All Forum Posts by: Colin Wyatt

Thanks Ryan, great advice. I'm holding back 3% for vacancy (slightly above average of my area), along with $500/mo for maintenance / CapEx. My assumption is 10% rent for property management and 50% a months rent for leasing cost. As I said, we're planning on self-managing, but we want the option to get property management without killing all cashflow.

Hi, I appreciate any time you spend looking at this deal I'm evaluating!

My wife and I are looking to get into our first deal as a house hack. We're looking at a house that's bigger than we intended, but the numbers seem really good, especially for our market, which is light on cash-flow in general. We'd be holding this long term.
It's a 1980s build, 5/4 on one unit, 4/3 on one unit, and an efficiency apartment which has been rented in the past with questionable legality (we'd have to work through the permitting/HOA to get it square). 1 unit is rented only, so we'd occupy one and rent one out for now, but I'm just analyzing as a pure investment None of the rehab needs to be completed before move in, and we'd likely be doing a lot of work ourselves over time (kind of a live in flip).

List price: $454,900
Offer price: $430,000
ARV: $526,000
Rehab: $30,000 (cosmetic, but it has a lot of square feet)
Total Cash In: $58,000 (down payment, closing costs, rehab)
Rent: $4,800 total 
       Unit 1 - $2,200
       Unit 2 - $2,000
       Unit 3 - $600
Total expenses: $2,285
NOI: $2,370
Net Cash Flow: $720 (with property management) $1,380 (self managed)

I show that I'll have about 15% COCR and $142k of equity after the first year.

Thanks for your help with a sanity check and let me know if there's something else you'd be looking at for it. 

I'm interested for sure, though I'm afraid I won't have much to bring to the table. Thank you for hosting and I look forward to meeting you any anyone else in the meet up. 

Hi Nick! I'm not a wholesaler, but I am interested in what you find out here.

Nice to meet you, I'm new to Madison, WI and to REI in general. Looking for small multis. What's your focus?

@Quinton C. I'm a newbie, so please forgive a potentially dumb question, but does it matter very much what is typical of other places? I've heard a few of the podcasts talking about wanting absolutely everything in the tenants name, some saying that even if their competitors do include some utilities, that their slightly lower advertised rent usually tips the scales in their favor, even though the tenant is often paying a little more per month overall.

I'd personally want the tenant to know and take their responsibility in their living situation. I was talking to an apartment manager one time and they had negative cashflow in several units because of utility overuse. They can use as much as they want as long as their paying for it, in my mind.

@Marcus Auerbach Thank you for being such a great resource to the area. I'm not 100% sure Milwaukee is the right place for my money, but once Iook through your data, I'll reach out to your team.

To anyone, I remember J Scott mentioning that rehabs and flips in Milwaukee were difficult as most there are not "used" to dealing with investors. Has that situation improved, or was that maybe overblown and is it just always difficult to find good contractors, etc?

I'm not educated enough to make a worthwhile comment here, but it is fascinatingly interesting seeing so many well thought out responses here. I'd certainly agree to be wary of such levels of hyperbole. At the same time, a lot of the posts I read saying there will be no real consequences have a "head in the sand" kind of vibe to them.

Are the factors of '08 different than this? Of course, we're in an unprecedented time with unprecedented monetary policy. But I'd much rather take a conservative view and potentially miss some upside than forge ahead and go for broke.

I think a great read while all this gets sorted out will be Black Swan by Nassim Taleb. Remember, a 50% loss requires a subsequent 100% gain to get back to zero.

@Nick Peters thanks for the detailed post, really an awesome way to start. I'll also check out your investment spreadsheets, I've always been partial to excel.