All Forum Posts by: Trevor DeSimone

Quote from @Michael Cashman:

This was a beautiful post this is what gets me hyped thank you for sharing the lesson about seeing the opportunity with the wholesaler and the lesson about the area.

 Thanks Michael,

Many more lessons to be learned, I'm certain of it!

Fellow travel nurse here; I'm paid as a W-2 Employee, and I'm going to assume you aren't paid as a 1099; Which would not be correct since you don't meet the definition of an independent contractor as a nurse. When I was purchasing rental properties via commercial loans, the bank really only cared that I more so had a consistent income and a few paystubs to verify; However you're more so discussing purchasing a property outside on an LLC, in your own name, to house hack. When I attempted to purchase property, like a primary residence, I ran into issues during this process and I did have a few lenders turn me away until I hit a one year mark of strictly travel nursing. The lenders cited they needed consistency in my income. Important note would be if you plan to continue travel nursing, don't obtain a staff job in-between travel contracts, it may void the income you earn from traveling, as the lender would view your occupation as inconsistent. This may reset the clock if you have a break in traveling (The clock being one continuous year of full-year of traveling) meaning lenders may turn you away until you have a few year under your belt. All of this information pertains to my personal experiences and you may find yourself a alternative scenario depending on the lender you choose to work with. Better lenders will assist and guide you through the process. Make sure to accurately define travel nursing for them, they may have a limited understanding of the profession. Hope this helps!

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Milwaukee, WI.

Purchase price: $63,000
Cash invested: $29,400
Sale price: $129,990

Originally destined to be a BRRR property, or a long term hold. We had excellent cash flow in the property at roughly $650 a month fully occupied, however I had all of my renovation costs tied into the project and couldn't access the equity, doubled with the fact the neighborhood wasn't the best and I didn't see much of a future for appreciation, we choose an alternative exit strategy and decided to flip the property.

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

The property made sense; but the Wholesaler was from out of the country, I don't think anyone particularly wanted to work with that wholesaler because of this reason. Where others were apprehensive, I saw opportunity.

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

Facebook marketplace, negotiated via messenger.

How did you finance this deal?

Commercial Loan; 20% down and 25 day closing

How did you add value to the deal?

I had two separate contractor crews, one cleaned up the basement, pressure washed and painted the basement, along with painting the stairs and common area hallways.

The other crew removed a old smoking balcony from the rear of the property, did some siding repair and painted the entire house. They did the same to the detached garage and also rebuilt the front steps.

What was the outcome?

On market currently for $129,900! We'll see how it goes, worse case, I can keep the asset until its more favorable to cash out refi, all while enjoying high monthly cashflow.

Lessons learned? Challenges?

Lessons learned; SO many. KNOW YOUR NEIGHBORHOODS. Three blocks over and this property would've been worth upwards to 150K. The neighborhood was rough, very rough. But there's a huge need for housing and we're meeting the demand. The whole reason I choose to exit the property all together was the regret of purchasing an asset in a C-, D+ area.

Spent a lot of money on the basement, which came out amazing but not sure how much actual value that added to the house.

Seeking a hard money lender to work with facilitating a quick closing on a duplex within Milwaukee.

Any lenders that can work with limited documents?

Any recommendations? 

Are any of these lenders hard money lenders? Or can facilitate a quick close, in under 10 days? 

Quote from @Wesley W.:

Do you allow tenants to utilize your basements and garages?

No.  No tenant access to my basements.  Rent out garage separately.

What do you allow in your basements and garages?

See above.  I do have a clause in the garage rental that says they can't store things that are hazardous, explosive, grow plants, keep animals, weird stuff like that.

How do you separate/split the area between the tenants, (assume there are no existing barriers or dividers)?

You could section off parts with framing and chicken wire, and use padlocks w/hasps.

Should I be charging additional rent to use these areas?

Yes. Yes. Yes.  Anything extra, costs extra.

How should I enforce whatever policy I implement?

Have it written in to your lease, which should be month-to-month, so if they violate it for something other than non-payment you can easily part ways and disentangle them from your life.

 Hey Wesley, 

Thanks for your reply, I know numbers vary based on assets and location, but what would/do you rent a detached two-car garage for? Also good tip about the clause in your lease so they don't turn the garage into a grow farm or a mechanic shop. 

I'm taking into consideration your methods. The tenants use the basement for laundry, and while I don't think restricting access is necessary, I think I'd prefer no storage in these areas. 
  

Quote from @Luis Torrico:

My PM has stopped replying my texts and answering my calls.

He was coordinating a rehab and he was also finishing up an eviction.

His last message was that he admitted he was slacking off and wanted to talk to make things right.

Three weeks later and *crickets*

Not sure what to do. I have a PM contract until January 2023.

Has anyone experienced anything similar?

I invest out of state with a property management group in Wisconsin (I'm from New England). I would start vetting alternative PMs immediately. I've never had a situation like yours and while my management group isn't prefect, if we had a drop in communication of three weeks, I'd fire them. Not sure what your vetting process is like for property management. Also, a contract that states a time period your locked in with your PM seems like an odd practice. If you want a different management team you should have that flexibility, review your contract terms and see what your options are for cancellation. Your PM isn't exactly fufilling their obligation to you or your property. 

Hey Bigger Pockets Fam,

Need some advice in order for me to implement a policy for a duplex basement and a detached garage. The background is I purchased a multi-family property, a stacked duplex in the outer suburbs of Milwaukee. I inherited the tenants, which may not have a great idea. They were long-term tenants, which sounded great on paper, but I inherited I a lot of bad habits. (One I'm currently evicting). The basements and garage were disgusting, years of trash (poor management prior to my takeover) trash bags were piled in the corner, and the dryers didn't even have vent hoses, they just vented straight into the basement. The garage is no better and is just completely filled with junk, car parts, and used oil, which may be from tenants even before the current tenants I have. The basement does have washer and dryer hookups for each tenant. 

I spent some time and cleaned the majority of the basement. Removed all the trash, fixed the lights, proper dryer venting, etc. I have a trash collector coming to broom-clean the garage in a week or two. 

Once the basement and garage are completely empty and clean-ish, I don't have an exact policy to implement for the existing tenant and new tenants that will eventually be there. I don't want a repeat of bad behaviors. I don't want it to be a storage area for junk and for trash. I would allow storage in the area if it was clean and organized but I'm uncertain if tenants will respect the space. Not to mention the garage as well. 

Do you allow tenants to utilize your basements and garages? 

What do you allow in your basements and garages?

How do you separate/split the area between the tenants, (assume there are no existing barriers or dividers)?

Should I be charging additional rent to use these areas? 

How should I enforce whatever policy I implement?

Hey Miguel, 

I'm an out-of-state investor with two properties in Milwaukee myself. I'm in the same position you find yourself in. Relatively slow, and looking to scale. I've been considering sending mailers out to prospective sellers in the Milwaukee area. As a buyer, I see a lot of volume on certain Facebook Market groups and look for properties there consistently, you could find sellers there if you aren't already involved in those groups.