All Forum Posts by: William S.

A lot of great responses. Thank you all! I've decided that out of state investing is not for me and will be looking for a local duplex as my first entry point into investing. It's a better fit for me at this point.

@Peter

I've mainly been looking at West Allis, St. Francis, and Waukesha. Northern Milwaukee looks/is really rough... The properties in Milwaukee seem to always need a lot of work, and cost more compared to Kansas City area...

@John

No thanks!

@Adam 

I have been looking up Milwaukee Turnkey companies (haven't found much), zillow, trulia/spotcrime to find good/bad areas, biggerpockets. Overall have found very little, compared to Kansas City. Side note: Originally from Kansas City and have lived in Milwaukee for a few years.

I have been in contact with a turnkey provider and found a property that I'd like to get your thoughts on. 

Here's some background:

- The property will be an out of state investment (Independence, MO).

- This will be my first rental property (buy and hold forever type of person).

- Neighborhood class: C (this is my opinion).

- 3 Bed, 1 Bath

- Age of roof, HVAC, electrical, plumbing (only says newer, will dig deeper later. My requirements would be that these are new items).

- Recently renovated.

The numbers:

- Purchase price: $54,500

- Rent: $800/m

- Down payment: 25% ($13,625)

- Loan: 30 year fixed at 4%

- Taxes: $60.92/m

- Insurance: $50/m

- Vacancy: $80/m (10%)

- Repairs: $80/m (10%)

- Property Management: $80 (10%)

- Mortgage: $195.14/m

Total Expenses: $537.72/m

Projected Cash Flow: $262.28/m

Concerns and more:

- I am concerned about this working with the 50% rule?

- I'd like to stay in B class neighborhoods, but cannot find any that come close to my $300/m target of cash flow. However, theft/crime seems to be everywhere and I would be taking the necessary steps to avoid someone from stealing my water heater/copper, etc...

- I've noticed that the sweet spot for purchasing cash flow properties is in the $50k - $75k range.

- I'd prefer to invest local (Milwaukee), but the high property taxes and renovations needed are killing my cash flow targets. This is why I am looking elsewhere. High taxes are against my morals...

- My investment strategy is to purchase three cash flowing properties and hold onto them (same market/city). I'd eventually be paying off the mortgage before bigger ticket items need to be dealt with (roof, etc). To do this, going over $75k per property isn't going to work for me. I also would like the smaller mortgage amount.

How does this deal look for a first time investor? One of my other strategies is to purchase a duplex and live in one side, but the high taxes are an issue where I live...

I've seen a few investors speaking specifically about Kansas City. I'm from there, and the areas they're investing, I wouldnt touch (east near Troost/Paseo). I'm all about finding good cash flow one day, but with a long term mindset.

Hello All,

I'm just getting started in investing and have been reading several financial blogs lately... They all seem to be jumping for joy on their cashflow property that is bringing in $300/m net that cost them around $50,000 to purchase. These are out of state turnkey investments that they say are in a "C class neighborhoods," however I'd disagree. More like war zones if you'd ask me.

I haven't been able to find any of these bloggers/investors who have held their turnkey investment in so called "C class neighborhoods," for more than a year... Does anyone have a similar investment that has stood the test of time? Owned it for more than 5 years roughly? I'd be really interested to see how these investments last once you factor in a longer time horizon, allowing for theft and bad tenets to do damage...

A house that cost only $50,000 that brings in $300/m sounds great, but... In those kinds of neighborhoods...? Not sure if that's profitable long term. Thoughts?

Thanks!