big problem as well as my upstairs unit being less than desirable. We seem to always get people that can only pay about 200 bucks for a deposit and then I'm left with 500 plus dollars worth of clean up and repair when they move out... usually with a month of back rent due. When I asked about the deposit situation, the PM told me that in this area we are basically dealing with people who cannot put even a month of deposit down and they will find another landlord who will let them move in for a few hundred dollars.

Looking at the land contract/seller financing, I'm not completely against doing it but I am more interested in trying to ride this place out a little longer. With that said, I'm wondering if it would be silly to put say 5k or more worth of work into the place to make it more appealing and hopefully attract better tenants. At the same time it's already very underwater... Would it be silly to go that route?

Hi Everyone,

I'm just looking for some suggestions on what to do with a duplex that has never performed well (seems like we need to keep adding cash for repairs and maintenance all the time and/or tenants are coming and going very quickly - sometimes just 6 months or so).

My wife and I bought this duplex in 2006 in Kenosha, WI right before prices took a steep dive. I must have looked at nearly a hundred properties and put offers in on three, before getting this one accepted. I felt good about the numbers at that time... We ended up putting some money into the place to strip the roof and put a new one on, update the electrical from fuses to circuit breakers, paint, and buy new appliances for the upper unit. After this, we cash out refinanced about 15K because of the increase in value of the repairs. We ended up with a loan for 105K @ 7.15 % (bad rate because one of us had bad credit). I initially managed the property myself, but at the end of 2007 we moved to Las Vegas, NV so I had to hire a property management company. In any case, we had one year from 2006 to 2012 that we actually netted money on the property at the end of the year. We have been losing around 2K-4K a year otherwise. Because of our W2 income we are limited to just taking a sliver of our losses (we are renting out the SFH we lived in before we moved to NV and generating losses on that one because rent doesn't cover mortgage).

Fast forward to 2013 and we had our bank contact us to refinance the loan. We did a streamline refi and got down to a 5.158% rate, which definitely helped cash flow, but we still had a bad year in '13 with tenant turnover, plenty of maintenance, and a new furnace right in time for Christmas.

We still owe 103K on this house after the refi and it is probably worth about 60K. We are moving back to Wisconsin around August and my brother in law is a carpenter so I plan on doing some work with him to bring the property up to better condition in hopes tenants will stay longer, however, the property is not in good area so I'm worried I might be spinning my wheels here. As far as numbers now, rents are 1200 a month while mortgage, taxes, and insurance run 812 a month. Property management takes 9% and tenants pay all utilities except for water (about $30 a month).

Any suggestions on what my best move is with this duplex? Thanks in advance.

@Dave Carpenter I don't have any friends in RE. I'm guessing our friends will watch from the sideline to see what happens when we get back into it.

Jerry,

I'm at the University of Nevada. I'm done in May 2014... only because I'm on the gaming law journal and that was a two year commitment. Otherwise I'd be done at the end of this year. Who would have thought that would come back to bite me? Haha, we are all counting down. That is the one thing we all have in common in law school.

@Phillip Dwyer I'll let you know what happens when I get out there! @Jerry LoCoco Unless a great law opportunity comes up, I think the latter is the only option. Where are you studying at? @Dave Carpenter which group are you a part of? The Milwaukee REIA group? I believe I found two groups out there. I don't want to sign up yet since I won't be able to make any meetings for almost a year. Our friends moved up to Cedarburg a couple of years ago. We visited them last year and we thought it would be the perfect place to raise a family. Thanks for the offer, I'll definitely touch base with you once we move back there.

Hi guys, thanks for the welcomes! @Dawn - We have both of our properties in Kenosha and that's the only market I'm remotely familiar with so that's a possibility. I would like focus in Ozaukee County like the Cedaburg/Grafton area because that's where we would like to move to. I know they are both very small towns though so not sure of the opportunity there. @Nicole - hoping to run across some of the great investments. I'm going to look up investment clubs out that way next. @Ramon I'll definitely let you know. Gotta get that pesky bar exam out of the way once we move back.

It's nice to see how quickly this site works for networking. Thanks again guys!