Bought my first investment property.

17 Replies

Recently bought my first 4 unit building in the US northern Wisconsin, its a start to this new adventure.

Before giving any details on my purchase I wanted to thank Joshua Dorkin, who’s BP blog I found shortly after coming to the USA in 2004. Without BP,  I’m sure I speak for most newbies, we would all be up a creek without a paddle, however that saying goes.

So thanks to you Joshua, and your amazing team Brandon Turner etc.

Purchased property for 100K, brick building, bring in $2000 per month, previous owner had totally neglected any maintenance etc. I want to renovate extensively putting about 20K-25K per unit and bring rents up to about $750 to $800 per unit.

I know I’m taking this from a 2% to a 1.6% ratio but this way I know its a solid product and our PM can place some good tenants, looking long term.

Originally posted by @Mario Alexandrou :

Recently bought my first 4 unit building in the US northern Wisconsin, its a start to this new adventure.

Before giving any details on my purchase I wanted to thank Joshua Dorkin, who’s BP blog I found shortly after coming to the USA in 2004. Without BP,  I’m sure I speak for most newbies, we would all be up a creek without a paddle, however that saying goes.

So thanks to you Joshua, and your amazing team Brandon Turner etc.

Purchased property for 100K, brick building, bring in $2000 per month, previous owner had totally neglected any maintenance etc. I want to renovate extensively putting about 20K-25K per unit and bring rents up to about $750 to $800 per unit.

I know I’m taking this from a 2% to a 1.6% ratio but this way I know its a solid product and our PM can place some good tenants, looking long term.

 Wow, $25,000 per unit?!?!

That seems like an awful lot. The place must totally be trashed/stripped. 

402-965-1853
@Mario Alexandrou

Congrats, Mario! It sounds like a good jumping off point for investment portfolio. Cheers!

Stuart

(970) 672-6282

@Antony Gayden They are all two bedroom units with basements, we are totally re-doing bath and kitchen, floors have to be refinished, new appliances and electric, some plumbing, all walls have to be recoated a few windows, paint. Have had about 3 contractor through there, and all coming up with about the same amount.

@Bryan O. Thanks Bryan, yes it is really exiting, we have started renovating two of the units, so this project will certainly be an eye opener for me.

Just want to bring to your attention on not to over renovate. Keep it nice shiny and make sure it works. have you compare the market and see how other properties look? Remember that it is a rental unit and not a flip, and even in doing a flip it is important to know your market. Good luck!

Congrats!

...following this topic in hopes of some of those pictures coming in.

congrats on the purchase should be a great investment.....

can't wait to see before and after pics

I am still not able to post photos, not sure if your are able to view any of these attachments.

@Carlos Velasquez yes you are very right, this is not a flip, but I'm also trying to attract a higher rent for the same space. Not sure if your able to to see any of the photos I tried posting. These are all 2 bedroom  1 bath units, they have been getting $500 rent, I am trying to attract $750 -$800. Each unit is going to be in the 45K - 50K. This upgrade will put this at approximately 1.5 rent ratio, not that this means much now, but gives us something to improve on, at the same time hopefully these units will not need much maintenance for a while.

I believe you are making something wonderful which is taking the first step. I am new still but I have bought a couple of properties and I am expanding my rent portfolio. Things are getting better as I continue to learn. Other than checking the competition, I recommend to market the property everywhere i.e. facebook, craigslist, postlets etc... before the renovation is completed because going through the application process would take some time. Also, if you do a good marketing campaign you will get tons of people interested in your property which you can use to your benefit. You can "suggest" that the best price offer will be taking the apartment and this can start a bidding war among them. Someone from bp suggested this strategy and it worked! so now I am passing it forward. Marketing is key and trust me the apartment does not have to be luxurious but it needs to be painted, with new vanities, I prefer laminate flooring vs carpet. I also put hardwood in a small section like the living room, and may Or may not put tile in the kitchen. There are Lots of nice looking appliances in craigslist that people sells for a cheap price. This had worked for me and I have gotten tons of applications. Lastly do not forget to do a background check. Include asking for the last 2 pay stubs and tax returns to see How much They are actually making. Also check on the landlord before the last. This is because the last landlord may lie to get rid of the problematic tenant. Once again, good luck.

@Carlos Velasquez thanks for all this great advice and suggestions. I have a good PM company who run a very tight ship. I know I should be doing my own management, but at the same time I'm trying to buy another two similar properties very close by, so putting all my time an effort into that first. Once all is stabilized I will rethink my management skills.

Pure gold about starting a bidding war.

Thanks again Carlos

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