All Forum Posts by: Marcus Auerbach

I think I have emailed the address to everyone - if I should have missed you please email me or call/text: [email protected] or [email protected] or 262 671 6868

@Cody Krecicki yes here are a few things to think about: asking price and fair market value are not the same. Sellers (especially FSBO) tend to overestimate the value of their home because theyr know so much about it and the improvements they have made. The market does not always agree with those views. Get a CMA from your Realtor if you are not sure how to establish fair market value.

Second, I would not count on appreciation. We are starting to see buyer fatigue and I think the market is headed for a correction. We are somewhere late in the cycle of a sellers market, hard to tell if in phase 3 or 4, but things will start swinging the other side pretty soon.

Third, look for value ad opportunities. Where is a problem you can solve that increases FMV? Just buying appliances usually does not do the trick. Especially if you consider closing cost, agrent fees and holding cost.

Lastly, you are probably better of with a cash out refi instead of a HELOC. Talk to some local lenders, banks with less than 20 locations are normally much better than national lenders. Stay away from large retail banks and online lenders, it's a waste of your time.

@Alex Hively you have put a lot of work and thoughts into your business plan which I want to acknowledge on behalf of everyone here. Looking through the comments I am sure the feedback is not what you were hoping for and perhaps not what you deserve, but they guys are right - it shows that you are not speaking from a place of first hand experience and thats what they are pointing out. It may not feel good, but it's better to hear it from the fellow BP guys on the screen then from a disgruntled client, banker, agent or worse: an attorney.

Good for you that you recognice the potential of RE. But it's not as glamorous as it seems from the outside, it's a lot of work, takes time and a never ending learning experience, but it works. I am glad you bought your first home, now it's time to save up some money and get your first rental property and gain some first hand experience. Do yourself a favor and buy a property you feel comfortable having your wife go there at night. Play it safe for the first deal (more important than a spectacular ROI, you don't have to make all your profits on the first one) and you are off to a great start.

Hi everyone, a lot of people have emailed me, which is great, but feel free to just use the "Attend Event" button up top. I'll be sure to email you the details! See you next week!

Looks like we will get the floors done this week yet and hopefully the countertops, so we are getting closer to the finish line.

Looking for a used gas range someone is willing to sell or donate tomorrow Wednesday 9/14 in Milwaukee. 

Life is not always fair and when it rains, it pours. I have learned today about the situation of a single mom of three who needs support, because her life is just not going so well right now. She is barley keeping up with the mortgage payments as is and just had to pay for a special city assesment for the street. And today her gas range went out and she just can't afford even a used one. Good friends have reached out to find and buy a used range for her from a restore (and just not tell her about it, because she would not allow it).  

Anyone rehabbing a property with all new SS appliances and has the old white gas range still sitting around and is still in good working condition? I will care for pickup and installation. Thank you and please share. 

We are almost done with the rehab of another investment property and I would like to invite everyone out to take a close look on how BRRRR strategy can look like. Find out why I don't invest in cheap neighborhoods, how we rehab and what my numbers for a typical SFR look like. The format will be much like an open house, so no formal presentation, but take a look behind the scene, a great opportunity to network with other investors, get some ideas and enjoy a glass of wine. We may also have my favorite lender around for any questions you my have. Full disclosure: I also work as a buyers agent in and around Milwaukee and will be happy to answer any questions about buying properties! Please RSVP at [email protected] so I get an idea of who is coming we'll have enough to drink. Cheers!

Do you have Ash tree's on your properties? When I first heard the question from a DNR guy I was puzzeld: I had no idea, I did not even know if I could tell an ash tree from a maple. A few weeks ago I received a letter from the city stating that they found an ash tree on one of my properties infected with Emerald Ash Borer. I was ordered to remove the tree within 30 days. I drove out to the property and found a HUGE dead tree right under the power lines way back in the backyard, barley on my side of the property line. 

My landscaper is pretty good chopping down trees and not charging me an arm and a leg, but this one was right under the power lines and so I needed a tree service company take care of it. They ended up coordinating with We Energies, who is our utility company, because the tree was right in the power lines and could not just cut down without turning of the power. We Energies ended up paying for about half of the cost, but it was still almost $1000.

I was not too happy about the unplanned expense, until I spoke with one of my neighbors on th street. She has seven ash trees in her yard. All infected and all dead or almost dead. She has to take them all down and she does not have the money to do that.

The moral of the story: watch for trees when you buy an investment property. I had an expensive encounter with a huge willow tree sticking roots in my drain tile and sewer line causing massive damage and excavation. Now I have one more tree on my do not buy list: ash tees.

Here is a map of trees that have been found so far:

Well, I think Dawn is spot on. But from what I see with my clients there is not as much competition between out of state investors and locals as I thought originally. Out of State investors are looking at the rent to cost ratio in Milwaukee and realize that they can find good properties in great condition, that will actually cash flow right out of the box, no rehab necessary. Most local investors are looking to buy at a deeper discount and are willing to go though a an extensive rehab, or a full BRRRR like I do for my own portfolio. But there is really not as much overlap than I would have thought.

@Joshua Martin sounds like you are on the right track. I am not familiar with Berkshire's interal legal infrastructur, you may or may not have a fully competent advisor. And some are just willing to take the risk until they get sued. Good luck!

Hi @Account Closed - thank you for reading my post and for the feedback: could you explain your point a little bit more? BP is all about learning and sharing what works and I am constantly looking for ways do improve. Would you recommend to invest in markets where property values are higher? You are not referring to investing in Hawaii, right? 

I will argue with you on the flips - flipping is a job, at least for me. 20% of the work is finding a deal, 80% is planning, managing, staging and marketing the product. You can argue that 80% of the value comes from 20% of the work - which is finding the deal. But it's still active work. There is no income once you stop working. Just like wholesaling is a job and not an investment. Unless you are talking about a slow flip - when you buy something in the 70's (like you did) and then sell in the 90's, but in that case I assume you are holding cash flowing asset. The broader definition casually used includes all these aspects under "real estate investing", but I would argue that an investment should involve a ongoing stream of more or less passive income. 

Cash flow is absolutely vital to me, I'll be the first to admit that. It allowed me to quit my well paid corporate job and do what I enjoy. Most of my cash flow feeds back into my business and keeps my portfolio growing. I would not be able to do any of this without cash flow.  Most of my investor clients also rely on cash flow, either to grow their portfolio or even as their ultimate goal for retirement. You have done very well for yourself and I guess once you own a $40B portfolio a single family rental property does not look very attractive. I imagine it's not that easy to find investments that are suitable for that kind of money. It's the Warren Buffet problem - how do you buy SFRs on a large scale? You can't. For most of us here it's about paying our bills, having the time and the money to travel a bit and feel safe and secure for retirement.

You have almost 40 years of experience on me - I'd appreciate your insights!