All Forum Posts by: Seth B.

My experience is that all smokers will leave a smoke smell in your apartment. Even if they smoke outside, they will be covered in smoke smell. Then they hang up their coats and hats in the closet. They put their smoke-smelly clothes in the laundry room. And I can tell you that a non-smoker who is sensitive, who comes to view your unit will absolutely smell that smell, even if you have cleaned and painted. As soon as they walk in. And then they won't rent it.

So, my advice is no smokers at all, even if you are sure they will be the perfect smoker and never smoke inside and never leave a butt on the ground outside (or their smoking friends). Or that while smoking outside, their smoke won't drift inside. Never happen.

This is exactly why I have a zero tolerance for it, and wanted to make sure I could discriminate against it. :) Thanks!

1 Vote

Originally posted by @Nicole A.:

@Seth B.

Yes, you can ask potential applicants/tenants if they are smokers or not. Don't get too attached to the idea that any of your rentals will stay immaculate regardless if a person smokes or not. You're setting yourself up for disappointment.

Yeah :( I know it's going to get dirty no matter what, but I absolute despise the smell of cigarettes. It's actually one of the reasons I'm so pumped to be owner occupied so I can move out of my crappy apartment where the tenants underneath us our chimneys lol.

It's nice to know I can deny people based on that though. Thanks!

1 Vote

Hello All!

Going to close on my first duplex at the end of June! Woohoo!! Finally going to be entering in the ranks of you guys :D

I know I still have a couple months before we even move in, but I want to start working on all the things I need to get in place so I'm ready to go and have a solid tenant when we move in (we put in contingency to be able to show the place off before we move in).

Before I can start showing the place, I'd really like to get a solid lease in place first. I've been told there is an apartment guild or something that can help put that together. However, I thought I'd ask the community on their ideas/best practices before I throw a bunch of money at some group.

So, what's the best strategy for putting a lease together?

Thanks!

Seth

0 Votes

Can I openly ask people during a walk through if they are smokers, or to be more proactive, when I'm screening them on the phone. Can I openly ask them if they smoke and if they say 'yes' I can end the conversation right then and there? Living in Wisconsin where it can get to -20 below outside on a regular basis I'm not going to risk the chance of any tenants being smokers as the place I just got is in immaculate condition and don't want any kind of smoke inside.

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Originally posted by @George N.:

All depends what your goals are. Had I asked about some properties I bought a few years ago the thread would have gone a lot like this one. A tad shy of the 1% rule but a good area in a solid high growth market. People telling me it's crap. Had I listened I'd be out 300K plus. Now that doesn't mean this will always turn out to be the case, it was a unique time in history, but still.

Depending on what you want this could be fine. Lets say you live in the unit for 3-5 years, gain some management experience, and move out and turn it over for professional management. Fast forward 15 years.

Madison is a solid growing market, this a is a good neighborhood so +/-4% appreciation a year on average seems very reasonable. Lets say you've raised rents the same amount. The place is now worth something like 375K. Your rents are probably like 3700 a month (I'm doing very rough top of the head ballpark math) but your mortgage payment (at least the principle and interest) is the same.

15 years in you owe about 115K on the place (assuming you put 20% down) so you have about 260K in equity.

Lets assume you never saw a red cent of cash flow despite the fact that your mortgage payment stayed the same while your rents increased. You're still sitting on a quarter million dollars off of a +/-50K initial investment. Find me an investment that will get you a 5x return in 15 years. This is the power of real estate investing.

Of course, you have also enjoyed the tax benefits of depreciation and learned the business a long the way. Your purchase has given you experience and credibility with lenders and others and propelled you into other investments. Your second deal was better than the first. The third better still.

If you're looking to live off REI in the immediate future this is probably not the best way to tie up 50K. But if you have 50K, a good job, will have another in a few years, and want to do something like this 4-5 times on your way to retirement you're likely to do very, very well.

I think there is a little bit of a disconnect on this site amongst the average investor out there and the full-time cash-flow only people who are, naturally, the ones who make up the bulk of the posters.

Thanks George, yes that is exactly what I was thinking. I guess we'll just see how it goes, but thanks for the support!

0 Votes

Originally posted by @Account Closed:

Seth say thank you to this man. and take this piece of work as advice when you are looking for your next property to not fill up this forum with ridiculous deals.

C'mon man your smarter than that...

Look "man" I understand the numbers aren't that great. What I do know is the areas around Madison. I thought there might be something to say for that and justify the higher pricing (guess not). I always figured this was a friendly environment for people to discuss deals. I wanted to do my due diligence and double check with a whole community as this is my FIRST deal.

I do very much appreciate what everyone has said on this forum so far. Especially Aaron taking the time to run the numbers through his spreadsheet.

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No we were looking at putting 5% down, so something like 14K. I guess I'll just have to keep looking!

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Ok here is the thing guys... when it comes to properties in Madison. The only ones that come kinda close to the metrics you are mentioning are in rougher parts of Madison. I'm really not in the mood for or having to deal with any bad tenants or just rough neighborhoods in general.

I have been looking on and off for awhile at different properties, and nothing really comes much closer to the ideal metrics. Anything under 200K is in a not so good area. Everything here in Madison is pretty darn expensive unless I'm missing something?

0 Votes

Originally posted by @Christian Bors:

I agree with Barbara. Gotta know the other info. Are utilities included or separated? With taxes, insurance, water, trash etc... this property might be negative cash flow, however you need the other info to make an accurate analysis.

Also, whats the condition of the property? Is it older (1900 built)? Does it need renovation to get 1300? You should include vacancy of at least 1 month, plus repairs, cap ex. All of this needs to be included in your analysis.

House is 40 years old. It also just had a new roof put on it. I haven't had any kind of inspection on it yet. So I'll have those deets for you soon enough :)

0 Votes

Well it's really in pretty good condition right now. It just needs some updates here and there, and we would do that over the first year or so. The long term tenant is in the 850 side currently, and because this is my first time I'd rather just let her live there another year before I move into the cheaper side.

This will also give us time to make the updates to the kitchen and such. We would also play the roll as 'management'. The place just had a new roof put on last year I believe. It could use some flowers and some outside 'sprucing' up.

$1600 is with Taxes(5000/year) and insurance (1200/year).

Taxes do seem high, but the thing that is appealing about this place is that it is in a very nice neighborhood. I would be very comfortable finding good tenants in this area. This is also a long term investment that we plan on having for a long time :)

0 Votes

All Forum Posts by: Seth B.

Seth B. has started 13 posts and replied 38 times.

Post: Should I rent to a smoker?

Post: Should I rent to a smoker?

Post: How to create solid lease in Wisconsin?

Post: Should I rent to a smoker?

Post: What do you guys think of this deal?

Post: What do you guys think of this deal?

Post: What do you guys think of this deal?

Post: What do you guys think of this deal?

Post: What do you guys think of this deal?

Post: What do you guys think of this deal?