All Forum Posts by: Jason Macht

Thanks for the response @John Franczyk. I've heard similar feedback regarding finding a strong property manager in WI. I have also been following the FoxConn story and think there's potential there as well. Thanks for the input!

Hey Ibn,

Thanks for the response!

In terms of end goal, I'm looking to acquire multi-families to hold. Ideally something that require only medium to low rehab, and that (obviously) cash flow at an acceptable level.

Approach so far has been working with a realtor in the local market, so yes, MLS listings. I recently started approaching craigslist landlords in hopes they may want to sell. Direct mail I have not yet entertained...

Why not Chicago? Mostly due to the price points. If I had a $1MM+ to burn, then sure, but I can't afford to get into most places in the city, unless I 'house hack' it and even then, most flats are too expensive to make the numbers work. I've contemplated getting into South Loop, but I'd prefer to stay away from condos (i.e. HOAs) and the inventory of multis is sparse. Do you have any specific recommendations that I should consider?

Thanks again!

I've been actively looking for a multi-family investment property in Grand Rapids, Mi (GR) for the past 2-3 months and have continually run into either bidding wars, deals that get snapped up the very next day, or places that need far too much work than they're worth. So I'm contemplating shifting focus to another market that might be more accessible. I've heard from several people on Bigger Pockets that have had success in Milwaukee, including @Brie Schmidt, and I was hoping that I might be able to get some input from the community. I recently drove up to Milwaukee from Chicago to check it out myself and find myself asking a few questions...

• Should I change my approach in GR or change markets?
• What tactics should I consider adopting in a highly competitive market such as GR?
• Is Milwaukee the best alternative market to enter?
• If I enter Milwaukee, what are the zip codes to target and what are the zip codes to avoid?
• What do I need to know about Milwaukee as a new entrant?
• What other markets should I consider if not Milwaukee or Grand Rapids?

Any input is much appreciated!

Thanks for the feedback! Sounds like the consensus is that this one doesn't meet the criteria and I should move on to the next deal... Thanks again.

I'm relatively novice still, with only two deals under my belt and currently I'm evaluating an off market deal that happens to be right next door to my existing rental. My challenge is gauging whether or not I'm being too conservative in my estimates such that I might price myself out of the deal, or if there are other considerations I should be making that would make the deal an obvious choice. With my current assumptions, the after tax yield is ~4%, with is just mediocre in my view. Here are my assumptions:

• Monthly Rent: $1,700 (1% rule - check)
• Price: $180,000
• Mortgage: $153,000 (@ 5%)
• Down Payment: $27,000 (15%)
• Closing & Pre-Paids: $3,600 
• 5% cap ex
• 5% repairs
• 5% vacancy
• 8% realtor/property mgmt fee
• Net monthly cashflow: ~$126 after taxes/insurance/water/debt

So my question is, am I thinking about this the right way? Is after tax yield the right metric? What other considerations should I account for? Are other approaches I should consider that could make the deal more attractive?

For context...

• Location: Royal Oak, Mi
• I would estimate the house to be worth closer to 190-200k
• There should be little to no rehab necessary, the owner has taken care of it well
• 50% Rule: $1700 - 50% = $850 - $821(debt) = $29 cashflow (not great)

Thanks for the help!