All Forum Posts by: Joseph Walsh

Ok, as an "investment" property, he didn't do great. However, even as an investment property, he's cash flowing (keep in mind that HOA covers a lot of the "maintenance" part. still as others have pointed out (yet fail to acknowledge this wasn't bought from an investment perspective), at 3k a month rent, you're ideal arv price would of been less than half what you paid. However, let's not dismiss the appreciation on a 400+k property, so even break even would be nice from an "accidental land lord" situation, depending on the market. My outstanding "accidental landlord" property actually LOSES about $100 a month, so I would love to have his problem! However, all that said, I learned the lesson, and when I bought my current PRIMARY residence, I still looked at the purchase price and wait for a "deal", so, you make money on the purchase is the valuable lesson learned here, primary or investment. According to my dad, SD has the best weather anywhere in the world, so congrats on that.

I don't know the laws in your area, but it would seem that raising the rent to market should be the first move. Shes on M2M, so I expect there is at least a 30 day period, probably 60, maybe a max percentage increase as well.  So, along with the 90 day notice, add in a second notice of rent increasing at 30/60 days, or whatever.  Unless you are in NYC, at which point, I wouldn't be in the landlord business.  I do disagree on the heat being insufficient.  It gets up to heat, but is a boiler system, so takes time.  Instruct you tenant to LEAVE THE HEAT set at 68, assuming she has her own thermostat, this is how boilers work.  Any radiant for that matter, takes time to heat up.  It'll actually save you money, maybe give her a pamphlet.  I also agree I would be planning on separate  utils, and informing her of when the work would be happening (soon, early in the morning starts) and that you plan to install all new electric heating to address her concerns with the response of a boiler system, which she'll be paying the bill for (assuming she moves, don't actually do this, electric heat is only cost effective in parts of Canada near Hydro plants).  You should expect to upgrade your windows and insulation to meet a minimum R value when transferring paying for heat to your (hopefully future) tenant, I expect your jurisdiction has a clause for this.

I had this problem.  Then I figured out I was the issue, not the tenant.  I hired a property manager because I don't have the personality for it.  They had him paying up rent on time, and within 3 months he had paid a bunch of back money due for the water bill (which is now just part of the rent).  It was a matter of late notices and fees at 5 days, and at 10 days, eviction notices.  he promptly paid up both times he got the 10 day notices.  Now he pays a couple day's early each month.  They also changed the payment date to align with is Pay checks (or in this case SS checks).  They pointed out to him, you can live without a car, cable, or phone, even electricity and heat for a few days, but not without a roof, rent first.  He didn't leave, and is still a great tenant (hard on the house though), and now has been "retrained"

Hu-Rah! Welcome back.  Being from MKE, you know that unlike a lot of metros, the quality of an area varies by more than just zip code.  Just remember that 4-5 blocks can make a big difference here and you should be fine, assuming you stay in the right 4-5 blocks.  There are nuggets everywhere, good and bad.  Just note that Milwaukee seems to be trending ever so slightly toward being more hostile toward land lords in recent years.  Not sure if this trend will continue, or just a reaction to some high profile "bad landlord" issues in recent years.  But something to keep the pulse on, and structure your business/leases/tenant screenings, etc. accordingly.

I wish you much success.

Hi, and thanks for sharing your time and knowledge.  I didn't see this one in there, so here goes:

For those used to residential investing, how does apartment investing differ from the financing side?  How are loans structured/qualified for, etc.  (what documentation do you need, etc.), what if you have partners, insurance/liability, etc, how does seller financing differ, or is is just a bigger version of a land contract, etc.

have my eye on  a 3 building complex that I want to build toward over the next few years (I think it'll be ripe to approach the owner about selling), so trying to get a head start on what it is I am potentially getting in to.  I know it's a loaded question, but I am betting you can boil it down for us.

Thanks, 

Jay

Welcome to BP.

Just because you want to see it, doesn't mean it's there.

Why not price it higher, you can always decide to take less, voucher or not.

Why would any tenant allow that?  If you are requiring me to pay the remainder in full AND keeping my security deposit, why would I let you into the place to show it to prospective future renters ahead of time? you aren't doing me any favors, I am certainly not doing you any.  I would just leave it vacant in that scenario,  you can wait until the day that I am "officially" out per the lease.  Just saying if I were the tenant in this scenario, it's what I would do.  And since you already stated you are keeping my deposit, I wouldn't clean it, or give a bleep if the movers dinged a wall or molding on the way out.  Not advocating any of that, but seems like a clause that could backfire on you.

Question for the flippers out there to educate the rest of us(sorry to hijack the thread)  Assuming the numbers he used were valid, do the numbers add up to a quality flip candidate?

230k ARV

140K purchase 40k in repairs (seems like a lot at almost 30%)

with 20% repair contingency and closing costs, that puts you at ~52k

40k sounds like 2-3 months work, so lets say 3 months holding costs - 3k

All in your at, minimum 55k, so 195k on a 230k ARV. after realtor fees seems like your investing 55k in hopes to net about 20k Does that seem right? I don't do flips because I am ignorant on the subject and hoping to learn from this story.

And I do hope you find an "out" from this deal gone south.