All Forum Posts by: Pete Woelfel

@Aaron Rosauer - congrats on getting started and a house hack is a great way to do that.  Its tough to comment on the amount of cash flow without knowing the other numbers though - like purchase price, how you're financing it, what you're estimating for repairs, etc.  There's definitely a rental market in that area and I know plenty investors are making it work.  
It will be interesting to see how universities adapt as the vaccine gets more widely distributed.  If many more people choose to attend college online, I'm not sure exactly what that does to the rental market in the immediate area.

I would highly recommend @Marcus Auerbach!

Congrats @Nathan Regina!  What part of Milwaukee is your property in?

Hi All - I have a couple rental properties but am humbly looking for advice on a scenario I haven't experienced before.

The owner of a duplex (2BR 1BA/1BR 1BA) next door to a duplex I own is 63yo, has had some back and knee surgeries and is experiencing a vacancy in the in the 2 BR unit for the first time in 15 years (and the tenant, who I knew took excellent care of the property and he was very passive).  I believe he was exploring selling before covid and his vacancy but the vacancy is increasing his interest in selling.  He owns the property free and clear and is entering his 28th year of opening so can no longer take advantage of depreciation.

I've read a bit about seller financing including this piece:https://www.biggerpockets.com/...

However, in this scenario, I'm not looking to take over a mortgage.  The seller mentioned he had another property but doesn't want to sell them both at the same time because he doesn't want to get crushed on capital gains taxes.

I'm looking for ideas of how to structure an offer to him that helps him while investing as little of my own capital up front as possible (maybe only rehab ~20k).  My initial thought is to structure something where I'd make him monthly payments of P+I for 3-5 years and then agree to refinance and pay off the balance - but have no idea what an appropriate split would be.  

As I said, the property needs about 20k in rehab, he told me a local realtor who I'm familiar with told him ARV would be ~230k. Zillow estimate is 245k and he's looking for 190k as is. Gross rents (pre-vacancy) were 1450, I believe market rents to be 1650 or a bit more. The property is in a suburb of Milwaukee (Wauwatosa) which has very strong schools and is an A/B area.

Any thoughts on how to structure something would be very much appreciated.

This is somewhat similar to what others have said, but my preference is usually to evaluate the competition more than to trust an online estimate.  Similar to Marcus, we usually get a fair amount more than what rentometer or zillow estimate.  I like to go to zillow, FB, rent.com etc where the tenants would "shop" for a place to live and see what else is available in the area in similar condition.  Depending on how big of a multi-family you're looking at, you could even stop in at a couple competing properties in the area posing as a potential tenant so see prices, condition and get a sense of vacancy.  Good luck @Israel Haugen!

Congrats @Brandon Capelle!  Where are these properties located?

We recently bought a duplex where the hardwoods in the upper where very squeeky.  Since we can't access the joists without going through the lower ceiling, we put luxury vinyl planking over the worst part (kitchen) and it probably reduced things by 50% or more.  Interestingly, I noticed it a lot while working on the property, but no potential tenants mentioned it during walk throughs.

Hi @Alan W.

Do you have a relationship with a solid property manager in Milwaukee?  Full transparency, I'm not in the mid-large multi-family game and from a pure numbers standpoint, I'm sure I'd agree with @Jon C. on one roof, etc.  That said, I have a couple duplexes in and around Milwaukee.  Where are you buying in the city for a 100k duplex?  Do you have a team that can advise you on neighborhood quality?  If you're in the wrong spots you need to worry about vacancy/turnover and repairs, anbd even if your PM will service it. Maybe you have a better deal source (and if so I'd love an intro!), but even off market I rarely see a duplex under $150k that is in a neighborhood I'd consider investing in. 

I know you live on the west coast - just my unsolicited 2 cents but might be worth the cost of a flight and a night or two in an airbnb or hotel or whatever you're comfortable with to drive around if you're not familiar with the city/suburbs.  In Milwaukee, there sometimes isn't a great distance between a very good and very bad neighborhood.  

Hi @Gregory M Carlson

I don't really know enough to give you a strong opinion.  No idea how hard it is to find a responsible bar owner to lease to.  A lot probably depends on the condition of the building, and the location.  Is it in a place where a bar would flourish or is it off the beaten path?  I also have no idea what the bar rental market is like so can't even guess at numbers.  My gut tells me that if I ran across a situation like this and knew enough that I was confident that it would provide sufficient cash flow, I would want to know that my other rentals could cover things in the event I totally missed my rent/quality projections.  That's largely based on not knowing anything about that kind of market though.

@Travis Hill - what neighborhood and/or zip code is it in?  I have places in 53222, 53208 and 53213 just wondering if its one of those areas?