All Forum Posts by: Casey Kooiman

I found a property listed by a wholesaler and would like to submit my offer. They will be reviewing all offers in a few days. Is there a good resource or information to walk me through this process? I am confused about which financing to obtain? What costs I need to cover? How inspections work? What form I should use for the offer? And a million other things. Any advice would be greatly appreciated.

@Daniel Hyman Thanks! I see you're a CPA in Milwaukee, which is where I have my properties. I have someone there who prepares my taxes, but I'm not sure he focuses on real estate besides what he does for my tax returns... https://www.tosaaccounting.com/services

Would you suggest finding someone more specialized?

Would an extra bathroom raise it that much? I think it definitely can in some markets - for me, it would help in resell but not in increasing rental prices. Where are you investing again? I would look at the total cost of the reno and see how long it would take to recup that based on expected cash flow (not total month's rent since you still have other fees to cover on a monthly basis like insurance, taxes, etc). 

Is that tenant planning to eventually move out? Sometimes I like having long-term tenants who pay a bit less but are great at paying on time and taking care of the place.

Remind me of your long-term goal with this property? I think I recall it wasn't cash flowing as well as you'd like. Are you checking comps in the area on what is possible? Where is yours priced comparatively?

@Jonathan M Peters Did you ever add that garage? I thought about doing that on a property but could never get the numbers to work. $50/$100 extra would mean it takes many many years to pay off... and by that time the garage needs to be repaired or replaced! Also garages always seem to give me the most headaches at the properties that do have them (generally broken doors).

Good morning from WI!

I currently own a few investment properties myself. I'm interested in partnering with a friend to purchase some properties that way though... but I'm a bit stuck on the LLC. I have two main questions:

1) LLC Creation - I've created two LLCs for myself online which was pretty easy (in WI)... but what option do I need to select if I have a partner? Article 5 asks if management should be vested in "a manager or managers" or "its members". I assume "its members", but it doesn't seem to be much different when adding a partner. Am I missing anything from an incorporation standpoint?

2) Bank Account - So my friend and I need $40k for an upcoming deal. I assume we can't just transfer $20k each into the account. Does the LLC need to accept it as a loan or gift or something else so we don't "pierce the veil"? How do we pull money out if we need it? Would we just essentially pay back the loan?

Thanks, everyone! I've already learned SO much from BP, and I wouldn't be where I am without you all!

@Jonathan M Peters Might be worth dropping the property if it isn't bringing in the return you want. If it is financed, it will also hurt your debt-to-income ratio if you seek future financing for additional properties. I think MKE is still a seller's market...  

What has been your biggest struggle with moving forward on your own? Financing? A down payment? Maybe the BP group can help you get past any hurdles!

@Jonathan M Peters Hey there! No new acquisitions since the post, but I did end up renting out the 1 owner occupy I mentioned after living in it for a year! I'm actually renting an apartment now close to the twin cities trying to figure out my next move (maybe buy something up here, but prices are high atm). I also SOLD the condo in MKE - the cash flow was great, but it was a studio so turnover was just too much for being an out of town investor. I made a return of about 30% on that investment though since the market was so hot! I invested that in stocks & index funds. Not so much real estate related, but I've also upped my contributions to my retirement funds to get a healthy mix of investments. Still aiming for that multi-unit though! 

Wisconsin is a great place to start! I got involved in real estate (Milwaukee) when I was 25 and single (no family in the area, no real estate experience or mentors yet... just a ton of online research). I used WHEDA to purchase a duplex (great program to look into for a duplex or 4-unit in Wisconsin). I lived in half (with a roommate) and then had tenants in the other half. WHEDA requires minimal down - which helped me since I didn't have much savings yet (3.5% down). I quickly learned how to fix things myself, how to manage tenants, how financing worked, etc. Even better, I quickly saved up enough money for another property since everyone else was paying my mortgage. Bought a condo for 60k with 15% down with an in-house mortgage from a local bank (3/1 Arm). I later refinanced out of my WHEDA loan (must owner occupy) into a conventional so I could eventually rent it out... The cash flow from the three units I mentioned enabled me to buy two more properties recently (1 investment SFH and 1 owner occupy, which I plan to rent out after a while). I'm now looking at my next opportunity - hopefully a multi-unit I can purchase with some cash, some equity and some financing. My strategy is slow and steady, but all properties have very healthy cash flows with minimal down. Have to keep in mind your debt to income ratio for the long-term though if financing - that would be something I wish I understood in the beginning. Sorry for the ramble! Your strategy may be very different if you plan to do this full time - I have another FT job I love hence the slow and steady mentality.

Originally posted by @Rob Beardsley:

You can create a single purpose LLC that owns the property and you can let family and friends buy partial ownership in that LLC.

 That sounds great! I'm going to look into that method.

@Marcus Auerbach Thank you very much for the response! Definitely agree on the statement regarding cheap vs. good areas. I've definitely learned that one and have a mix of properties in varying areas to prove your statement, haha. I would say my equity between the 5 properties is 80k. I believe it depends on the lender, but could I borrow some of that to pay for a future investment? What is the general percentage that can be borrowed for another investment? Based on the cash flow, I could probably buy a new property a year if I commit myself to it... I just figure there have got to be ways to grow quicker now. Private money should be possible if I can figure out a way to structure it properly.