All Forum Posts by: Kevin Rea

First of all, the title was wrong: its a 20 year old modular (Schult Homes).

@Erin: Attached is the contingency about the $1000 remediation.  The seller does have the "right to cure".

I was told that we cannot have more than one inspector by our agent.  Not sure if its an ethical thing in case but since we have 15 days to do this, I am sure it would be a hassle for the both agents to have to show up for multiple inspections.

This is a cash offer so no lender involved, although we are going to get an appraisal to help us decide how much we want to soak into it and to possibly get a HELOC.

Earnest is $10,000 which would be painful to swallow but if the numbers do not add up then it is part of investing.  Sometimes when you jump on something you have to make all your decisions while in the air.

Correction: the home is a "manufactured home".  Not sure what that means, but it appears to have standard wall thickness not the thin mobile home walls.

I just had an offer accepted for a waterfront property on Lake Michigan near Door County in Wisconsin.

I couldn't pass up this place knowing that land on Lake Michigan in this area seem to get bought before most even see it on MLS.

It has a modular home built in 2002 and seemed well taken care of but had not seen any visitors for the previous 2 years.  In the spring they found a leak in the roof so they replaced the whole roof and hired someone to remove the mold in the attic.

When I walk in, there is a strong mildew (mold?) odor in every room.  There is 2 places in the walls that have the drywall removed to get to the water pipes.  All water (sinks, toilet, shower) have good pressure.  Floors seem firm, no soft spots.  No signs of mold in any corner.  I noticed cat litter and cat cage out in the garage.

My offer was accepted 7/29, so the clock is ticking to find any problems.  I have water/well coming out 8/3 (water testing is the longest lead time, 7 days).  Then I have a home inspector coming out 8/4 (he was recommended and has 30+ years experience), he said he could tell if and what kind of mold there is just by smelling the inside.  Septic will be next week.

I feel confident that the overall house structure is solid but you never know.  The roof is new.  The siding and deck have some green growth on it but appears that a simple sanding would make it look like new.

First question: Can I hire multiple home inspections? My fear is if I hire someone who happens to miss a major problem.  Will the listing agent only allow one inspection?

Second question: Its a modular home on a brick foundation (I think on a cement slab) and is 1340 sf.  Based on the size, what is worst case amount needed to make this place, not just rentable, but pristine and get rid of the smell.

Last point to make is that the seller must pay for anything the home inspector finds that is over $1000, so this should cap the amount I will need to spend on repairs.

I am overly worried at this point because I may not know all of my outs for this deal and would hate to get sucker punched on my first investment.

I have been looking on Zillow for over 5 years and noticed something strange in the last year or so.

St. Johns in the USVI has only 1 listing as of today on Zillow, there used to be much more.

St. Thomas seems to have about 1/4th of what it used to have.

St. Croix is loaded with listings!

Can anyone explain this for me?

@Kahner Delchambre

Here is my 2 cents and why I am investing in Door County (and why I am okay with inspiring other investors to join in even though they might be a competitor).

In the past Door County was against change and locals controlled most decisions. I read an article recently about how one town changed its rental ordinances to be more friendly to short term rentals and is hiring an agency to oversee everything. I feel this is the beginning for all towns and villages to do the same.

Budgets are tight and these places are realizing that when people stay for a week or less they spend way more money shopping and eating out.

I could go on and on about the positives. I also think that COVID helped wake people up but that is another can of worms.

I am seeing big projects that got put on hold from the housing crash of 2006 being built now. And there does seem to be a big influx of condos which may or may not tap into the short term rentals depending on their restrictions.

Also towns are creating more bike and walking paths. This is expanding the “walkability” range of the towns so investors can build out further.

My finger is getting tired so I will wrap it up …

There is maybe 1 in 10 locals that complain about every and anything and as long as the complainers feel that they are the majority then they will keep barking. So I want more short term rentals to help DC and it’s locals realize how much all that influx of money will help their community.

BTW it probably wasn’t profitable for a company to install broadband internet in DC but now it is and locals should be happy about that.

@Martin Fletcher

Hello Martin. I grew up in Green Bay and now live near Milwaukee. I own property on Lake Michigan that I am going to build on but the lumber prices have put that on hold so I have been looking to buy land or rentals.

I studied the Planning department meeting minutes for Sturgeon Bay and Egg Harbor so far for the previous 10 years. What I am seeing are lots of condo projects and mixed use over the last 5 years.

I am curious to see if supply outstrips the demand or if the supply makes more people visit Door County.

I have also seen a change in mindset of these planning departments from stringy, “don’t like change” mentality to more open and flexible.

As far as prices, I feel that they increased proportionately to everywhere else depending on location (of course). The more walkable the property then the more demand.

@Jennifer Walsh

I researched Waukesha County during the housing crash. I remember the weekly sheriff sales going from about 5 to 20 (it would’ve been higher but they couldn’t handle more).

You are right about the cash flow. It’s hard to find a positive cash flow.

My conclusion was that there are too many investors here. When a foreclosure (that was worth more than the mortgage it owed) made it to the sale date (and it was not often) there were usually 20 people with Bigger Pockets than me waiting to bid.

So here is my suggestion:

1. If you are looking at foreclosures and find a home listed below it's FMV, approach the owners ahead of time to see if you can do a deal (I don't know the legals on this so if anyone thinks this is a bad idea please chime in).

2. Find delinquent taxes. I use Waukesha Tax site and created a program that runs through all properties (but there might be an easier way). Then approach the owners to work out a deal. You can usually figure out ahead of time to determine if they owe more than the house is worth by finding out when the house was last sold and for how much then use a mortgage calculator to get general numbers.

3. If you are looking at homes for sale ... the best deals get bought up way before they get listed on websites like Zillow or even Realtor.com because real investors have realtors that give them the best homes before they get listed to the public.

Disclosure: when I did my searching, I never ended up buying anything (couldn’t really afford to). I have never flipped or rented any homes. My opinions are not worth a whole lot unless a seasoned veteran can back then up. But I have lived in Waukesha County since 2000.

@Kurt Heggland

The family and I visit Door County a few times each year. Every time we visit we think how great it would be to have some rentals there.

But after talking to some locals who have rentals and a motel owner, I get the impression that they are really struggling. And when I do my due diligence I find out how strict the towns are in Door County. Too many restrictions for a newbie like myself to follow. But I am sure they have their reasons.

@Samantha Ruiz

Any reply from Waukesha county treasurer about delinquent tax listings?

I live near Sussex/Pewaukee and have been keeping my eye out for land or a foreclosed property in Waukesha county. Foreclosures seem to be a waste of time because any house that comes to auction that is below the appraised value will have a dozen bidders on it. And I have approached or mailed letters to some pre foreclosure but got no interest.

So I focus now on finding raw land. What I do is drive around north west part of Waukesha county and south part of Washington county. When I find an area I like (ie. beautiful land in a fairly undeveloped area), I will go to the county’s tax website and click on the properties in that area and look for delinquent property taxes.

For anyone unfamiliar with finding tax sites ... simply Google “Yourcountyname county gis” or “Name county taxes”. It will either take you directly to a parcel map or to a search prompt where you will search for an address then click on a parcel map link. From the map you can click on any property and find its tax details.

I can explain this better and in more detail if you like but right now my finger is getting tired typing on my phone.

I have seen developments around me that will buy up the large (100+ acres) of land to develop and instead of buying up the smaller pieces nearby, they simply build around them.  I understand from their viewpoint that it would not make economical sense to buy a 10 or 20 acre parcel at a higher rate than what they got the 100+ acre parcel for.

I can do all the research to find possible areas of future development, but I don't want to buy too small of a piece of land that might get built around rather than bought.

So if you were a speculator and had a good idea where to buy land, what is the minimum acreage you would buy?