All Forum Posts by: Peter Falk

Hi Isaac,

I guess one mo. to mo. risk is that either party can end the lease with proper notice, so you'd run the risk of a tenant deciding to relocate at an inopportune time (slower Fall or Winter) and could find people relocating and looking to buy a house and move out, so be there more temporarily (with more turn over cost, etc).  You could look into rent comps, but would think a tenant wanting move out flexibility would be willing to pay a higher/premium rent for that flexibility.

With Madison/Dane County rentals are in strong demand, especially if somewhat affordable am sure you'll get lots of interest.  

Yes, it certainly sounds like a high water table area to get that much water constantly filling up the sump pump.

Just a reminder that in the winter to unhook your long exterior sump pump drain house if you have one outside, as the water inside will freeze in the line and the water the sump tries to push out will have nowhere to go and run back into the sump pit.  I know that makes erosion around house worse in the winter as water shoots out closer to the foundation, but that's what I was told to do and makes sense to me.  Good luck

In both my WI 2-unit properties, I just note in leases for BOTH units that tenants are responsible for snow removal of the walkways and off street parking.  I leave it up to them to take turns, hire it out, etc. and note that they will be responsible for any fines for lack of doing this.

So far the tenants seem to figure things out and get it done.  I've  never had tenants decide to hire it done and split the cost, but in theory they could do that (or as stated, I could estimate the cost, increase the rent and hire it out).

At least in our market, you may find that "cheap" homes are priced like that for a reason, and all will likely have some significant condition issues.  You could talk with agents at open houses working in the price point you are looking in and maybe find someone you want to work with that way, or many agents get leads from referrals from past clients, so could ask friends/family who they worked with if they've bought in that area recently.  If it's a small market with a few local agents, could also just meet with a few and work with who you like the best.

Any agent (buyers or sellers agent) should be drafting the offer for the terms you are comfortable with buying for (price, contingencies you want/need, etc.).  If you plan to buy with conventional financing, heavy fixer-upper homes that have major issues likely won't be financeable in their current condition requiring a cash purchase or more unique shorter term/portfolio bank loan.  Good luck.

The rise in interest rates (owner occupied rate around 6% down from 7%ish in Oct) has taken place in our slowest winter sales season, so will be interesting to see how the market is looking as listings and sales ramp up in spring and summer.  Overall, I think most predict the Madison are market to remain a sellers market as far as general low inventory levels remaining and demand still for the area.

In the Madison area, single family homes seldom make sense as rentals based on rental income to prices and in the City of Madison, short term rentals have lots of restrictions, so mo. to mo. furnished rentals would be my advice to try out if you want to try to boost income, but also deal with more turn over.

Happy to talk more specifics if you decide to focus on Madison, WI area. 
  

Just seconding that in the Madison, WI area, you seldom see small condos around $120k. Our higher home prices generally make single family rentals not make much sense for any cash flow (with Madison short term rental laws not making air b and b much of an option either). Last year of the 5,410 single family sales in the MLS, the median sale price was $419k.

Also, in my experience, land contracts are for a higher than market rate, and usually sellers only want to hold the note for 5 or 10 years (don't want to be the bank for up to 30 years) and just want to give a buyer time to get lined up for typical bank financing.  If you are confident in following the land contract terms, it should work (my parents bought one of their WI homes on land contract), but would always be watching for bank financing and if better terms can be had, can get a loan that would pay off the land contract balance.

I'm sure the article highlights the fact that you can get an owner-occupied loan on a 2-4 unit property (same rate/terms as if you were just buying a single family home to live in) so if you can qualify for what I assume will be a larger payment (more expensive purchase), I think you may find it worth it to 1) get more income coming in from multiple units and 2) you have your own private apartment to live in (not sharing a kitchen, etc. with roommates).

Good luck!

Yes, in WI you need to train under a supervisor.  I was lucky to be able to train with my neighbor.  I know there is talk of creating a virtual mentor program (I think essentially where you do a case study online) but nothing is finalized there yet.  There are various license levels you can read about.  I also have a real estate broker license and was shocked to see how much more challenging it was to get an appraisal license.  One good item though is that you do not need to do appraisals for a client to get experience, so can do them for your house, friends property, etc.

I'm in Madison, WI and have a 2 flat heated by 1 furnace and 1 water meter.  I just divide the gas bill up and each unit pays a % based on unit size and I divide the water bill by # of occupants and bill each unit accordingly.  It does take me a bit of time each month to calculate and scan and email the tenants copies of the bills, but has worked well and covers the building utilities (electric is separately metered).  

You could also just collect an average/estimate and hope it's close enough or maybe in the lease say at the end of the year, you will total things up and collect or credit any balances due/owed.