Let’s Get One Thing Straight About “Waldo…” (A Follow Up to my Debate with Ben)

by | BiggerPockets.com

If you listened to the most recent BiggerPockets Podcast episode with my good friend Ben Leybovich (If not… click here and listen) you’ll recognize the word “Waldo” being tossed around quite frequently.

For those who don’t remember, “Waldo” is the nickname Ben Leybovich gave my recent triplex that I talked about in How I Found, Analyzed, and Bought an Ugly Purple Rental Property.  Ben affectionately named it “Waldo” (in this article) because it stood out in a crowd, much like the beloved cartoon character Waldo who hides among the masses but stands out once you recognize his shirt.

Basement Apartment

I truly believe this “Waldo” discussion is important for new investors to hear, because it’s something that most people never would. It’s no secret that I’m a huge fan of the BiggerPockets Podcasts. Yes, I’m biased because I’m the co-host, but the fact is: the information discussed is far better than books, seminars, TV shows, or other forms of education people take. This is real life stuff, that real life investors are dealing with.

Therefore, although much of the Podcast may have felt like “Ben bashing Waldo” I want to be clear that I LOVE this discussion. Whether or not you are Team Brandon or Team Ben – the fact is, because this discussion is happening, YOU are growing as an investor. I’m growing as an investor. Ben is growing as an investor. That’s what BiggerPockets is all about – growth through community.

Ben’s Beef

So what, exactly, is Ben’s beef with “Waldo?”

I believe it can be best summarized as:

The property is “non conforming” – meaning it’s not a traditional normal property because it was designed as a single family house and later converted to a triplex, which can lead to large unforeseen problems.  Therefore, newbies should not buy properties like this because it contains a greater degree of risk.

Where Ben Is Absolutely Right

As I mentioned on the Podcast, I’ve definitely blown my budget on the property.

When I first bought the property, I wrote that article “How I Found, Analyzed, and Bought an Ugly Purple Rental Property” and in it, stated:

“My total estimates for repairs are about $5,000, most to fix the chimney leak, fix the drywall, paint the windows, and clean.  This might be a little light, and I’m prepared to spend up to $10,000 if needed, but $5,000 will get it rented now.”

In reality, I’ve now spent closer to $14,000 on the property.

So what went wrong?

A few things:

1.) Difficult Contractor – I’m not shy about talking about my difficulties with contractors in my area. Basement ApartmentI tried out a new contractor on this project, got a bid ahead of time, and let him start work.  What was supposed to be a two week job turned into a six week job, which lead to some increased holding costs, adding roughly $1000 to the costs.

2.) The Plumbing – As I mentioned on the recent Podcast, plumbing was probably the most expensive fix. You see, we rented the basement apartment out for $525 a month to a nice young couple who loved the place. At first we didn’t notice many problems… but once we started doing some work to the main house (upstairs) we began to get calls about the water draining REALLY slowly. We hired a plumber twice to come out and try and rooter the drain, and both times it cleared and was fine. For a day or two. Then another phone call. Finally, I called another – more expensive – plumber. He put a camera down the drain and discovered large, potato-sized rocks. Looks like whoever was being foreclosed upon wasn’t too happy and flushed some rocks.  We cleared that, and all was well.

3.) Additional Work – In addition to the above plumbing problems, I also notice that the water was flowing kinda slow to the upstairs bathroom, which was due to the old galvanized pipes going to that bathroom (rust tends to build up.) I could have left it… but I was inspired by the podcast we did with Darren Sager who mentioned always going the extra mile at the beginning to make things so you don’t have to fix it in the future. So I spent a Sunday afternoon running new Pex water lines to the upstairs bathroom. I could have hired a plumber for $500 to do this, but I don’t mind doing this work once in a while.  There were also some other updates we did, like some painting downstairs and some new light fixtures, that added to the budget.

So what was Ben right about?

Hidden surprises.

An old property, that’s not totally normal, is going to have hidden surprises. And there definitely was some unexpected repairs in this property.

Main House- Master Bathroom

So Ben… you were right about that.


Why “Waldo” is My Best Friend

So, at this point, I’ve spent a little more than I wanted to on the triplex. Two of the units are rented,and the third should be rented by this weekend if all goes well. At this point, I will be bringing in $1945 in income, and providing $594.22 in cash flow.

Furthermore, this cash flow doesn’t include the $233.40 that I factored in for property management which, at the current time, I’m managing myself. Which means right now – I’m expecting to cash flow about $827.62 per month after all the expenses are paid out.

The following is the results page from the BiggerPockets Rental Property Calculator to show what the numbers look like:


Should a Newbie Buy Waldo?

Ben’s point was never “Brandon shouldn’t have bought Waldo.”  He’s said it many times before – I will do just fine with Waldo.

Ben’s point, however, was that new real estate investors should not buy something like this because of the increased risk.

This is where Ben and I differ.

I believe, if the numbers make sense, a newbie can buy something like this triplex and succeed.  Yes, this property had some extra issues. Yes this property has given me some headaches. Yes this property will cost more money this year to get finished.


This property will provide INCREDIBLE cash flow.

For a real estate investor, cash flow is the best medicine. (Tweet This!)

Now, should every new investor rush out to buy something like this?


If you are broke – don’t buy this (don’t buy anything. Get control of your finances and build up some reserves first.)

If you are afraid of some stress up front? Then don’t buy it. Stick to your mutual funds earning 8% and watch your soaps.

But if you are looking to get into the real estate investing game, don’t be afraid of a little work, a little stress, and little risk.

If you wait around for the perfect property, you’ll wake up some day at 75 years old and wonder why you never jumped in. There is no perfect property, at least not one that provides this kind of cash flow. 

Main House, Living Room

If  a new investor had been in my shoes and purchased this property, they would have gone over budget by $10,000 perhaps.  They would have needed to spend some time seriously contemplating how to come up with that money. They may have had to call in some favors, work the weekend, pick up a second shift delivering pizzas. Whatever.

It would have been hard.

It would have been stressful.

And in the end… they would be a real estate investor.

The $10,000 lesson would have taught them more than 4 years of college never could. More than $50,000 on a guru course could ever hope to. More than all the blog posts and podcasts and forum discussions ever could.

Finally, to be honest, a newbie should have done better on this property than I did because they should spend more time getting proper bids and inspections than I did.  I didn’t even turn the water on during my inspection because I knew I could handle whatever came my way – as I did. I don’t recommend this for newbies. However, I’ve done this enough to know that even the worst plumbing problems can be fixed, and the deal was so good that I knew it wouldn’t have made a difference to me buying it or not. 


Ben Leybovich is one of the smartest guys I know – and one of the best real estate investors I’ve ever had the privilege of speaking with. He’s also one of my best friends and one of my closest advisors – so I respect his opinion above almost everyone else.

However, I believe the public needs to see both sides of the “Waldo” story and why I don’t regret a single penny of this purchase. I titled this post “Let’s Get One Thing Straight About Waldo” – and although you may think I’ve said a lot more than one, I believe it can best be summed up with one simple line:

There is no “right” investment for everyone, but there may be a “wrong” investment for you. (Tweet This!)

This property would not fit within Ben’s business model. It would be wrong for him.  

Maybe it’s wrong for you.

However, it fits perfectly within my business model and was very-much “right” for me.

Maybe it’s right for you. 

Only you can answer that question.  It is my hope that this good-natured debate has opened your mind to new ways of thinking.

I don’t care if you think I’m right or think I’m wrong.  I only care that you think.

(This is the part of the post where you chime in … and let me know your thoughts. Are you Team Brandon or Team Ben? Let me know in the comments below!)

Photo: ERiKA

About Author

Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.


  1. I think I have to agree with Brandon on this one. If your finances are in order (and they should be before you start flipping – or you need a partner with cash), a project like this shouldn’t be an issue. The other potential hurdle – buying in the wrong location, can also be remedied with a good partner in the beginning. You just need to tread cautiously when you don’t know what you don’t know.

  2. I don’t understand the fascination with telling newbies what they should and shouldn’t do. Let people make their own decisions and learn their own lessons. Provide them with information, but don’t make decisions for them. There was a discussion about mentors on the forum and I think Bill Gurney talked about being a mentor. He said he helped provide information, helped point people in the right direction and taught lessons through his investing. He never told someone what to buy or made a decision for them.

    I think people have to find their own strategy and learn from their mistakes. Otherwise all newbies would be investing in the exact same stuff (maybe that’s why this advice is given, the seasoned guys don’t want the newbies encroaching on their territory).

    • Brandon Turner

      Hey Mark,

      I agree – but I LOVE these conversations because I know how much I would have loved to hear them when I got started. No one talks about this stuff in books, so this is as close to the real thing of folks get before jumping in. When Ben or I say someone “should” or “shouldn’t” do something, we definitely do it in the spirit of “I wouldn’t, and I don’t think it’s wise.” But everyone has to find their own way, which is what makes REI so fun!

  3. I’m with team Brandon on this one. I would take the cash flow all day. The key here is to look at such a deal in the context of what else is in your market. Sure IF you can buy “conforming” homes in your market with similar or even close cap rates then definitely go that route. The bottom line is that nothing is free and to achieve such a high cap rate will require some additional risk. The key, as Brandon mentioned, is going in with eyes wide open and budgeting higher than normal expenses on such an asset. If it still pencils out then why not?

    One side note that is important (and part of Ben’s argument) is that cash flow is not the whole equation.You need to look at appreciation and a home like this most likely will not appreciate the same as a desirable conforming house. Brandon got it cheap for a reason. Same will go when he sells it. So … when comparing alternative investments we need to look at everything than just the projected cash flow. Great post Brandon.

    • Brandon Turner

      Hah yes! 🙂 Funny though… I’m only half on Team Brandon! 🙂 As much as I know this was a good investment, newbies may not know to look beyond the cash flow and prepare for those risks. Hopefully conversations like this will help!

  4. Best, but most applicable, words in this article: “if you are looking to get into the real estate investing game, don’t be afraid of a little work, a little stress, and little risk.”
    Thank you! If you want to not accept risk, real estate investing is not the best for you. There are as many stories of foundation issues found in new homes, as well as in old homes.

    Everyone must understand houses are like people, and you have no idea how until you own it and peel back the layers, what emotional baggage the house might be carrying. Inspections work as well as they can, but unforseen expenses pop up out of nowhere all the time. Be ready, be prepared, and go with the flow. And, when you’re done, you’re officially in the club, where we can now share horror stories that become funny when viewed through the lens of time and experience. 🙂

    • Brandon Turner

      Hey Lisa, thanks for the comment. I love the way you put that: “Emotional Baggage the house might be carrying.” So true! There are definitely a lot of layers to this stuff, which is probably what freaks most people out, but I love it!

    • As I read through this string I was thinking the same thing Lisa. You can never know completely what you are going to get until you get it. You learn from it, you fix it, you rent it…and in the end if you’ve done your homework you make money off of it.

  5. Sara Cunningham on

    I see both sides. I’ve followed most of Bens posts and he makes a really good case. He has convinced me to start looking at multi family as a real possibility. Needless to say during my initial search I came across a house just like Waldo, an original single family home that has been converted into a triplex. I managed to get the seller to agree to sell it to me for $32,000 which is $20,000 below market. It is already occupied by 3 separate tenants who have been there for over 20 years, and are currently paying a total of $1,160 in rent per month. One is Section 8 and it passed their inspection 2 months ago. Pending my property and termite inspections I will be the new owner 2 weeks from now. Have I got a good deal, time will tell but I believe that I do. I’m not afraid of work or challenges. I’m in a position where I can buy on a revolving line so don’t even need a deposit. I will then flip it over to a fixed 15 year loan since it fulfills the 70% ARV value my bank requires. Ben it might not be a multi family but just couldn’t resist. Brandon I would of done exactly what you did too. Just love these debates.

    • Brandon Turner

      Hey Sara, thanks for the comment. I’m also a huge fan of Ben’s posts, and him and I are about 99.9% the same person. That’s why we both like exploring those differences when they come up.

      Congrats on your upcoming purchase! Be sure to let us know how it turns out!

  6. Waldos serve a purpose – they cash flow like crazy (even on a 15yr fixed)! Also, if you start with a waldo all other RE will seem easy. I have a couple triples that are much like Brandon’s waldo. They are without a doubt my biggest time consumers and headache generators, but they are also my biggest money makers. I hope to someday be in a position to sell them and keep my easy-peasy stuff. The 2 waldos I have though pay a LOT of my bills right now and are part of the reason I no longer have to work for the man 🙂 . They will teach a newer investor much of the frustrations of owning rental property, at the same time rewarding you richly for the extra grief. I see both sides of the debate. Low tolerance for renter issues and maint. issues = don’t do waldos, Higher tolerance for these = look into waldos they can pay very well.

    • Forgot to mention too – those worried about waldo not appreciating… who cares? If Brandon is getting 827/mo income (before depreciation, and mortgage tax deduction, etc) on an investment this small, who cares if it never appreciates a penny? Point is the real money is your monthly paycheck on these. You are pocketing around $10,000/yr on each waldo. With only 5 waldos a lot of us could be done working a regular job! That’s why I love em, and hate em. As much as 3x the cash flow, but often 3x the headache. I wouldn’t build a portfolio of only waldos, but a few… sure (even if they never appreciate).

      • Waldos in Toronto appreciate a lot, there was 2 triplexes around my waldos that sold for over 1.2 million this year, both generate over 70K gross a year.

        It depends on the hood , location, etc…

  7. Great article. I just looked at a duplex “Waldo” the other day. Lots of potential, near a college, but there is water damage in both kitchens. The kitchens run parallel to each other. Don’t know if it’s the roof or plumbing. . Need advice on it. Think it’s worth the while? I have a lot of paralysis by analysis.

    • Brandon Turner

      Hey thanks. That’s tough – I’d definitely try to get some solid numbers and run it through a good calculator or spreadsheet. Also you’ll want to find out what is causing that leak. The more information you get- the less analysis by paralysis I think you’ll have!

  8. I have done a lot of renovations, and to be honest this sounds like nothing more than typical. Should a newbie shy away from this kind of project? I am with Brandon on this topic. This is exactly the kind of experience you need to get as a newbie. Ideally it should be embarked on with an experienced partner, and always with a budget that allows for the unexpected. That is where a newbie could easily get burned, unfounded optimism. But if they go into it understanding that there will be a high potential for surprises, and not of the pleasant kind, they should come out of it with a lot of lessons learned, and a profit.

  9. Tom Sylvester

    Like Josh, I am getting sick of the Walso discussion. With that said, I agree 100% with your point about the benefit to newbies in hearing both sides. It is one thing to read a book, listen to a podcast and search the internet, it is a completely different thing to hear experienced investors talk about actual deals, their view and the reasons why they feel that way. That content is pure gold, and one reason I recommend people to network/go to REIAs.

    I just purchased a property that I dubbed “Toilets and Fish Tanks” because the previous owner was a toilet and fish tank hoarder. Most people think we are crazy and no one should buy it, but the foundation is solid, it has a new roof within the last few years, the gas and electric is already split and it has been gutted down to the studs. When I purchase a property, most of the fear/unknowns come from what I can’t see. With this property, I can see everything. As a result, anyone just needs to go through the normal process of demo, rough in, sheetrock, paint, flooring etc. There is a lot of work to do, but this would be a great investment for most people, because you would touch on each piece of a renovation. And like you mentioned, it will cashflow like crazy.

    So I hope that we continue this trend on the podcast and forums of diving in to different viewpoints and hearing from people who are doing it everyday. Great follow-up post Brandon.

  10. Jeff Brown

    I’ve advised literally hundreds and hundreds of newbies, both clients and non-clients. In general, I’ve consistently told newbies that buying something like this ‘Waldo’ is, um, most likely not what they should be tackling. I’ve seen when they do, and the vast majority of the time it’s not pretty, and that’s being kind.

  11. Mehran Kamari on

    I definitely would’ve bought Waldo as well. I do however, see the value of both sides of the discussion (not argument!) Ben is a sharp dude and I pay close to everything he says. Apparently Ben has labeled my triplex as Waldo as well 🙂

    It’s unfortunate, how sometimes plumbing issues don’t present themselves until tenants move in and are actually putting the pedal to the metal on the mechanicals of the property. It’s so important to have reserves! Even with that up-front big cash infusion, your cash-on-cash is still healthy!

  12. David O' Donnell on


    Have you calculated what you make per hour when you are screening real estate deals/ making RE buying decisions? versus: “So I spent a Sunday afternoon running new Pex water lines to the upstairs bathroom. I could have hired a plumber for $500 to do this, but I don’t mind doing this work once in a while.” .

    I don’t know exactly where you’re at with your portfolio but i’m sure you have heard this line of thinking:
    If you make 100k per year and work 40hours per week will say 50 weeks per year:
    2,000 hours per year / 100k = $50 per hour
    next step is to determine what activities you are doing that are $50 per hour activities and if you map out your time and find your doing $10 per hour work your loosing money.

    I say all that to say this: I think I heard Ben make the point that at times your wasting your talent doing $10 per hour work (or just work below your pay grade in general).

    Anyways, just a thought. I really appreciate all of your work!

    • Brandon Turner

      Hey David,

      Thanks for the comment. That is an interesting question and something I do think about often. It’s tough for me to say, since I am a rather “reactive” investor – meaning I don’t usually actively look for my next investment, but rather wait for it to come to me. So, if I was not doing the plumbing, I wouldn’t be finding better deals, I would be probably working on my book, building my fence, watching a movie, or something else. So it’s a tough call. Sometimes, also, I think I do stuff like this just because I am frustrated not being able to find others who can. It’s my biggest strength – and also my greatest weakness!

  13. Gina Bisaillon on

    I try to follow the discussions, but there’s never any mention of geographical areas, and that confuses me.

    Where was that Waldo property, for instance?

    Great site, by the way.


    • Brandon Turner

      Hey Gina,

      Yeah, we probably should touch on this more. My property is in Hoquiam, Washington. It’s a small town on the coast. It’s in a good neighborhood, but definitely “blue collar” with a lot of old homes and old people. This is a very low-income county also – hence the low prices. But yes, location is such an important thing – and ultimately why I decided to buy this. I love this location.

  14. I love Waldos, they bring me much better returns then purpose built apartment buildings
    Waldos make totally sense if their cap rates are higher than purpose built and they do not give me more maintenance issues than purpose built

    Toronto is full of Waldos, big victorian houses built in 1900/1930, structuraly sound, split later on by italians, most already have copper pipes, nob and tube removed.

    Purpose built are selling for 4% or even negative caps, and for millions.

    This week my contractor had an emergency on a purpose built where pipes got frozen and burst, flooding 5 apartments. I never had this problem although can happen to anyone.
    For me maintenance is the same as purpose built, it depends on the condition of the building.
    As long you upgrade electric panels and water heaters, you are good.
    The only thing I have to criticize is the sound proofing of the buildings, but again, you can do it cheaply and older purpose built also have sound proofing issues.

    It all depends on economics, for the same cash flow, I would buy purpose build, but if it brings me more cash flow, I will consider a waldo depending on the condition, etc… it’s a case by case basis.


  15. I totally agree with Brandon, some properties are not the right thing for certain people.
    That is what is happening in my case, I want to move from Waldos to bigger buildings with over 10 units because I want bigger scale. But the point in y case is just scale not waldos vs purpose built.


  16. I am in the process of purchasing a Waldo. It’s a 9 unit MF (actually a mixed bag of 4 single family homes and 5 attached townhomes) all on an acre of land. It’s in a growing, revitalization area and close to a new commuter train station that is gaining ridership every year (up almost 25% in the last year), so I am banking on location plus a low inventory of available rentals in the area, especially in my target rent range.

    I know going in that this is going to be a challenge because the property has been used as housing for a charitable organization for the last 20 years, with tenants paying little to no rent. The maintenance done on the property over the years has been volunteer work by local churches, so no real numbers and some questionable quality of work. I’ve run the numbers using the 50% rule and my own 70% rule, which is what I am using for my pro-forma since I don’t really have actual rents and expenses to go by. My target rents, which I think are pretty conservative for the area, are 1.8% of the purchase price, so not quite at the 2% mark.

    If my numbers are correct, it will cash flow very well once I reposition it with a complete rehab and new tenants. If I’m wrong, then I guess it will be an expensive lesson learned. Either way, I hope I end up siding with Brandon, but as a newbie, I keep Ben’s points in the back of my mind and hope that I continue to learn from BP along the way….

    To be honest, my biggest fear right now is that the current tenants will flush rocks down the toilets since they are being forced to move out. Thanks Brandon for putting this thought in my head 🙂

    • Brandon Turner

      Hey Kim – it’s exciting to see you getting out there and making things happen! Yes, you’ll have problems, but you’ll learn SO MUCH from this – it will really define and sharpen your skills! Best of luck – and stick close to BP when you do have those problems, we’ll help you get through em!

  17. I would have bought this house too. The non-conforming risk is a fair comment. However, over time this house being unusual is also its strength.

    I think you’ll enjoy higher rents and lower retention on this house because its unusual character and great location. Great picture thinking!

    When you’re PMing a triplex like this, how, if at all, will you treat them differently from a ‘conforming’, purpose-built triplex?

    • Brandon Turner

      Hey Rick, I’m definitely hoping so. I think the main house – because it’s large, with a ton of character, will never be a problem to keep full. I think a PM would probably look at this fairly normally, since there are a lot of properties like this out here. It wouldn’t be weird for them. Thanks for the comment!

  18. I’m not on either team because which one of you is right doesn’t matter. What does matter is the exchange of opinions and ideas so that newbies can improve their knowledge and make the decision for themselves, and that is what makes this debate great. I’ve advised many newbies when they have asked me for deal advice. But, my advice doesn’t matter and neither does yours, because they usually don’t listen and do what they want anyway. That’s OK, too, because it’s part of the learning process. I’ve bought so many Waldo’s that I could find myself asking “where’s Waldo?” Some have been great, others not so great, but I’ve learned something from each of them. Some people learn when they are told something, and some learn only when they experience something. And some ignore all of the advice and still come out smelling like a rose. Sound familiar, Brandon? 🙂

    • Ben Leybovich

      Brian – your advice indeed matters to some of us. I do not want to buy Waldo. Please, if I ever ask you for advice (like tonight or tomorrow, or day after) and it’s a Waldo – remind me to practice what I preach.

      Brandon is young at 28 – I am old at 39. There’s a time to learn (like when we are young), and there is time not mess it up – I am there… So, you are right to say that nobody is wrong in this argument. We are both right, but we see the issue from different focal points…

      This was likely the most insightful comment I’ve seen this year on BiggerPockets. Brian – I stand corrected…

    • Brandon Turner

      Brian – you are a smart man! Yes, yes, yes absolutely. It’s the debate that matters, not our opinions. I think these conversations need to take place, and they might as well happen on BiggerPockets. As Ben said in this comment thread- we definitely have different “perspectives” on this, and we should. That’s what makes Real Estate so rewarding! Thanks for being a great voice of reason Brian!

  19. Rob Fitzpatrick on

    The debate over Waldo was hilarious! The difference of opinion really seems to come down to two points. First, Ben’s perspective comes from an urban environment where you have many deals to consider. If one is not such a good fit, move on. Whereas, Brandon is rrrrrural! Consequently, deals may be fewer and farther between. Secondly, Brandon ike creative opportunities to make lemonade where most people see lemons. Ben prefers to follow his model much more closely than Brandon. All in all, I loved the discussion! Thanks!

  20. WTF, Ben, non-conforming to what? Some picky bank’s standards? Then don’t finance it, just use cash! Do you want to “conform,” or do you want to be rich? I bought my latest Waldo a few months ago as a vacant run-down old 1890s former general store, brothel, bar, and flophouse for miners, old shingle siding and the works. It was triplex-ified years back, and is in a boom-bust mining outlier town–currently between booms–of 18,000, and is 80 miles from the nearest bigger town . On a spacious 2.5 acre lot. Looks like the Munsters or Addams Family lived there, and is rumored to be haunted. Has 1200 sf 4/1 main floor unit, plus two 600 sf upper 2/1 units.

    Paid $15k cash. Expected another 10-15k to get it up and running. There is some obsolescence that would/will be hard to rectify but I figured I’d just offer low rents, someone has to cover the “affordable” end of the spectrum. Rehabbed 2 units into winter. $20k of rehab later, got 2 units rented for $495 (the 4 BR) and $450 (the 2 BR) plus all utilities. Recent tripling of LP prices made main unit hard to rent in this, the coldest winter in decades. But it’s now cash flowing $895/mo so far, third upper unit will be rehabbed and rented for $450 too if it ever warms up here. Was -20 F again last night…

    So where’s Waldo? Could be right under your nose. And if you can find him and have the stomach and funds for some rehab (I already own 60 one to seven-unit rentals, so it’s nothing new) he can be a worthy find! Slow and steady wins the race…

    • Brandon Turner

      Hey Thos, thanks for the comment! Yeah, these properties definitely appeal to me. However, I also know I’m “growing out” of this phase, and will need to start transitioning soon to some easier-to-manage properties. I like your line “Do you want to be conform or do you want to be rich?” Hahaha. Ben will probably jump in, but I already know his answer:


  21. I think one of the biggest things I learned after making our first investment is stuff goes wrong, regardless of the type of building you buy. You have to plan/expect for something, often not the obvious things, to go wrong. I think with the non-conforming buildings you just have a different or additional set potential issues (weird plumbing and wiring as you mentioned). We recently looked at an older house that had been converted to a triplex. It was in a decent area and had good cash flow. When we looked at the place we realized that the stairways to the second and third floor units were so narrow, tenants could barely get any furniture into the apartments.

    • Ryan, did you happen to look at any scenarios for remedying the narrow staircase issue? My “waldo” that I am already under contract to purchase has the same issue (times 5 units). I am budgeting to remedy the problem, but not sure how yet.

  22. Jeff Brown

    Brandon — Since by definition newbies are rank amateurs, I think if they find Waldo and come out ahead, they won the lottery. You thought it was gonna be $5k fix up, and it was nearly triple that. What would newbies do? Also, how much would newbies pay? I think they’d screw something like this up beyond recognition.

    • Brandon Turner

      I agree there are more risks, which is why most people won’t do it and will instead end up working till they are 75 and living on what’s left of the social security system. I know that 99% of those reading these posts will never do anything because they are too afraid of losing money or failure or whatever because they only want a “perfect property” (which is just an excuse for inaction.)

      My point is that any action (within reason) is better than no action, and properties like this (when smart math is involved) don’t have that much risk. If a newbie went 10k over budget, they would have to put it on credit card, borrow it from Mom and Dad, work an extra job for 6 months to pay for it, do the repairs themselves… in other words: they would have to hussle, just like we all do at the beginning. It would be hard, and they would make mistakes, and in the end I think they’d emerge a stronger, smarter investor.


      • Nice reply Brandon. No backing down. Certainly a newbie could mess up a Waldo. They could see old plumbing and decide to gut the place since they have to open some walls anyway. I still think you’re right. You have to start somewhere. Inaction is the greatest enemy.

  23. Team Brandon or Team Ben?… Guess I’m on Team Alan, but I do appreciate your debate. If the choices are Brandon or Ben, I’d have to give it to you on this one. You have to be creative and look at each property with fresh eyes. Define your strategy and your exit options. Put together a budget, but be sure to have options when other things come up.

    I would have to say that Waldo is probably not right for me. I (and my wife more importantly) tire of old house plumbing issues, old house electrical issues, poor insulation, musty wet basements, out of square everything, and old houses in general. I like new or newer construction in suburban areas for fewer surprises and less functional obsolecense.

  24. Abel Vazquez on

    I am team Brandon. Although this property can cost a newbie alot more than they might have budgeted it would make a great learning experience and at the end of the day make you or break you.


  25. Charles morgan on

    I would gladly buy a Waldo. My first investment was a non-conforming. I ended up not having to do much to it, but could easily have spent twice what I paid for it in repairs. Rented it out within a month for a really low price to couple who were there 6 years. They did the repairs and I hated making them move when my son wanted to buy it. Single wide mobile with additions on both sides. I paid cash so my costs were low but my returns were low also, I never regretted it.

  26. Brandon,
    I think the most important idea you are putting forward with this Waldo conversation is that most newbies won’t get off the fence and do something. So if a low priced, weird, purple cash cow gets them off the fence, AWESOME. Forward movement is a major accomplishment when so many people just read blogs and do nothing.

    A portfolio full of Waldo’s might drive someone out of the biz, but just a Waldo or two that give newbies some cash flow, some battle scars, and some valuable real world education – good for them.

    Thanks for sharing your knowledge and enthusiasm.

  27. Brandon this is a great point. Living in a small market (NE Oregon) where 50% of our houses are 100+ years old, “waldos” are the norm in my neck of the woods. I have seen many of my clients get in over their heads because they spent everything they had just to get into the property, and had no money to replace the subpar repairs of previous owners. As the saying goes, fortune favors the bold, but common sense always wins.

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