All Forum Posts by: Jason V.

Fear is very common when dealing with the unknown. A thorough education of real estate and analyzing your strengths, weakness, opportunities, and threats will help guide your way. If you know that you have a good handle on a situation, you will be more prepared when something comes at you from left field. 

As you learn more about real estate, experience will help guide you. I am by no means a professional full-time investor, but do have a firm understanding on what I am dealing with and where I need to go for the next step. I credit that to Bigger Pockets and additional research that I have conducted over the years. Remember, education helps negate fear!

@Alpesh Parmar Good idea on checking with insurance agent. I learned a lot from investing in an old house. Not sure I would do it again unless the return was very good, but each house is unique!

Nice job! I am much more familiar with Kenosha and the Milwaukee area, but Racine has some gems in it!

I had a contractor that compared houses to people. He said that a 100 year old house is like a 100 year old person that needs medical care more than a 25 year old person. Perfect analogy because 70 percent of my time is spent taking care of my old house. 

Pay special attention to the electrical, plumbing, and foundation. Even if some things are updated, you cannot be absolutely certain what is behind the walls. A good home inspector will help you with your decision. Good Luck!

@Frank Geiger My tenant went directly to their insurance company and took care of it. It was a very freak storm that uprooted a lot of trees in the area. I would have sworn they had a tornado touch down!

In the last three months I have had some unexpected issues at one of my rentals. I needed a full roof replacement (bad storm), a tree fall on my tenants car (same storm), and two furnaces went out in my triplex. Luckily, I was able to have insurance take care of some of the roof and had enough money set aside to keep me from going in the red. 

I have talked with numerous investors recently who did not budget for repairs and capital expenditures in their pro forma. Put your money aside for the rainy day! It is not a matter of if it happens, but WHEN it will happen. 

Just putting my experience out there to remind others that life happens and to keep someone else from unnecessary pain. 

 

I got an estimate last year to replace some knob and tube in my triplex. They wanted about $10,000.00 just for the two upper units and he followed that with, "but I don't want to do it". I think many electricians would rather do more available easy work than have to rewire old homes. The trades are in very high demand now. The electrician recommended that I leave it, as he didn't think there was anything wrong with it. I spoke to other electricians that also said leave it in, as there were updated panels, basement wiring, and kitchen wiring already in the house and inspected. I still plan on updating additional outlets and lights, but am waiting for market demand to decrease so I can get a more realistic price.

I used eRentPayment until they kept one months rent from me and other customers when their third party payment processor went bankrupt. Their response to the incident was nothing less than amateur. Since then I have gone to Cozy and have been far happier. I would be very cautious with eRentPayment, as they were not at all responsive to landlord loss during the initial bankruptcy. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $115,000
Cash invested: $25,000

This was a property that I took over. I had to do extensive renovations in the lower unit and added some laminate flooring to the upper unit. My properties are always a work in progress, as I like to keep them up. I plan on painting the house and continuing to improve it.

What made you interested in investing in this type of deal?

I always wanted to renovate a rental property.

How did you find this deal and how did you negotiate it?

This was a property my wife inherited. Thankfully, she let me fix it up and we kept it. It has been a solid cash flow producer.

How did you finance this deal?

Traditional bank financing and received a cash out for the renovations.

How did you add value to the deal?

The decks and porches were all upgraded. The interior was painted and new cabinets and flooring were installed. We got rid of most of the original tenants and added new tenants who were much more responsible.

What was the outcome?

Still keeping this one!

Lessons learned? Challenges?

I learned a lot about quit claiming, multifamily insurance, and cash out refinancing on this one.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Citizens Bank of Mukwanago was very helpful with this investment.

Thanks for the replies. I was thinking the same thing, but wanted the perspective of other investors. I eventually want to sell them both and do a 1031 exchange for a larger multifamily, but not there yet.