All Forum Posts by: Daniel M.

This may have been covered elsewhere in this long thread and I haven't done this myself but what about buying performing or non-performing notes - I am looking at that possibility this year - I am also not cut out to be a landlord and holding a note seems like you become the bank and don't have to worry so much about who is in the property and what they are doing - don't have to worry about maintenance, property tax bills, utility bills, etc. 

@Bob E.  Are you still using Sonya at Prestige?  I was using a handyman who actually says he knows you - small world if true - to do the property management but that did not work out so on the look out for good PM and a good local handyman!  Thanks!

This sounds like a spectacular success - congrats.  We moved to Maryland last year from Texas and I am now getting back into looking at real estate.  If I could just find a few deals like this ......... great.

This sounds like a spectacular success - congrats.  We moved to Maryland last year from Texas and I am now getting back into looking at real estate.  If I could just find a few deals like this ......... great.

All so true … today I was working with the contractor on one of the 2 duplexes I own in these troubled areas and one block over the street was blocked off on both ends by police, who were out there for hours.  Last I checked one man was being cuffed and taken into custody and there were several officers standing outside one of the houses.  This is not good for property values or the nerves of the landlords/tenants.  I am keeping my fingers crossed that the money I have invested in fixing up one of the duplexes will be a decent investment.  The contractor will likely rent the lower unit he is working on and he will be a good tenant who will keep an eye on the property.  The upstairs tenant loves the unit because of the work that the contractor did and the property is getting into good shape, similar to the Airbnb I am staying in which had so much trouble across the street last night.  Good luck to all who invest here and I hope things get better soon for everyone.

... whole street is now lit up with 3 police cars, one fire truck, and one ambulance all with lights on 

... cops just arrived .... wonder what happened

... follow up..  I'm staying at a beautiful airbnb near W Highlands and N. 29th St. and just heard violent arguments, tires peeling out, women screaming, and assumed cops were called .. this is a beautiful Victorian home built in 1895 restored by the owner, whose son asks her when she's going to move out of the ghetto, just be careful where you buy and how much you pay here ... don't be fooled by a low entry price tag

I've been working with an experienced contractor in Milwaukee who told me a couple of days ago that these properties for sale for $10k will need $40k in repairs.  People who think they are getting a house for $10k need to be very careful about the real costs of repairs.  I'm sure a rehab could be done for less than $40k but that would take knowledge of local contractors and possibly cutting corners on the rehab.  The contractor I am working with cuts very few corners and the cost is higher but I think is worth it.  Also, the tenants in Milwaukee don't have the best reputation as far as taking care of the properties.  I've heard many complaints about filthy living conditions, break ins, vandalism, leaving the place a mess, pet damage, etc.  Best to be very careful all the way around - pay as little as possible on the front end, expect big rehab costs, screen the tenants as much as possible, and prepare for the worst and try to avoid.

Nhi.  

I'm in Houston and I did this about one year ago.  I got in over my head.  Paid $22k for a duplex in 53208 renting for $1200 and had a 'mental budget' of $8k in repairs.  I have spent over $25k and the duplex is not yet rehabbed (but part of the reason for that is that repairs have been done when the units are vacant, not all at once, so I get some cash flow from one unit while the repairs are being made on the other unit).  Don't be fooled by the low entry price.  Get a good handle on costs of repair before you buy, not after, like me.  The repair work is not easy on a 100 year old property with lots of 'deferred maintenance' or shoddy prior work - look for electrical problems - faulty outlets, lights improperly installed, knob and tube wiring spliced into romex wiring spliced into BX cable; plumbing problems - lead pipes, galvanized pipes, PVC pipes, leaks, water damage evident in the plaster ceilings and in the flooring; old roofs with multiple patches and multiples layers of shingles with steep pitches; bad siding or asbestos siding that is old and needs to be replaced; absence of storm windows; old windows that don't open/close smoothly and may break; lack of insulation causing high heating bills; cracks in the foundation - cracks in the old plaster - costly to fix; do not be misled by the low entry price - I would focus more on the drive out price - do you want a rehabbed property and if so, what is that going to cost you [could be $30-$50k] or do you want to be a 'slum lord,' i.e., do minimal repairs and have a crappy property that leaks and will never be clean and chase tenants for rent.  I would guess any duplex in Milwaukee for $28k these days will need a lot of work to get back into good shape [easily $10k, possibly much more] and I would not want to rent to tenants who are willing to live in a bad property that leaks - expect to see more damage from these tenants - expect to get calls about water leaks, broken toilets, broken windows, high heat bills, water heater issues, furnace issues, ceilings bulging due to water leaks, possibly ceilings falling down [happened in the last two weeks to me], and potential fires [property across the street caught on fire and tenants left] and so on.  Expect the property to be worse when those tenants leave - expect plaster damage, damage to the wood trim, stuff left behind, and don't expect to get your last month's rent.  Sorry for the length of this response but buying a 100 year old property for $28k and not having a realistic repair budget and game plan could cost you a lot if not careful or even if you are careful.  Best of luck.