All Forum Posts by: Adam Gollatz

Wisconsin bank and trust and waukesha state bank are two that I like. I also have a contact at tricity. Send me a message if interested, I try not to put contact info out there publicly.

I would likely see as you shop for refi rates what they can offer for new acquisitions. In commercial the more business you can bring the more negotiating power you got. It’s probably not worth working through a commercial broker for these.

Depends on the bank, but likely they will get a 3rd party independent appraisal. Some smaller local banks do it all in house which can be nice. You never know for certain, but comps are a good starting point. Thats why exit strategy is so important if you are BRRR with hard money.

Hi @Gus Muller, I went through a nightmare with a condo investment in Chicago not too long ago and from my experience the biggest piece of advice is check the condo association. You arent buying a property as much as you are basically buying into a business, and a business run/managed by volunteers. Assessments can change, even worse special assessments can be levied, and they can change rules at almost any time. The building I bought in to had .5 months reserves, a small association of 11 units, poor management (the board was being run by non owner occupants), you name it-- so it was definitely an outlier.

Ive also noticed that condos tend to seek their own level pretty well between associations and FMV of rents of apartment buildings. In the uptown area for instance, Ive looked at condos and noticed prices ranging from 90k to 150k in different buildings for comparable 2bd/1ba ~1000sf units. When I looked at the 90k unit, it had a substantially higher monthly assessment making the total monthly payment approximately the same as the 150k unit and the total monthly payment came in usually slightly above what apartments were renting for, likely because condos tend to have high property tax and insurance burdens.

I think if you are going to win with condo renting its on a short term scale. So it would be for a substantial appreciation play, you bought at a huge discount, or you are renting it for a short period before you move in/after you move out. A 90k 400sf unit in st paul doesnt really fit that description from what Ive seen on the MLS.

@Tina Trussoni Keep looking and also examine your business model. Check out some of the local REI meetups and see what others in your area are doing.

@Marcos Paulo Cerra I think thats because of what I see in my area. A lot of the people doing BRRR "successfully" (getting all of their money back or extra money at refi) are doing it in C-/D areas where appraisals are coming in really high. I wouldnt want to have a 60k mortgage on a 40k property that sold for 50-60k in 2005.

@Tina Trussoni I dont know if I fully understand your example, but I understand your question. 

Thats because houses that work as flips, generally dont work as well for BRRR. For instance, you would flip a nice 4bed 2.5 house that might sell for 300k (buy for 120, put in 100, and maybe another 30k in costs leaving 50k in profit). But it would be hard to justify the rents of ~2200/mo to make that cash flow and cover maintenance, repairs, cap ex, etc.

I think in your example you might be pulling out too much money. You only want to pull out what you have put into it. You can pull out more, but you want to make sure that the cash flow from the property would cover it. If you have a place you bought for 50 and put 20 into it (70k total investment) you dont want to pull out 125k just because the bank will let you. 

Message me if you want to chat more.

You come up with your ARV, subtract out your costs, subtract your profit, and that is your purchase price. Now whether you want to value the ARV based on potential rent from 3 units, the previous rent from the duplex (2 units), comps in the area, tax assessment, etc that depends on how much competition there is for the house. Id be conservative in approach and try to come up with a number that is fair to both you and the seller.

Hi @Riley Brown

two great posts from the guys above. Im active here in Milwaukee as well as a few other markets. All I will say is house hacking is great, buy a quality property - the more units the better, and DONT WORK FOR FREE. There is plenty to learn in REI from property management, maintenance, construction, deal sourcing, contracting, etc and it is all labor intensive and any serious investor you can learn from pays for these services. So if they cant pay you, they aren't worth your time.

Take @Matt Maurice up on his role.

Feel free to message me or connect if you want to chat more.

Im not sure how much these taxes are, but what I would look at doing is 1031 exchanging the rental into a rental property in NM. After a reasonable period, I think maybe 1 year, you can convert that NM rental into a primary residence. At which time you sell the colorado place and like dan said, if you lived there 2 of the last 5 years exclude capital gains and use that to pay off any debt on the NM primary residence.

Im not an accountant or tax advisor, so I would consult one of them.

Depending on the uses of the properties it would fall under 1031 or 121. The condo and house in colorado, are they rentals or primary residences? The house in new mexico, is that going to be a rental or a primary residence?

@George Kratee  It would really be no different than any other lease. You and him just have to be aware of the fact that the rental income drives profit and profit drives what an investor is willing to pay. Minneapolis is generally around a 6-8cap, so for every 1000 loss in market rent (per year) thats ~12-15k in sale price that you will lose.

Now is it a duplex (2family) or a 4 family?