Rental #16 under contract!

Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes

My rental property goal was 16 properties. And now I'm under contract on rental #16!

It's a 3 bedroom, 1 bath property with a 2.5 car garage and partially fenced in yard located just 7 houses down from a rental I already own, so I know the neighborhood.

Purchase price = $27,900

Will rent for $850-875 per month.

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Joel OwensBusiness Member

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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

10y

Vincent most investors I know do not hold for 15 to 30 years on a single property. You calculate an opportune time to sell for your alternative investment property. You then sell the property with a 1031 before the large capex hits into a newer property unless you hold for redevelopment.

One negative is not much depreciation with these cheaper houses. Another is type of tenant is more time intensive to manage.

I think it is great what Dawn is accomplishing.

The largest wealth gains I see by investors are not cash flow related but buying at the right time in the cycle and then doing a 1031 into another area or asset class that hasn't peaked yet.

By constantly taking advantage of market conditions you have larger equity gains. So for instance if a property had 200 month cash flow after expenses for 2,400 a year and another property had 1,200 a year based on cash flow the 2,400 would look more appealing.

Fast forward 5 years and the higher cash flow property hasn't appreciated much but the one with less cash flow has risen quite substantially. So when the equity gain is factored in the less cash flow outperformed the higher cash flow property for overall returns.

This is not always the case but typically lower end areas are all cash flow, middle areas a mix of cash flow and good equity growth, and higher end areas little cash flow and the most equity growth.

What investors want and desire depends on the investor. Those making 50k a year at the job wanting to replace that income with cash flow so they can move to real estate full time will be focused on higher cash flow even if more time intensive.

Those making 500k a year tend to have a different investing philosophy. It's more about quality of the area and property with the least mount of headache, good equity growth upside, and cash flow is much farther down the list.

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Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Originally posted by @Vincent Crane:

What year is it and do you plan on doing any rehab?
Yes it's a 1953 house. Many properties in my area were built in the 1950s.
I am going to paint the interior, replace the carpeting with vinyl plank, and update the closet in the kitchen to turn it into a pantry. I also have a foundation issue to correct.
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Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Originally posted by @David Oldenburg:

@Dawn Anastasi First, congrats on # 16! What is most amazing to me, is not the 16 properties, but the numbers you gave in this post. You are buying a home for $27,900, and able to rent it for $850-875 per month. That is a near 38% return on your investment, based on gross rents. For comparison, my last rental cost me $250,000 and I was able to rent it for $1,500 here in CA, a mere 7% return based on gross rents.
Did you just get a great deal, or is this typical for your area? Do you have a lot of defaults on rents in your area, or is the $850 to $875 solid? I have read stories here on BP's, where people buy these properties with great ROI, but they are in areas where they have a hard time getting consistent good renters who pay on time each month. How is it in your area? Again congrats!!
It used to be that $30,000 bought you a great house after the crash. They were all over the place. Now, people are snapping them up so quickly that it's hard to find something this low priced in a good area.
Overall renters are good if you get ones that you screen well. I invest in C/C+ areas but try to get B/B- type renters. So if anything I get some late payments but overall pretty good.
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Julie Kern
Investor · Taylorsville, GA · Member since 2014 · 352 posts · 540 votes
10y
Congratulations @Dawn Anastasi! Are you planning to do a diary of this one too?
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Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Originally posted by @Julie Kern:

Congratulations @Dawn Anastasi! Are you planning to do a diary of this one too?
My last diary didn't work out the best because I was so busy that I couldn't make updates every day like I wanted to. Do you think others would want a diary of this one?
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Julie Kern
Investor · Taylorsville, GA · Member since 2014 · 352 posts · 540 votes
10y
I enjoyed your last one! Even if you can't update as often as you might want, it's really educational (and fun!) to follow the rehab.
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Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
10y
Congrats Dawn!
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Larry Turowski
Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
10y
@Dawn Anastasi Congrats! Looks nice. Does it need any work? I'm working on getting number 13 and 14 up and running.
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Mel Griffin
Real Estate Professional · Elkridge, MD · Member since 2016 · 19 posts · 9 votes
10y
I know in Baltimore a lot of Land Lords are Buying Houses and are renting out the rooms. Each room for $400.00 / $450.00 per room ! But the Tenants pay rent weekly $100.00 per week. And I starting doing the math on these and was mind blown !
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Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Originally posted by @Julie Kern:

I enjoyed your last one! Even if you can't update as often as you might want, it's really educational (and fun!) to follow the rehab.
I can do that.
Basically, everything has happened quickly so far.
Monday 1/4 1:30 pm - Went to view the property with my agent. I liked the property, so I asked the agent to put in an offer.
Monday 1/4 4:30 pm - Was eating dinner at a restaurant, got the email with the offer paperwork. On my phone, digitally reviewed and signed the offer.
Tuesday 1/5 2:00pm - Got the message that my offer had been accepted. I knew I had to get funding for this property.
Tuesday 1/5 night - emailed the inspector to arrange for the inspection.
Monday 1/11 1:00 pm - Inspection.
Monday 1/11 3:00 pm - Deposited my funding check in the bank.
Currently waiting on the results of the home inspection and trying to get a foundation person to look at it. The home inspector knows something about foundations so he recommended steel beams. I have to get a quote on that. Usually it's around $200 a beam.
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Jerry W.Pro Member
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Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
10y
@Dawn Anastasi, I just had to pop on and say congratulations. Without goals there is no reason to keep pushing. it is great to hit goals. Now it is time to increase your goals after re-evaluating where you want to go. It is always nice to see nice people do well.
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Tim Lindstrom
Investor · Douglasville, GA · Member since 2014 · 313 posts · 181 votes
10y
Congratulations Dawn. If I still lived in the Milwaukee area, I'd invite you to lunch to glean some of your knowledge of the area.
It's nice to see people reaching their goals. I want to own 20 cash flowing properties, and plan to retire from my 9 to 5 job after my 10th property. I missed my goal of buying 3 houses last year (only bought one, and it turned into a nightmare I'm still living). Hopefully this year will be better. I'll finally finish the rehab on my last house, take my losses, and move ahead.
I have seen you posting on this site for years, and almost moved back to Milwaukee to try out the market based on the experiences you shared.
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Lem Diaz
Santa Clara, CA · Member since 2015 · 33 posts · 5 votes
10y
Wow. Nice. 28k will get you a parking spot in my town. Shoot...maybe there's some cash flow in that...
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Alex Hobbs
Middletown, DE · Member since 2015 · 52 posts · 11 votes
10y
Congrats @Dawn Anastasi that is awesome!!
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Jason Hoover
Real Estate Broker · Franklin, TN · Member since 2015 · 7 posts · 1 vote
10y
That is fantastic! Congratulations on achieving your goal!
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Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Well I just got the inspection report back today from the home inspector from yesterday. He is quick!
Issues:
- Foundation issues as I mentioned before
- Downspouts are lacking extensions
- The water heater is older (around 17 years) and may be past its prime
- The electrical panel cover is missing some screws
- There are a couple outlets not secured to the walls correctly
- There are missing GFCI outlets in the kitchen and bath
- There is no insulation on the water pipes
- There are not smoke detectors and CO2 detectors in all areas that they should be (it's recommended to have one in each bedroom and one on each floor which includes the basement)
- The attic space could use some additional insulation
- There are a few corner pieces of siding missing on the exterior
- The grading around the home could use some adjustment
- The gate part of the fence needs to be re-adjusted for alignment
- The wood on the garage needs to be re-painted
It looks like a lot, but most everything is small (other than the foundation and grading). Being in Wisconsin, in the winter I can't do much in the way of grading and painting, so those would have to wait.
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Mayank S.
Investor · Herndon, VA · Member since 2015 · 185 posts · 74 votes
10y
Congrats @Dawn Anastasi .. Great job on achieving your sweet #16 !! what's your next set of goals...Are these acquisitions mostly single family?
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Margaret Refile
Philadelphia, PA · Member since 2015 · 7 posts · 3 votes
10y
Originally posted by @Dawn Anastasi:

My rental property goal was 16 properties. And now I'm under contract on rental #16!
It's a 3 bedroom, 1 bath property with a 2.5 car garage and partially fenced in yard located just 7 houses down from a rental I already own, so I know the neighborhood.
Purchase price = $27,900
Will rent for $850-875 per month.
Congratulations!
1 Reply
Dawn AnastasiPro Member
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Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
10y
Originally posted by @Mayank S.:

Congrats @Dawn Anastasi .. Great job on achieving your sweet #16 !! what's your next set of goals...Are these acquisitions mostly single family?
I have a mixture of properties.
With this property, it will be 11 single family homes, 3 condos, and 2 duplexes.
I prefer single family homes.
This is not to say I wouldn't acquire more ... one of my partners wants to buy out my portion of perhaps 1 or 2 of the houses. But he's been saying that for about a year now and hasn't taken action, so we'll see.
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James R.
Investor · Member since 2015 · 222 posts · 173 votes
10y
Dawn,
From a fellow Milwaukee investor, congrats on achieving your goal!
Best wishes!
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Joe Mueller
Barrington, IL · Member since 2010 · 204 posts · 54 votes
10y
Awesome job! It's impressive what you've built on your own in a few years!!
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Johnny Rodriguez
Investor · San Antonio, TX · Member since 2015 · 26 posts · 8 votes
10y
Congrats @Dawn Anastasi, I can't wait to post my next buy.. Thanks for sharing..
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Jordan Decuir
Rental Property Investor · Katy, TX · Member since 2013 · 417 posts · 171 votes
10y
Wow. Way to go @Dawn Anastasi
I just got my first rental leased so I am a bit behind you. Great inspiration for the rest of us. Thanks!
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Stephen Hundley
Realtor · Lafayette, LA · Member since 2011 · 296 posts · 175 votes
10y
congratulations @Dawn Anastasi those are fantastic numbers!
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Frank Eimiller
Rental Property Investor · Fond Du Lac, WI · Member since 2015 · 261 posts · 78 votes
10y
Dawn! I just listened to the Podcast today you were featured in. Awesome story and awesome deal(s). Also, your activity on these forums is awesome. I hope someday I have as much knowledge to offer and share
Good to see others from Wisconsin being active w/real estate investing
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Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
10y
Congratulations on hitting your goal.
Its pretty neat watching someone start out, set some goals, and really become an expert at something like this. And a little bit of notoriety has to feel pretty good too I bet.
I know that when some of our investors talk about milwaukee, there are a couple of BP'ers that we always mention. Yourself and Brie Schmidt are the two that we tend to throw out there.
Well done. Great story. Let us know when your first book comes out. I think you'd be able to pull that off fairly easily too. Here's my suggestion for the title: The square root of goal setting! :-)
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