All Forum Posts by: Dave Elim
Dave Elim has started 4 posts and replied 6 times.
Help! My wife and I just put down some earnest money on our first Duplex in Wisconsin. During inspection it was found that the upstairs bathroom toilet is not working (plumbers came and could not fix it) and the washer machine in the basement does not work and has stagnant water. So now I'm concerned there's a huge plumbing issue. What do we do?
Also the garage area, separate from the house needs a new roof, but my main concern is the plumbing. Could be over 15k if it all needs to be redone (it's galvanized steel)
Our first property is turning into a nightmare :(
Post: 25% down required?
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- Votes 0
Thanks so much for all of the replies, you all truly make me feel like I am part of an amazing community that is so incredibly helpful. I'll do the conventional loan on this property but for my 3rd-10th I think I'll do DSCR, especially if rates go lower or I find a very sweet deal.
Post: 25% down required?
- Posts 6
- Votes 0
Hi all,
Got an offer accepted on an income property duplex in Wisconsin for 125k and the lender is asking for a minimum of 25% down. Is this normal?
We currently own an ADU that is on our property that we have a HELOC on which he is stating is the reason for the high down payment requirement (the duplex is now considered a second investment property). Our credit is 800+ with no car debt and income of over 140k. Really don't want to put this much down so just wondering what my options are? Find a new lender?
Post: Which cities have the most promise for long-term rentals (cash flow)?
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Quote from @Joe Hammel:
Another Vote for the Metro Detroit Area.
I make $100k/year off 20 doors here. That's not to brag, but when having the discussion about ROI and Cash flow, one can't deny this market knocks it out of the park if done correctly. I can share a snapshot of the breakdown, if someone wants to see the makeup of my portfolio.
Couple hundred bucks a door cash flow, double digit ROI, and yes the prices appreciate and you build equity.
Afters lots of research and experience, we've nailed down the primary makeup of the highest ROI/cash flow potential combined with the highest probability to succeed:
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $250-$350/door (after all expenses and budgeting for maint, capex, vacancy)
Appreciation: 3-15% (has been double digit for a decade)
Location: C+, B-
These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets in the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.
We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.
The bad reputation of “Detroit” comes from OOS investors wanting $20,000, D class properties. We don’t buy those lol.
Are you counting price appreciation? Even at $350 per door, 20 doors nets 84k a year. Just wondering if I'm missing an angle here.
And PS I've found the same formula you have as far as price sweet spot and rent! Although I'm still looking for my first rental in Wisconsin, I think you're right in the middle of where I'd like to be.
Hi all, newbie here. Looking to buy rental property in the midwest (first rental out of state). Wondering what the pros and cons to working with the seller's agent vs a different one who is either recommended by BP or a friend that lives in the state I'd like to purchase in? Is the seller's agent going to try to hide the potential issues just to sell the property?
Hi all, newbie here. Looking to buy rental property in the midwest (first rental out of state). Wondering what the pros and cons to working with the seller's agent vs a different one who is either recommended by BP or a friend that lives in the state I'd like to purchase in? Is the seller's agent going to try to hide the potential issues just to sell the property?