All Forum Posts by: Michael Braatz

Hi all,

My partners and I received an accepted offer on a rent ready, unoccupied, SFR in Milwaukee.

My question is, at what point do we start advertising for tenants?  Immediately? After inspection? After closing?  Are there any legal issues with advertising for a property we do not yet own? 

Also,  any other tips regarding this part of the process would be appreciated(from acceptance to closing).

Thanks in advance!

Mike

I don't think you are being too conservative. I'm very new and we use similar numbers. I have found maybe 7 MLS properties that have the potential to cash flow over $100 per door with 7-11% cash on cash. Nothing amazing but fits my requirements (Milwaukee area)

I much prefer to run specific numbers rather than use a "rule".  add up all the expenses you can expect and see what cash flow you would have left. 

based off just the purchase price and rent, I would guess this likely be a poor deal, though I am rather new and unfamiliar with your area.

Best of luck!

Mike

@Marcus Auerbach Thanks for the response! The home appears to be in very good shape. it is in 80-100k range. The only Capex item that is coming up soon in Furnace. The rest is updated.

Hey all,

I have mostly been looking into duplex's in the Milwaukee area, but I have recently found a SFR I think would work but I was hoping I could get some input from those in the market as to what I could budget for in terms of expenses (1200 sq ft 3 bed. 1.5 bath, home in good condition). My first shot at it goes as follows;

Capex $100/mo

Maint $100/mo

Water/sewer/trash: tenant

insurance $500/year

Vacancy 5%

management 10%

Thanks in advance!

Side note, the half bath could be turned into a full bath at the expense of closet space in master bed.  Is that something that would be worth it in the Milwaukee area?

-Mike

@Devang Vora Capex depends on a few things to my understanding; how long you plan to keep the property, the age and state of any of the big ticket items, etc...

I am also quite new to investing so I will not venture a guess at what you should budget, but I know some like to budget a percentage of rental income(5%,8%, 10%).  I personally would prefer something a bit more specific like taking account of all the big ticket items that will need to be replaced and using their expected life and expected replacement cost  to get a solid number that, imo, has a better chance of being accurate than a flat percentage.

Hello Devang,

Just for some clarification, is the $260 expenses you mention the combination of PM, Vacancy, and HOA? have you factored in maintenance and CapEx?

That's great! Just be sure to find a property that works with the increased mortgage!

Would you mind throwing out some more numbers?

Maint, Capex, taxes, insurance, mort, utilities, etc...

I was given the option for 15% down  on an owner occupied investment property(duplex), but that is about the extent of my knowledge on your question.