All Forum Posts by: Thomas Ackley

This sounds like a passion project and not an incoming generating project.

Without looking at the numbers, I would imagine you need an absolute cheat in one of the areas for this to make sense, monetarily. You'd need to acquire this for a steal, or be able to do the rehab for almost free or know you can charge a lot in the end. 

The end result sounds amazing, but what do you think the purchase price would be? How much would it cost to renovate the common areas of the facility, how much for each room, how much can you rent each room out for and how often can you rent them out?

@Ricky Listman Do you have a better idea / program for this type of lead gen model?

I see you're not from the area. Their email address is also in that link.

Go to the Open Records at:
2333 N. 49th Street
2nd Floor
Monday, Wednesday, Friday
7:30 am - 3:30 pm

They will charge you a quarter per page, or something that.

Or call them. I cannot post the phone number here, so I'll add this...


https://city.milwaukee.gov/police/Obtain-Accident-Reports.htm#.Xk7Z5ZXYqUk

@Adam Reek

Keeping in mind Oneida requires a 7 day minimum stay, I am still analyzing a property that is zoned residential. I understand the process for the tourist rooming house app, and think I’ll have my ducks in a row to get that approved. My question... If I’m going to constantly block off 7 day stretches, yet let the customer book a minimum of 2 or 3 nights, what 7 days would be best to constantly block off? The model I’m looking at will still work with low tenancy rates during the winter and I’ll make my hay during the summer.

Would Sunday through Saturday be the best bet? If I can’t have more than one tenant in the property in a 7 day stretch, I’d have to specify when the 7 day blocks are available.

I’m looking for some advice. Here’s my current sich.

I own a single parcel in a C / D neighborhood. it has a 3/3 duplex and a 2/2 duplex on the parcel. That makes it a non-conforming use property, so it’ll be hard for most investors to get a loan on the property.

I owe about $35k on the property and my best guess would be it’s worth around $70k - $80k.

There are 4 new water heaters and furnaces in place. 3 of the 4 units have been rehabbed to clean and liveable but nothing like the remodels which are described in the brrrr book. GRI is about $2,550 per month.

Within a couple months of buying the property, we were working on our list of needed rehab tasks to make it livable then I received 5 pages of violations from the city. The city worker seemed to write up the whole block.

After about 16 months from the date of purchase, I’d now say most of the work is complete and it’s up and running. One of the four units has had a posting tenant since we bought it. When he moves out, it will need an expensive turn. That’s my biggest expense that I can see coming, besides normal repairs and vacancies.

Gross yearly rent minus expected expenses (piti, PM, grass, snow, water) would be around $15k. I haven’t taken into account saving for vacancies or capex costs.

I think this area may be an area where rent and house prices increase over the next decade, but I definitely see the other side where the neighborhood is where it’s going to stay.

With vacancies factored in, I lost money in 2019, but the last two months finally turned around now that we finally got our projects done.

Question...

Should I hold on, enjoy the hopeful cash flow and expect lots of bumps or sell and reinvest right away? If I hold, I'll be working on a cash out refi in January to put down on a HML to start a brrrr. If I sell, it would be to get my equity out and would immediately reinvest.

My plan is to cash out refi and press on.

My goal going forward is to look for brrrr projects and rehab that are more in line with the model that’s spelled out by BP books, go for less cash flow, cap rates with better neighborhoods and equity returns.

Thoughts??? Thanks!!

Any updates to this idea from fellow MKE people?

I've gotten burned by the share-the-bill idea several times. I'm at $33-$45 per month per door with my two duplexes and I just eat the cost.

Dennis, I've been watching the market for a while. I currently have two duplexes on one parcel and it cash flows really well. I've had that for a year and a half. The area I am now looking at still has depressed property values but the places rent well. I know the neighborhoods throughout the city very well, as I have worked in the city for a dozen years and drive around in the city daily. I discuss the different options for rentals in terms of neighborhoods with my PM regularly.

Art, I think I get what you are saying. The prices can only get SO high in some neighborhoods. If I put nice stuff in there, I will be able to rent it easier, but even if I'm at the top of the comp range it still may not be enough. That is definitely a weakness of mine... not being good at running my own comps. 

My goal is to do two BRRRR's this year. I've got one cash flowing property, but all of our capital is tied up in it. I think I'm going to refi it so we have some fluid cash to go along with a HML for the next property.

As of right now I’m pretty set on a specific part of town going forward. I’m currently looking at buying duplexes or triplexes for $25k-$60k, rehabbing what needs to be rehabbed and refinancing. I’m confident I can find decent renters and I know what the rent is. When I run the numbers for the properties I’m looking at, they always come back as cash flowing. That part isn’t a concern.

My question is, how can I run comps if most of the recent sold properties aren't freshly renovated like mine will hopefully be? I'm concerned about not being able to pull money back out to pay off the HML if the comps don't come back where I need them to.

What’s a good book or two to teach me about running comps for this situation?

While chatting with other investors / bankers in my area, I’ve gotten feedback to look at a bit better neighborhoods. The cash flow on the properties I’m looking at is too enticing.

I think the neighborhoods I’m looking at are stable enough, but I probably won’t get the appreciation like in better neighborhoods.

Lots of thoughts and questions there... thanks for any input.