All Forum Posts by: Keith Schulz

@Taylor Horsager The property on Morrison St accepted an offer on 6/16. I don't really like the numbers on it, but I do like the location. That area definitely has upside potential. I think it would be more of a play on the potential future value than cashflow. Make sure you have plenty of money in reserves to fund negative cashflow (or neutral at best) if you for something like that. 

I live in the Madison area and I agree vacancy is extremely low. However, as others have mentioned, you never want to plan on zero vacancy. I use 4% vacancy in my calculations. I currently have two duplexes (had a couple more at one point), and I've never had a vacancy longer than 5 weeks. ...but unless you are doing college rentals where they move out one day and move in the next, you most certainly will have a little time between tenants. According to the local utility company the actual vacancy rate is just over 3%. A few years ago it was around 2%, but there has been lots of apartment construction in the area.

Also, where are you getting 4.1% on a FHA loan? That seems very low for a non-owner occupied loan.

Keep your eyes open for an upcoming duplex on Willy St if you like that specific area.

@Tim Herman $1750 in rent on Brandie Rd would be a big stretch, and likely a very desperate (not well qualified) renter. 

Hi Mike,

If the lot truly is buildable such that another single family house could be put on it, I'd agree, it's likely worth more than $30,000. Your sale price likely would be more sold separately. Feel free to send me a private message with more details of you'd like me to help get you some comps.

The city would like you to get a permit. This doesn't mean that you have to hire the work out. You can still do work yourself and have the city inspector check it. That being said, I have done updating that probably should have had a permit, without a permit. I then disclosed this when I sold. No issues came up as a result of this. It's not hard to obtain a be permit though, might as well just do it they way they want you to.

@Andy LaVoy I know a lot of people do direct mail campaigns, and buy mailing lists of properties in probate or that are non owner occupied. I haven't done that, so I'm sure someone else can advise better on that. I'll tell you how I acquired my last 4 properties though:

1) Foreclosure auction - There was a house I was familiar with and able to access that I bid on at the courthouse auction and won. 

2) Somebody we had spoke with about listing their home 6 months prior called and said I need to sell ASAP. ...and the house was a disaster and smelled like cats. I gave them a price of what it might bring on the retail market if we listed it. I also told them I'd consider buying it for a flip, but that they wouldn't like my number. I told them they were better off  getting it on the market for a retail sale. She called me back the next day and said what would your offer be if you bought it... Done deal. This is a case where having the license led to the deal.

3) I duplex I drove by regularly had a for rent sign in front of it, and I couldn't find it advertised anywhere other than the sign in the yard. I called the number on the sign and asked if they wanted to sell. Sure enough, it was a tired old landlord that didn't want to be a landlord anymore. Now if I see a rental I'd be interested in, that isn't leased by a property manager, I call every time.

4) A family member of someone I know passed away, and left them with a condo. I knew the two kids, and they knew I invested in real estate. They just called and offered it to me for a flip. Similar scenario 2, I suggested they let me list it so I could get them more money. However, the family didn't want to deal with it, and said they'd rather sell it to me if I could make a reasonable offer. 

Scenario 4 was a case of just networking, and people knowing what I do, and what I'm looking for. I think this is probably the most import thing for people. I've gotten other deals just because people know I invest in real estate and I'm looking to buy rentals or fixer uppers. 

Hi Andy,

I'm a Madison local too (Verona actually). Sorry to hear your first deal has been rough. Hopefully you are on the upside of it now. 

I think I know which lots you are talking about in Mount Horeb. Definitely get some contractor pricing on what you'd want to build and run all the numbers before buying. The cost of construction has gotten out of hand, and cashflow is a challenge unless you are putting a huge chunk down. 

Getting your license can definitely help if you are buying properties on the MLS. However, I haven't seen many good deals on the MLS in the Madison area lately. I am a licensed agent/broker, and the last 4 properties I've purchased have been off market. I'd suggest looking off market for deals, just about anything in Madison on the MLS that is priced well will have competition. That being said, you can certainly make some additional money by working as an agent on the side, and have a little more inside information for yourself. Once in awhile a great deal will come along on the MLS, and the license could help when the market finally shifts again.

Best of luck. Feel free to reach sometime.

Keith

John,

I'm a broker and investor in the Madison area. if you want to send me a private message of what you're looking for, I can  help you out.

Hi Samantha,

Are yo u intending to owner occupy the duplex or is it strictly an investment property? It makes a big difference in terms of financing. If you are owner occupying one of the smaller local or regional credit unions may be your best/cheapest option. If you are buying as a non-owner occupied investment property, you may want to talk to a mortgage broker who has a variety of options. Also, it depends on if your goal is the lowest down payment or the lowest expenses or whatever works best for your situation. I'm an agent and investor in the Madison area, and I'd be happy to provide you some local lender names if you want to send me a private message. 

Keith

@Laura Rolerat I'll send you a PM with my contact info. I can likely help your daughter. 

Hi Jason,

Welcome to BP. I'm an investor and broker in the Madison area (Verona to be specific). Feel free to connect with me here on BP, Facebook, or Linkedin. Is there a specific type of real estate you are looking to get into (flips, rental, commercial, etc)? There are lots of great resources here. Also, the BP podcasts and books are great for learning and understanding the basics.  

@Dave Corfman Good catch. Sorry, my brain registered Randolph when I took a quick glance. Yes, I would agree that Stoughton has better shot of achieving $1250/month rent.