All Forum Posts by: Nicholas A.

I’m exploring rental properties in Milwaukee, Racine, Northwest Indiana, or Jackson, Tennessee, but I’m consistently stopped by the prospect of aging plumbing. Many of these homes still rely on galvanized interior pipes or retain a lead service line up to the house’s entry point, yet standard inspections rarely include a video scope of the water, sewer, or supply lines. My concern is that I could face an unexpected repair bill running into the thousands—something I want to avoid without becoming so selective that I miss out on solid deals.

Are lead water lines that terminate upon entry into the house really an issue (not throughout the house, just into the houses entry point)? If low water pressure suggests a blockage or corrosion, is it typically a straightforward fix—scope the line, replace the offending section, and move on at modest cost—or does it more often signal hidden piping issues behind walls that demand full repipes costing several thousand dollars? Likewise, what’s the likelihood that supply or sewer mains will require dedicated camera inspections—and that those inspections will reveal defects leading to major outlays? I understand conditions vary by locale; are these worst-case scenarios common enough to justify my caution, or am I overthinking what often proves to be manageable issues?

Quote from @AJ Exner:

Hey Nicholas,

It depends on the lender that you use, but a true 'delayed purchase' should give you the flexibility you need to get the mortgage you need.

Is it a stabilized property or one that needs some rehab?

 It’s stabilized already 

Quote from @Chris Seveney:

Quote from @Nicholas A.:

I’m trying to buy a $150K investment property from a wholesaler. I plan to use $120K from my parents (not as a gift, but as a private loan) and $30K of my own money. I want to wire the money directly to the title company to avoid it hitting my account. Then, once the property is purchased, I want to get a mortgage (delayed financing) to pull out most of the $150K and repay my parents, keeping the remaining equity in my name.

However, the lender warned that if the $120K shows in my account and is traced to my parents, it could be a problem since gift funds aren’t allowed for investment purchases.

So I’m trying to find out:

Can this be done?

How should the private loan from my parents be structured so it doesn’t disqualify me?

if anybody can assist I would be open to working with them for the loan.

Anyone with experience doing delayed financing for investment properties or using private funds—please weigh in.

 1st you are saying your parents money is a loan - if that is the case then there should be a note and deed of trust/mortgage. IF not then its not a loan. 

2nd - you cannot refinance 150k, a lender will typically lend up to 75% on a refinance so they would give you $112k which would not pay off mom and dad - so answer is most likely no you cannot refinance. 

if it’s just a matter of posting another 8 grand to pay them off then I can do that. 

I’m trying to buy a $150K investment property from a wholesaler. I plan to use $120K from my parents (not as a gift, but as a private loan) and $30K of my own money. I want to wire the money directly to the title company to avoid it hitting my account. Then, once the property is purchased, I want to get a mortgage (delayed financing) to pull out most of the $150K and repay my parents, keeping the remaining equity in my name.

However, the lender warned that if the $120K shows in my account and is traced to my parents, it could be a problem since gift funds aren’t allowed for investment purchases.

So I’m trying to find out:

Can this be done?

How should the private loan from my parents be structured so it doesn’t disqualify me?

if anybody can assist I would be open to working with them for the loan.

Anyone with experience doing delayed financing for investment properties or using private funds—please weigh in.

I’m at a bit of a crossroads and would appreciate some honest feedback.

I bought my first rental in 2020 and a second in 2023 — both were decent investments, though I’ll admit there was some luck involved. Over the past 6–8 months, I’ve gotten more serious: read two books (not helpful), completed an online course (helpful), joined a mentorship (not helpful), and have been networking with wholesalers and investors online.

Here's where I'm struggling: even after this effort, quality deals — rentals or flips — seem very hard to find. Most potential deals I see are through wholesalers, but many aren't great, or you need a strong relationship to see the better ones. MLS deals seem too tight.

I’m starting to wonder if the only way to find consistent, quality opportunities is to fully embrace this as an entrepreneurial effort — direct marketing, cold calling, door knocking — which I’m not eager to do. I’m not a people person, and the grind doesn’t appeal to me. Flipping seems to require the same level of hustle.

At this point, I don’t know if I’m close to landing a good deal and should stay the course, or if I need to step back and ask whether this is the right fit for me. If I need to run a marketing operation to any extent to find deals, it may not be worth it compared to more passive options like investing in the S&P 500.

Maybe I’m missing something. Maybe you can do this without becoming a marketer/entrepreneur/realtor/people person. But if not, my way of currently doing it may not yield me enough returns to continually do it. Wholesalers, realtor.com, networking with people.

Spending time weekly for months and months or longer to acquire a property and merely make $300 a month cash flow just doesn't seem cost effective over the long term for me. I know theres debt pay down and other ways you get paid too but it doesnt seem super cost effective and I'd rather do other things with my time, even if they're not geared towards making money.

Question:
Is my way of doing this worth pursuing further, or do I truly need to build my own pipeline even if part time to succeed in this endeavor?

Appreciate any honest insights.

Thank you for your in depth reply. 

I will search for the fannie/freddie guidelines on allowing properties to be transferred into an LLC. If you have them handy, feel free to send them over.

I really wanted to focus more so on the risks of this. Are there caveats like certain banks dont allow this or certain states or types of properties or anything at all that would affect whether or not this can be done? Are there time limits on when this can be done?  I am essentially looking for anything that can be a caveat here. If I got called to pay off the entire property at once, I would be completely screwed.

Before I take any action I want to make sure I have all the details and don't run into any problems. 

I own some single family homes and soon to be some small multi family real estate. I want to put them into an LLC, but I don't know when. I heard the banks wont care if you do it and still pay them so they dont invoke their due on sale clause and expect payment right away.

When is best practice to do this? Please list any caveats I need to be aware of.

Quote from @Greg Scott:

I would look to cash-on-cash returns and equity capture as your two primary metrics.  Nobody can gauge appreciation with any precision so just ignore that.

Cap Rate is effectively meaningless on a 4-unit property.  Comparative Market Analysis or comps are used to value quads.  Commercial properties, including 5+ unit multifamily are valued using the income approach.  Cap Rate is a critical component of commercial property valuation.  

 Ok what’s an acceptable rate of cash on cash return and equity in this market? 

What are people aiming for, accepting, and avoiding on small multifamily 4 units or less, single family homes in terms of cap rate and annualized ROI in the Milwaukee and Racine/Kenosha Wisconsin areas?

Numbers would be before the property is stabilized and when its stabilized.

I am searching for wholesalers to connect with so I can get on their list and see what properties they have available.

I am looking in the Racine/Kenosha area in Wisconsin, primarily 2-4 unit buildings, although not strictly limited to that.

If you can help and would like to connect, please send me a message or reply here!