Trying to buy 1st property I’m excited

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Trying to buy 1st property I’m excited

Willie Page
Rental Property Investor · Racine, WI · Member since 2019 · 18 posts · 20 votes

Hello my new family I am excited looking to purchase my first property. Need advice I’m using my home equity to by this property cash it’s a duplex in Milwaukee they are asking 29k what should I offer and it should rent for 650 a floor there is one long term Renter in the upstairs. my loan would be for 30 k for 10 years I also have a single family paid for home that I will be renting out 4 br 2 bath my goal is to have 12 properties in 10 years I’m only looking at buying properties around the 25 to 40k range right now and work my way up. Thanks to you all in advance for the help.

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Rebecca KnoxBusiness Member
Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
7y

Make sure that you check the actual comparable sales and not just perspective rents--also deferred maintenance. Research the neighborhood because if it is a $29k duplex area, account for more vacancies/turnover/problems

$29k is not a deal if other duplexes are selling for $15k in the same condition within 1/4 mile radius. What neighborhood is it in or zip code?

Captain Save-A-Home LLC
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  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Willie Page

    Those numbers aren't bad at all, Willie (borderline good especially in the market I'm in!)- especially if you think the other unit will rent for a comparable amount.  I'd suggest you analyze the area and equity picture of that property as well.  With you just getting started and that low of a purchase price I'd wonder what the banks would act like when it comes time to possibly pull money out of the purchase (refi etc).  For awhile we were told that banks didn't want to deal with loans less than 75k.  Since we've got a little scale, and found a bank we like, that hasn't been an issue.

    I like the long term thinking.

    I would advise to set goals tied to your lifestyle goals and money/income, rather than units. :)

    1Reply
  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    Make sure that you check the actual comparable sales and not just perspective rents--also deferred maintenance. Research the neighborhood because if it is a $29k duplex area, account for more vacancies/turnover/problems

    $29k is not a deal if other duplexes are selling for $15k in the same condition within 1/4 mile radius. What neighborhood is it in or zip code?

    Captain Save-A-Home LLC
    WebsiteView Page
    2Reply
  • Michael O.
    Boston, MA · Member since 2019 · 35 posts · 21 votes
    7y

    Hi Willie, fellow newbie here, congratulations on taking this step. Are these deals common in Milwaukee? For that price do you have to do a lot of rehab? I agree with @Rebecca Knox that you should research the neighborhood for comparable sales to see if you can get the best deal. I would only add that you should plan to have some capital reserves so you are not caught unaware by Capex and repair costs except you are doing the rehab work at the beginning. Best of luck

    1Reply
  • Willie Page
    OP
    Rental Property Investor · Racine, WI · Member since 2019 · 18 posts · 20 votes
    7y

    @Rebecca Knox 53206

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  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    7y

    That's alright but not a home run. 53206 is the most challenging investment zip code not just from a tenant perspective but also finding PM's and contractors that work in that area. What I suggest is you ask your realtor to pull ALL duplex activity 1/4 mile radius from your subject property (active, sold & listed). That way you can get a better feel of the neighborhood and be in control of determining the value yourself.

    Captain Save-A-Home LLC
    WebsiteView Page
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  • Michael Henry
    Real Estate Consultant · Brookfield, WI · Member since 2014 · 873 posts · 350 votes
    7y

    @Willie Page how has your property search been going? Has your realtor gotten you the information Rebecca suggested?

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