All Forum Posts by: James Konvalinka

Hey,

I am wondering if anyone has some experience in replacing an old octopus Furnace with a forced air furnace? I am looking at purchasing a duplex that currently has an old school octopus furnace that has been converted to burn natural gas and I have no idea what it would cost to convert this to forced air or what the process would even be. I am planning on reaching out to some local HVAC contractors but I was wondering if anyone on BP has done this before and could shed some light on what I might be getting myself into. 

Cheers!

Have you looked into Milwaukee? There are some good SFH or duplexes you could get for around $70k - $100k that cash flow pretty well. You could use a normal conventional loan with a 20% - 25% down payment and just purchase as a buy and hold.

You can also get creative and see if you can find a money partner to invest with you and cover any purchase price or rehab costs if you wanted to BRRRR something. You could use your money to purchase the property and then bring in private money to fund the rehabs and pay them back once your refinance. There are tons of options that could be available to you but you may have to get a little creative. It really also depends on your comfortability level and how risk tolerant you are. If you are looking to scale quicker you will most likely end up bringing on hard or private money as you grow anyway so it might be worth while looking into it right away.

Either way good luck with your search!

@Andy Tang Hey Andy! Not sure about Cincinnati but I know here in Milwaukee you can do pretty well with $200k for rentals. If you are looking for single families, for the most part you can get rentals in some pretty nice C/C+ areas around $120k - $150k. These on average will bring in about $1200 - $1300 a month for a 3 bed / 1 bath depending on condition. Same thing with Duplexes, for the most part you can get into some really nice areas for $150k - $200k. The only thing with single families is once you start getting over $150k it starts to get a little thin on cash flow depending on where you buy at. Yes, some areas that are a little nicer, C+/B-, you might be able to get closer to $1500 a month in rent but the purchases prices tend to go up pretty drastically as well. ($180k -$250k+)

But it really comes down to what exactly your goals are for your rentals, how much cash flow you are looking to get and if you want to buy in an area that will see more appreciation. There are some really good areas that I believe are going too start appreciating nicely over the next few years due to a lot of money being invested into the infrastructure, small businesses and the area overall. 

The only cavoite is that you really need to make sure you do your research on the market here. I am not sure how familiar you are with Milwaukee but there are some areas that can look great on paper, really lower purchase price with pretty strong rents, However, these can be pretty rough areas that generally have a higher crime rate and tend to have more maintenance calls. If you are going to invest in either of the cities I would suggest finding an investor friendly agent who has worked with long distance investors and has a solid knowledge base on the markets and what to look for and what to avoid. Also, if possible try and take a trip out to both cities to drive around and check the areas out for yourself! 

Congratulations on the first two years! Sounds like you have a decent amount of momentum going right now and you don't want to lose any steam! There are a ton of different ways you can go depending on what your long term goals are and what you are comfortable with. But if you are looking to get into a 4 unit and don't want to wait until you have a full 25% for another conventional loan you can always try using the FHA 3.5% down and get another 4 unit. It would give you the opportunity to move into it force some appreciation since that seems to be what you are already planning to do. Once your in it you can do some rehab work, raise rents and refi into a conventional mortgage so you can drop your PMI and still have very low housing expenses while building equity and keeping things moving. That would give you the ability to full rent out your property #1 too.

If that's not a viable option you can always look to hard or private money. It seems you have a good enough track record that you can show someone what you are doing and possible find a source of money other than having to wait for your own savings to build up. That is another great way to keep the ball rolling while not over leveraging what you already have. 

Either way congratulations on the journey so far!!

Sounds like you have a good direction to start going in! That’s one of the biggest steps. Now that you know what you are looking to do you can hyper focus on it and before you know it you’ll have your first rental property! Personally I think the $100-$150k price range is a really great range for properties here in MKE where you can buy into some pretty solid C class areas and have a clean property with good tenants.

But definitely do your research because milwaukee is a very interesting market where you can go a few blocks in any direction and end up in some pretty rough areas. I would suggest once your living here to find a few areas that fit your price range and drive around them to get a feel for the area and what you should expect. 

Being an agent and investor here in the Milwaukee market I can tell you that a duplex around $100-$150k can on average bring you in about $150 a door if you buy it right. It just depends on what your goals and strategies are. If your going to buy a straight investment property with your money it may be better to sell your current property and use the funds to buy something here in Milwaukee. 

Also, how much equity do you have in your current rental? If you have enough equity, another option might be refinancing and using the extra cash from the refi to purchase another investment here in Milwaukee. That could be a way to keep your current property and buy another. However, only getting $108 in monthly cash flow does make it really tight if anything was to happen. 

@Ross Carlson - Have you ever considered looking in Milwaukee? If you are looking as far as Racine, coming another 20 - 30 minutes north might open up a lot more opportunities for you. I have a few clients who I have helped in Kenosha, but the inventory there is pretty limited compared to Milwaukee. Not sure what kind of investment property you are looking for but I am sure you will have great success coming anywhere north of the boarder! 

If you ever need some info on the Milwaukee market or surrounding areas I would be more than happy to chat just let me know! 

This is an amazing great thread! I also got my start in real estate through a house hack. I purchased a duplex in Bay View a little over a year ago and it has been amazing. I just had my first vacancy! My tenants stayed here for around 16 months until the ended up purchasing their first home! Now that they are moved out I am going to be doing some minor rehab work to improve the unit and re-rent it! Most people aren't this excited for a vacancy but having my tenants go from renting to homeowners is really exciting to watch. 

Now I also help other in MKE get their start with house hacking! I currently have 3 FHA buyers all looking to house hack! One is closing next week and the other two are just starting the hunt! It is hands down one of the best ways for anyone to get started in real estate and learn the ropes while having someone help keep your housing expenses low and building equity.

@Marcus Auerbach I think we decided we are going to add the bathroom in the basement. Here is my reasoning please let me know your thoughts.

The basement is "plumbed" for a bathroom. However, all they really did was install a raised platform and routed the toilet into the stack above ground. We are planning to finish the basement and add about 400 - 500 square feet of usable space which would bring our property to about 918 above grade sqft and 500 below for a total of around 1,418 sq ft. There are a few properties in the same neighborhood that sold for $190 -$210k with this same configuration (3 bed / 1.5 bath around 1,100 - 1,200 sq ft) with the basement as an entertainment area and full bathroom all in the last 6 months. Properties without the extra bathroom and finished basement are closer to $170k. We got the property at $75,000 and plan to spend about $40,000 on rehab (includes $8000 for columns in basement). We have enough room in the equity to add the full bath to really push this closer to the top of the market and not eat into our profits too much. Plus since we already have to have columns installed on the foundation we might as well do the bathroom foundation work at the same time.