All Forum Posts by: Tiffany Drahonovsky

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $234,900
Cash invested: $50,000
Sale price: $234,900

Unique find! This up and coming old neighborhood is close to festivals, the freeway, the airport, and lots of great food and entertainment. The parcel as it stands is an improved (inside) duplex with one tenant in place and a vacant former bar with living quarters above it on the same tax key. We plan to build out the bar into a single family home with 3 bedrooms, 3 bathrooms and a loft feel.

What made you interested in investing in this type of deal?

I see a huge upside to build this vacant property into a single family home, to either run as an AirBNB or to sell when we cash out refi. Plus, we have a duplex we can hold. We will be splitting the tax key if possible for max ARV on the separate parcels. Purchase price $234,900, SOW $200,000, ARV est $650,000 for the combined properties. It's a big project, but somebody needs to do it. Plan to furnish the duplex and rent it short term and then to furnish and AirBNB the single family (now vacant

How did you find this deal and how did you negotiate it?

I found the deal on MLS. It was a regular listing. I happened to know the seller, so I called him and we identified he wouldn't sell it for less than he had in it, but he wanted out. Wrote a cash offer, tried to fund with a construction loan (failed) used hard money to purchase it and now refinancing with a commercial lender to get out of the hard money and to secure rehab funds.

How did you finance this deal?

Private money for down payment, hard money for purchase. Didn't get the rehab funds with hard money due to shared tax key and appraisers having to see this as a 3 unit vs 2 separate properties.

How did you add value to the deal?

Rebuild the bar into a 3BR/3BA home, replace windows on duplex.

What was the outcome?

To come!

Lessons learned? Challenges?

Make sure you can exit out of any hard money deal BEFORE you close on buying it.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a Realtor, my partner is a Realtor and flipper. We are both great at what we do as we are investors first.

Milwaukee, WI and the surrounding area has abundant opportunity for real estate investing. We have many local and long distance investors due to the opportunity and communities here. Many investors are seeing growth in their single family flips, rentals and air BNBs. Multi families in the 8+ units are going at very strong, over market prices, yet but the smaller assets can still be snapped up for under $100K. Oh, and you get a cheesy agent when you invest here, with me. :) 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $45,000
Cash invested: $52,000
Sale price: $66,000

Bought single fam with tenant in place from the investing company I worked for. Paid them a $5K fee. I raised the rent and used hard money. I had no idea it would be so hard to refi a property at $50K value. I couldn't get it done. First seasoning, then amount. I tried to refi it into a commercial loan with another SFR of same value and that was difficult. I sold it, fast and easy to a friend/agent/investor. 22% ROI owning it 9 months.

What made you interested in investing in this type of deal?

This fit my buy box: under 1000 sqft, single fam, near southside of Milwaukee, 3 bedrooms, happy tenant in place wanting to stay that pays.

How did you find this deal and how did you negotiate it?

I was trying to wholesale it for my company. Couldn't move it with their fee on there, so I grabbed it. I paid them a minimum fee.

How did you finance this deal?

I used hard money from a local hard money lender that I know personally.

How did you add value to the deal?

All I did was raise the rent on this one and handle small repairs due to the difficulty I had refinancing it. Also hard to repair or update with tenants in place.

What was the outcome?

22% ROI in 9 months. Market timing was all this was, and buying well.

Lessons learned? Challenges?

Revised my buy box due to this bugger. I will need to buy more expensive assets or assets without tenants in place or assets with more upside if I need to refi as part of my strategy.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Mach 1 Lending.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $47,000
Cash invested: $52,000
Sale price: $66,000

Planned to hold bought with tenant in place, but got upset at tenant damage. Had a friend who was buying in the area and I needed the cash flow. Sold it a week after tenant was out, she's already got it rehabbed and ready to rent at market. I calculated 24% ROI in 14 months on this one!

What made you interested in investing in this type of deal?

I intended to hold the property, but it had some sinking and I didn't have the rehab budget to get it where it needed to be. The market appreciation and timing just worked out great for me when a friend agent/investor was adding to her portfolio and we have similar buy boxes.

How did you find this deal and how did you negotiate it?

Bought it from a local wholesaler, it was posted on Facebook. So much business is done on Facebook!

How did you finance this deal?

I used my own 401K money, withdrawn under COVID rules to pay back over 3 years.

How did you add value to the deal?

Honestly, I didn't do anything other than sit on this one. It got more damaged from tenants who had a violent domestic dispute than from when I purchased it. Timing is how I added value, and I bought it right.

What was the outcome?

24% ROI in 14 months. BOOM

Lessons learned? Challenges?

Know your buy box and be ready with a clean offer when the property that fits it comes up.
Do walk thrus of the property after any police incident.
Get a lease in place asap. I was sloppy on this one. I need better processes for onboarding new properties/tenants into these yet to be written down steps.
I also learned there's very little appetite for refinancing properties under $100K. The low purchase price bit me here, I had to wait 6 months to refi (seasoning).

@Elijah Brown way to go on knowing why a deal ISN't for you! I struggle with that as an investor sometimes, when I want something outside of my buy box. I admire your focus! 

Hello fam! I just saw this and loved the content. I

am happy to see my primary market, Milwaukee, WI is still an excellent place to live and to invest! https://www.kiplinger.com/arti...

I was looking for trending articles to post on Linkedin and found this great and recent article on affordability and median price article for real estate markets.
I was delighted to see that Milwaukee has a 2 for affordability - meaning very affordable, based on % of annual income required to buy a median priced home. 
The article link seems appropriate to post here. Moderators, if this is not allowed, kindly edit out. https://www.kiplinger.com/arti...

Hi Corby! Milwaukee and our surrounding counties are excellent for investing. We have strong employer growth with FOXXCONN, Amazon and Uline expansions. I have quite a few long distance investors who like my market and the personal service they get with my company. I'm happy to have a conversation about the market anytime! 

congrats! Have you considered other markets? Single families are doing very well in SE Wisconsin! 

Absolutely. My primary area is beautiful Milwaukee, WI and the surrounding burb's. While we do have very high crime areas (and sadly news stories about them) our great city is a melting pot of people and opportunity with pockets of very nice mixed into areas that are not so nice. We have variety and we have people of all walks of life who all need housing. Sale prices and demand is still incredibly hot all over our SE corner of Wisconsin. I had a property that sold same day this weekend! Not lowest crime area, not highest, either. 

I was just consulting a buyer yesterday about how to look up different crime areas. There are great prices to be had, and lots of cash flow. Rehab is significantly less, as higher crime areas do not drive the ROI on the high end rehab. To be honest, I have buyers who like the cheaper purchase price to get more doors. I have others who prefer better areas and think better tenants live in better areas.

I believe it comes down to knowing what your tolerance is for property damage (in and out) along with rehab costs, your experience and your goals. 
Since I have to site visit and show them all anyway, I do carry a taser and often bring my rescue pitt bull with me. I have considered a gun but I do not want the responsibility of locking it up, but I consider this often as just like with my dog, just the sight of my dog, or an investor with a gun at his hip keeps the riff raff away.  I do plan my visits to the rougher areas during daytime, and earlier in the days.  Be aware to drive defensively in higher crime areas, too. Be vigilant about your safety. But, If you have a friendly and purposeful attitude, I have had more folks wave hello than give me trouble and I stand out with my car and appearance in these areas. 

As with anything in sales- knowing what the buyer's needs, wants, criteria is the key to matching up the right asset. Working with knowledgeable local people if you are not in the market is very important as well.