All Forum Posts by: Matthew Meunier

@Tato Corcoran - your realtor and PM should be walking through the properties you’re looking at, taking videos over pictures, but pictures help too, and providing you with a scope of work and the costs prior to even thinking about making an offer. Then, you should have a trusted contractor and inspector to verify the scope and provide there’s. The upfront due diligence will save you thousands on the back end. Tom from Shamrock Building Inspection Consultants and Al from Wall to Wall home inspections were both previous contractors who got into the inspection business. I use them religiously, and also put forth my own scopes and videos whenever I’m helping my out of state clients in a wholesale or traditional home sale transaction. Your team should be your market! Direct mail is great but the benefits won’t be seen until 6-12 months down the road and will need to be consistent to have any success.

Hi @David Miller - congrats on closing in on your SFH! Have you come up to MKE to drive the different sub markets? It's quite diverse here and will take a while to get a handle on, and seeing where you're investing will help tremendously. I invest, manage, and sell throughout SE WI and would be happy to chat about the market and areas. Best of luck!

@Mayson Madden who is paying for heat and water? Unless you left those details out, I only see 1 furnace so 1 heating source. Is this a furnace or a boiler? South MKE tends to have a lot of properties with boilers, in which case, you’ll have a heating bill to pay every month. You can RUB the costs of this onto the tenants. Same as water. But you’ll want to understand your annuals and break them down to see what a fair payment is without bludgeoning them right away when you first take over. Think gradual as Tim mentioned, but you’ll definitely want to cover that cost or you’ll be flowing red from the start with this one. With a flat roof, you’ll also have to factor in a higher repair budget - I always use 10% because contractor pricing is ever increasing. And in a 1922 home, which probably hasn’t seen much love, there will be more repairs to handle in the 1st few years. Whenever I walk a property for myself or for a client, I love when the tenants are home because I ask them - what doesn’t work? What has your landlord neglected? What leaks? How often does your heat cut out in the winter? - you’ll be surprised at how much they open up the more you ask, and when they do, keep them going. You’ll know right away what kind of maintenance attention was given to the property and what you’re in for.

Hi @Laurie Williams - I have a few clients who are strictly BRRRR investors but the sub Milwaukee markets they are targeting aren't providing the numbers they're pursuing right now. 1% is the new norm and you have to be willing to accept more risk if you want to push this margin further in class C or class D markets, which isn't something I'd recommend as your first investment out of state. The opportunities are out there but you'll need to establish good relationships with multiple agents and wholesalers so your pipeline of leads stays plentiful. Rehab costs on a lot of Milwaukee homes tend to be larger as @Eric Kovacevich mentioned. A plethora of MKE homes were built in the late 30's to early 40's, then another surge hit in the 1950's. Northwest MKE and areas near Washington Heights saw a surge in BRRRR type investing and I believe opportunities still exist here. One thing going for BRRRR's is the market supply is so limited (35% less new listings compared to last month and down 10% YTD) so although you may have to pay more, the median sale price in MKE has increased to around 190K for April 2020, and sits at 175K over 12 month rolling price point. You'll have an opportunity to potentially cash in at a higher appraised value due to sale prices increasing. This of course, is a risk you have to be comfortable with. Refinancing on investment properties, specifically FHA, is a no-go right now. However, if you have a conventional loan with a good LTV ratio, you can get a refinance done. Lenders are putting the squeeze on lower LTV ratios due to COVID so you'll need to come in with at least 15% when you find a deal, per some conversations I've had with different lending teams.

Hope this provides some insight for you.

@Vanessa Raquel Magana leverage can be a beautiful thing when done correctly. Based on your price point, you can easily find a duplex in a number of B markets that will provide cash flow and appreciation opportunities. Supply can be tough to come by right now, and a lot of investors are competing for the same thing. With the reserve well to consider, you'd want to migrate into more of a B area than C as reserves will dry up quick with rehab/capex costs in those markets. I'm seeing a lot of 2-4 units being sold at 100x the gross monthly rent, and in the A & B neighborhoods, most times at even higher multipliers. This can make for slim pickings on cash flow when you factor in management costs, especially being from out of state. You'll want to find something with potential value add and the ability to increase rents $200-$300 if you're looking at strictly cash flow. As it pertains to the tenant finding concern and receiving rent, I wouldn't worry. Aside from helping clients find investment properties, I also manage and can say traffic hasn't slowed down one bit. Tenants are on the move, looking to rent, and virtual showings have been the name of the game since COVID effected traditional business operations. Out of 700+ units managed personally, I've collected 98% of rents in both April & May, with minimal tenants effected with hardship/job loss. With supply shrinking, and some buyers getting spooked, it's still competitive and still a great time to buy. Hopefully this helps add to what others have stated and levels with your decision making concerns. Best of luck!

@Rick Michaels as others have said, it can narrow down to the type of investor you are. Milwaukee is so diverse and each area can offer different types of investment strategies. I personally invest in Walker's Point and West Allis as both offer great opportunities on appreciation and cash flow. Other areas mentioned on here are all great as well. I'm currently in the middle of a house hack out in West Allis. My wife and I purchased a duplex with a private basement to the lower, and have completely gutted and renovated the lower level. Now I have the luxury to BRRRR or flip as my rental margin will dramatically increase for the lower, and eventually the upper, or convert this into a SFH and flip as houses around my neighborhood have sold for great prices. Each market can offer an investing strategy for you, and is something you'll need to identify first. Best of luck, and continue to network!

Welcome @David Mo - interesting time as any to get started in real estate! You've done the important part of identifying the strategies you want to move forward with, and ones you're curious about. In the end, you'll probably try multiple and stick to the ones you like most. I invest in Milwaukee and surrounding areas as well, mainly in MFH, and have completed two house hacks. If you ever want to chat, I'd be happy to share my insights. Best of luck, and hope all is well!

@David Barnett

Hey David - depending on the type of loan, yes, I've personally seen pull back. A lot of my clients are OOS multi family investors who use commercial loans at 20% down versus the typical 25-30%. The lender I refer out said first hand they're pulling back and in order to be approved, the borrower must be an A-A+ type with a great deal of loose capital on hand. DSCR's have increased from 1.2 to 1.6 or they must have 12 month reserves if below the line. I haven't had any pull back on the conventional Fannie/Freddie loans though.

Hi Chari - depending on the type of loan will make a difference in who you go to. For any commercial loans, I'd use Andrew Botzau with US Bank. 80% LTV on 25 year notes with rates from 3.9-4.5% - asset and credit pending.

@Paul C. Congrats on the success you saw with helping your parents out! I'm sure they appreciated that greatly. Much to learn and many connections for you to make. Step 1 of getting involved in the BP community was a good one!
As for Milwaukee, it's as diverse as I'm sure many cities are, with room for opportunity and a lot going on externally and internally which is generating a lot of hype. In any sense, the only way you're going to find success is to build a trusted team and grow your network. Feel free to reach out if you'd like some more insight on MKE.