All Forum Posts by: Troy Owen

If you had to "fire sale" the property in 6 months for some unforeseen reason can you sell it and get your money back?  If that is realistic then I think you'll be ok.

Can you find a similar deal in that area for $50K?  6K is not a huge number but at the same time don't force the deal.  There will always be another deal. Good luck.

I buy at the current value.  It happens all the time with Multi's where the seller talks about the upside on rent. If that neighborhood or building can command an extra $100/mo per unit then why aren't they getting this increased rent?  As the buyer you have to incur the cost of the turnovers. You have the cost of repairs, vacancies and you will be collecting lower rents until you get the building turned around.  

@Kimberly H. Some states do not require you to provide a reason.  You may want to contact your local apartment association for your answer.  Its hard to say with Illionois :)

I know people who charge $20 and even $50 application fees.  The $50 app fee is the exception not the norm. That is in a high demand/high rent area.  A $20 application fee is more realistic if it includes their credit check.

@Theresa W. $850 rent for a single family home is pretty low in Milwaukee; especially if it has 3BR. Prices are very reasonable but property taxes are very high in Wisconsin.  You just have to factor that into the deal.  $1,400/yr property taxes in this area is extremely low.

-Troy 

Arthur, I'm not sure about Illinois but some states allow a non-refundable application fee.  It pays you for your time and also helps to weed out anyone who isn't serious.  As far as the credit checks, I use a service by one of the big 3 credit reporting agencies (message me if you want the link). The down side is that it doesn't give you a full report but you get a score and it tells you the positive and negative issues affecting their score.  What I really like is the applicant pays for the credit check.  You send them a request to view their credit score and they pay approx. $17.  I've had people in the past that never respond to the request for a credit check .  If they don't respond you have your answer.

-Troy

Charles, 

@Ed Riggenbach is right and that house is likely in a rough neighborhood.  I know the Milwaukee market.  Feel free to contact me and I can give you the run-down on the neighborhood. Knowing your numbers is great but there are other variables to consider.

-Troy

Jason you want to start showing it right away.  The peak rental season in this part of the country is essentially March through September.  You can rent out units anytime of the year but there is much less activity after September.  Personally I would make your next lease less than 12 months long because if they do move out at the end of the lease, I would rather look for a new tenant in July than October.

It is difficult to show a property that is not rent-ready.  Would you sign a one year lease with a guy you've never met who just started the demo on a home in that condition?  It doesn't mean you can't try though!  Just make sure you can follow through on your promises if you do find someone to sign the lease in the early stages. 

Since you have a couple of weeks, make sure you are ready to roll on day 1 and focus on moving up the completion date because it should be easy to rent after all of the work is done.  Good luck!