All Forum Posts by: Dave Carpenter

I would be one of those ignorant people Buffet is referring to. If you are so knowledgeable in a certain area that you would be losing money by diversifying, then he is absolutely correct. I think those people are very few and far between.

In my opinion you have to weigh the risks of expanding into a lesser known area vs expanding to spread around risk. To me, buying in different parts of the same city will protect you from one community that might be impacted by local politics. This is somewhat rare, but certainly does happen (read: everyone's favorite city Detroit). On the other hand, diversifying all over the country will hedge you against a whole region being impacted by an downturn. The next level beyond that would be to invest internationally.

For me I would value more highly having a brand in a specific city and be able to exercise economies of scale with contractors, materials, etc. over ensuring that I am hedged against any type of economic changes.

At some point I think it becomes a "chicken little" type situation. 6 units in 1 city does not seem excessive to me.

Another simple way to diversify would be to invest in different types of units. Have some larger apartment buildings as well as duplexes or even single families.

Being that the house is in Colorado Springs I wonder if he could market to the Air Force Academy and find a great longer term tenant that way.

Jenkins Ramon - I would tend to agree with you. I like the idea of a possible discount. We will see how it all shakes out and if I will need to offer a discount or not.

I have a duplex 5 blocks away from Wauwatosa and currently rent to a teacher in the MPS system. Part of the reason they moved in is due to this rule. Based on my location it is really a nice requirement for me as a landlord. One of the things I like about it is typically I would be happy to have a teacher, police officer, or firefighter as a tenant. Certainly not always, but of the teachers who have looked at the duplex most of them seem to have their act together.

We will see what happens. I think it may take years for the full effect to be felt, as I am not sure that someone would immediately move out of the area just because they now can. Their are certainly some nicer areas in the city of Milwaukee.

Dawn A. its for me!! now I just need to find $200k

I am sure Dawn Anastasi will agree with me that $200k will go quite a long way in the Milwaukee market. I am looking at an area in Milwaukee that has duplexes and homes in the low 100s in a neighborhood that is pretty safe and near quite nice parts of town. I have a duplex that is bringing in $2000 per month and I purchased for a bit over $100k. If not I would go duplex as it brings in 2 income streams. Less eggs in the same basket. Good luck either way!

Dawn A. - I knew you didn't really work a full time job, see you are hanging out in Cedarburg!!!

When are you scheduled for your showing on SNL then?

Conrad Soboniak - I am not actually part of ant REIA groups in Milwaukee yet. Need to find the time first, and pretty busy with work, church, etc. There is a group of us that are planning to meet up one time though, and I am pretty excited about it. We will even have a famous member who was interviewed on last weeks podcast (Dawn A.) hopefully joining us.

Cedarburg seems to be a pretty good place to live from my experience. Are your friends involved in RE at all?

I currently am working to get my duplex rented out as one of the tenants is moving out at the end of the month. One of the things I have done is allow pets (both cats and dogs) on a case by case basis. This has really opened up a whole other pool of tenants and I charge an additional $25 per animal per month, which brings in a bit more cash flow. So far that has been a really good experience, with both units having cats and no issues. We will see long term how allowing pets works, but so far I am about $1200 ahead by charging for animals. That will help if there is ever wear and tear I end up having to cover down the road.

Good luck on getting your unit rented out!

Nicole,

It looks like you are going about this all the right way. I'm curious, are these houses in Tosa? I currently have a duplex in Washington Heights and I like that area a lot because it is so near to Tosa, yet has lower property values being in Milwaukee.