All Forum Posts by: Ryan Reynebeau

My partners and I are discussing placing an offer on a duplex that has an in-ground pool fenced in on one side of the property. Only one unit in this duplex has access to the pool, as the back yard is fenced off appropriately per unit. We have differing opinions on the value and liabilities that this pool brings to the property. This duplex is currently occupied by a couple and their son - the couple on one side and the son on the other. Therefore, there is no relevant rental history that we can access. 

Based solely on our realtor's estimated rent for each unit, the numbers work out great, even with conservative estimates on costs. We would be doing an owner-occupy for 1 year, so that would give us the option to test the market for the unit with the pool, or spend up to $7,000 to remove the pool in that year. 

Has anyone had experience with rental units with a pool in the midwest? Do you think that the pool adds value to the unit, even considering a possibly higher vacancy rate? 

I appreciate the advice!

Thanks for the insight, @Marcus Auerbach, and I like the idea of a house having the "right things wrong" - I like that! 

However, the reason I've kept this particular house on my radar is if - and only if - I end up with a killer deal. I will gladly walk away, but I want to be prepared if the right number presents itself. After all, everything has a price. It's been listed for a long time and I think most people would not touch it. I still need to consult contractors to see if something like this would even be worth the time and effort of restoration, though, so that will be my next stop. 

I came a across an upper/lower home for sale that seems like it would be a great candidate to BRRRR. It needs quite a bit of work, but is in a good location and is a nice style home. However, I found out that this home was physically moved from a different location in Wisconsin at an unknown time. The current owners had an inspection done and showed many problems, including sub-grade shifting, cracked walls and ceilings, negative grading, and several other issues stemming from these.

Has anybody every done work with a moved house, and what was your experience? 

@Guifre Mora - I appreciate you taking the time to organize this all in front of me! That was very kind of you. And thanks for bringing it back to a business discussion. I may press on him a little more to provide some of this info, but I have a feeling he won't, in which case I'll move on. 

I am looking for my first deal in real estate, and found a post on craigslist in my area that I though had very good potential. It is the first home that I am inquiring about. There was no indication that the seller was any kind of investor or if he was just a homeowner. I reached out to the seller via email with some very basic questions about the property and told him that if things look right, I would be happy to make a cash offer, albeit that I would not be able to offer the full asking price of 95k. I did not disclose the amount I would be willing to pay. 

He replied about 5 minutes later with a message that had a hint of intimidation (keep in mind, I have never made a purchase in the real estate space, so maybe I'm overthinking!). Is it against the forum rules to post his response? Well, I posted it below. One of my questions was if he could provide the rental agreements from the current tenant (paying 595) and for a past tenant of the unit which could "easily rent for 995". I also never mentioned a comp or Zillow, so he's assuming things about me (Little does he know, his assumptions are correct...). 

I looked him up, and indeed he has a website and a real estate LLC. Just my luck to run into an experience RE investor for my first inquiry! However, something still seems a bit off with it.. maybe a hidden problem that he is trying to pawn off. Either way, I left a nice message that I would talk with my partner about his "rock bottom" price (still not disclosing what my offer would be) and how we could make the numbers work, and then get back to him in a couple days unless we couldn't meet his minimum, in which case I wouldn't waste his time.

Seller's Response:
"Yes to all your questions except the written leases. Previous owner did not believe in written leases and upper unit tenant is vacating by April 1st, I hope. Otherwise is rented for $595/mo +utilities for the upper. Lower unit is vacant and I have not rented it yet but would easily rent for $995/mo, maybe more depending on improvements that are done. I don't need to sell the house and am prepared to fix it up myself as I am also a licensed contractor. But that being said, I also have about 10 projects on the backburner and just wanted to see if someone else wanted to take this one over. Hence the reason I would sell it. My rock bottom price is $86,000 AS IS and won't entertain anything lower than that. I can rerent the house with minimal work and cashflow like a banshee on it. If you are looking at zillow for comps I would suggest you look at actual MLS comps instead for 1624 square foot 5 bedroom 2 bath homes to see the real after repair value on this property. If you rely 100% on zillow, take note on how I influence that value in the next 2 months and you will see how it can be manipulated. Previous owner owned it for 30 or 40 years so zillow doesn't know what to do with that information, or I should say lack thereof."

Thanks for the input. 

I have been "thinking" about getting into the real estate business for a few years, and only over the past few months have I actually been actively trying to learn through books, podcasts, and of course BP. However, I still would not consider myself to be started down the real estate journey. I don't believe I've gotten to Day 1 yet. As a newbie who gets both more overwhelmed and more optimistic the more I learn, I am excited to begin thinking about what my Day 1 action is going to be, which makes me curious; which point in your journey do you consider to be Day 1?

As a preface to my own journey, I am currently a renter living in Chicago, and do not plan to invest here in this market. I am originally from Northeastern WI and plan to move back there in spring 2021 and get stared in "my own backyard". I originally planned to start by house hacking a duplex, but the more I learn about this profession, the more anxious I get to get started in other ways, before I move. 

@Andrea Weule @Andrea Weule - Thanks for the recommendation on Milwaukee. It certainly is not too far away, and my sister and her family live there, so I've at least got that connection. Do you do most of your investing on turnkey properties? I would definitely be interested in that lender. I will make a note for when the time comes!

@Jeremy Anhalt - Thanks for the feedback, and confirmation that the Fox Valley is a good area. I always hear of others' success in California, Denver, Arizona and those hot markets, so it's made me hesitant to get into the Fox Valley. 

@Corina Eufinger - I just don't have enough info on the utilities aspect, so thank you for bringing that up. I really need to get a better idea of what that number might be, and good point about including it in my vacancy calculation! I may reach out about your PM recommendations when the time comes... so far that's on my "obstacles" list. 

@Sheree Wegenke - Thanks for the welcoming, Sheree! Did you hold onto your property in Milwaukee? What area of Green Bay are you in? Flipping is a bit intimidating to me, but I'm definitely interested in the owner-occupy approach that you are taking, hoping that I can have 3 properties in my name after 3 years as a good foundation. 

@Andrew Geiwitz - Thank you for the feedback on my spreadsheet. Honestly, for my first purchase, I was looking for something where I could just not be cash-flow negative and get my foot in the door. So less likely a rehab and more likely along the lines of turnkey - and it seems like I could make that happen. The $2,000 up front would more or less cover minor cosmetic upgrades and an initial holdings for unforseen capex while I build up my account monthly with the $200 expense. Or for anything that needs to be addressed after inspection. Not sure yet if that's a realistic approach or not... As far as the lender, I will absolutely take your recommendations when I get to that point!

@Randall Wolff - Thanks for the recommendations! I've mostly been considering building my portfolio by doing owner-occupy, but recently been considering just buying property for the purpose of immediately putting tenants in. I will look more closely at BRRRR. I actually have the book by David Greene, but haven't cracked it open yet!

Hello all - I've been planning to get into some real estate investing in the form of buy-and-hold for some time, and decided that a good first step would be introducing myself here on BP! First question - how do I upload a photo!?

I'm currently residing in Chicago, but plan to move up to the Fox Valley area of Wisconsin, Oshkosh, Neenah, Appleton, even up to Green Bay. I've been looking for some time at multi-family units with the intent of owner-occupying when I move back up to the area. However, nothing is stopping me from getting into the game before then. I'd like to share an analysis of one property to make sure that I'm on the right track; see below. Most of the info I was able to get from the MLS listing.

Looking forward to further interactions with everyone!

Regards,

Ryan