All Forum Posts by: Keith Schulz

@Matt Meyers What lake? I would say check local regulations and permitting for short-term rentals. Also I have a builder who has built several homes on Lake Wisconsin, and done a lot of development around Dane County.

As an owner of rental property and an owner of a tow behind camper this thought has crossed my mind several times. ...but when I think about how much work it is to prepare myself for a camping trip, and how much has gone wrong with my multiple campers in the past it doesn't feel worth my time for a couple hundred dollars. 

Most campers are really cheaply built, and a lot can go wrong, especially for a renter who has little experience camping. Just among the crew that I go camping with here's what I've seen happen just in the past 2 years:

Canopy on a hybrid trailer came loose and flew off in a storm

3 different tire blowouts

fridge door flew open going down the road (latch broke), damaging the fridge, countertop, and food inside. 

Slideout broke and got stuck open.

Water heater element fried from not filling with water prior to turning on the heat

Water heater cracked from not draining properly in the winter

Pump fried from leaving it on prior to closing up the camper then draining the lines at the dump station.

Blackwater valve broke, spraying sewage all over somebody

Charging converter went out

Cable for pop up broke

2 people had roof leaks

I could probably go on, but you get the point, there is more maintenance with a camper than a house or apartment, and if someone isn't familiar with that particular trailer it's easy to screw things up. I think about the time involved in getting my camper out of storage, showing somebody how to hitch it up, fill it with water, turn on the pump and water heater, operate the fridge off of gas, hookup the electrical, and then drain everything when done. It just seems like a hell of a lot of hassle for a small amount of money. While overall ROI is probably great because your initial investment is low there will be a high hassle factor.

In any case, I'm not trying to talk you out of it. If you have the time and tolerance I'm sure a person could make a significant profit. I'm just trying to make sure you realize all that is involved if you aren't a current camper owner. ...and I"m sure the teardrop style camper has a little more simplicity than some other style campers and maybe would be easier to maintain and teach someone to setup. It could be a great way for someone to start and earn some side hustle money to grow something bigger in the future. ...but if you have the capacity, to buy some real estate, you'll not only get the cashflow, you've got the potential for appreciation growth and tax advantages. 

Just a few thoughts, take it or leave it. Again, I don't want to scare off the idea, you certainly could make some $$$ doing this, just playing devils advocate and making you think about all aspects.

I should add, I've had several friends who have rented campers to camp with us, and they've enjoyed the experience and have said they'd do it again over buying their own camper. There's definitely a solid market for this.

@Seth Bennett BRRRR could certainly work in those areas. It's a good way to scale faster, but I'll caution on being too leveraged too. My first couple properties I did pull equity out to buy the next. However, I found myself in an uncomfortable position in 2008-2010 and watched a few highly leveraged friends loose it all. So, now when I improve a property I just leave the equity in it and take the increased cashflow. I am by no means saying don't BRRRR, as it helped get me started and I don't regret it one bit. I'm just saying use caution if you are going to try to be at maximum loan to value ratios on everything. Some would probably argue this point, but I take the more conservative path.

I'm an investor/agent in the Madison area, and while It can be a challenge to get the numbers to work around here, there's definitely cash flowing properties out there, especially off market. I'm under contract for a nice 4 unit in Verona that I found off market and the numbers work great. I've bought 3 properties in the last 14 months all doing well, so don't let people tell you there's no deals to be found. 

If this is your first rental property, I'd recommend looking for a 1-4 family just to keep it simple for your first one?  Maybe look in some of the suburban markets like Belleville, Mount Horeb, Sun Prairie, Deforest, etc. Belleville and Mount Horeb seem way closer to Madison than they used to since Hwy 151 was completed.

Earlier this year, supply was extremely limited and going for ridiculous prices. Supply has definitely improved in the last month and I'm seeing fewer competing offers on things so it seems to be calming a little bit.

Hope that helps,

Keith

@Brandon Palmer welcome! I'm in the area with rentals in Verona also. Happy to connect.

Hi Tim,

You'll love Madison, it's a great place to leave. I'm a local investor and agent in the area. My second house was a house hack, that I lived in with roommates for 6 years. They covered all but about $150 of my mortgage and taxes at that time. I eventually rented the whole house out and then sold it a few years ago. It's a great strategy to start out. I would say you could house hack just about anywhere, but I would focus on where your initial job lands you. Your likely to network with some others at your office or in that area who will also want to live in that area but aren't ready to buy. 

The Madison market is currently crazy competitive like many other areas. We recently represented a buyer who offered 26% above asking price cash and wasn't the winning offer. Save up as much down payment as possible, make your offer desirable to sellers by accommodating their closing date, allowing inspection tolerances, and allowing appraisals to be a bit low, etc. Also, if you have a family member who can back you to make a cash offer while still pursuing financing, that certainly helps too. Lastly, if you narrow in on an area you like, it might be worth doing direct mail to try to find an off market house. Hopefully things calm down a bit by the time you are ready to buy.

Best of luck,

Keith

@Account Closed Forgive me if I missed something, I only skimmed the responses. If it's a side by side it seems like it would be fairly easy to add a second forced air furnace. I personally would avoid the mini splits in our climate (unless a forced air furnace is just way to difficult). I know there's manufacturers that rate them for up to -15F now, but when you need the heat the most is during those extreme times. You don't want it to fail on a -20 day! Not to mention, when repairs are needed, with a forced air furnace the entire heating part of the system is indoors (only the AC compressor is outside). An HVAC contractor wouldn't need to try to fix outdoor components during the winter months. 

Hi Jared, Congrats on your first investments and welcome to the forums! I live in Verona and invest around the Madison area. I'll send you a connection request. 

All Thanks for sharing your experiences and stats in Dane County and the Madison area. It's been an interesting and hard to predict year for sure. Spring started slow, but then July-Oct has been the strongest ever in terms of number of sales.  I'm looking back through our sales data for this year and there's only 5 out of 70 sales that were active for more than 3 weeks (excluding vacant lots). Based on the days on market I think 2021 will remain a sellers market.

It does seem like inventory is rounding the corner, looking at the Madison area in all price ranges. I think this will help calm things a little (in comparison to the 2019-2020 markets). However, I think the lower priced houses around Madison (under $325,000) will continue to be extremely competitive. There just seems to be a huge entry level demand, but no good inventory in the lower price ranges. I personally just bought a single family home in Verona under 300k as a rental, because I think that inventory will get more scarce. 

If someone could find a way to make a decent profit on affordable entry level homes I think they would make a killing. Construction costs have gotten too high to make this possible though. This does make me wonder if condo conversions will come back? There's been lots of multi-family housing built in the last few years, but none of the old multi-family inventory (that I've noticed) has converted to condos to create affordable units. Maybe it's a function of lending being a pain on units like that.

Similarly, as more higher end apartments are built, I think there's demand for affordable rentals as well. I posted a small dated 2 bedroom half duplex for rent for $1075 and had over 90 inquiries. 

In any case, I've rambled enough. Happy Thanksgiving everyone! I hope you all find a way to make 2021 another stellar year!

Keith

@Colin Wyatt I sent you a few lender options via the colleague request PM.