All Forum Posts by: Nate B.

Interesting @Rob Bergeron. I'm gonna assume they owe little to nothing on this property and have owned it for some time.
Do you mind sharing what you offered? When you say the basement unit isn't really a unit, how many units do they have then? Also, is there rent control? 

Originally posted by @John Sherwood:

Hey @Nate B.. NOTE at the bottom "Owner pays utilities." Probably doesn't have separate meters. So, you need to factor that in. Though, I suppose you could look into trying to split them through RUBS (ratio utility billing system), or putting in things like True Submeter.

But, when I ran the numbers for it a couple of weeks ago, the landlord utility costs made the numbers not work for me.

I'm working on another deal (not pursuing this one), so I'm happy to share what I have with you to see if it aligns.

Hey  @John Sherwood! I see you're local to the Bay Area and are also considering investments in the Louisville market. We should connect via zoom or in person and chat about strategy. I'm local investor looking to grow my portfolio in the Louisville area. 

Originally posted by @Matthew Tuley:

A lot of units! I didn’t dive too deep in the numbers. I like the area I lived 2 blocks over for a couple years. The houses down there are old but hold value! It’s an interesting area B and C class properties just a few blocks away yet plenty of A class on that street. I am boots on the ground I’d be happy to put you in contact with a realtor who specializes in that area. Let me know if ya have any questions about the market or area. Good luck!

This is great content! I'm still doing my homework but will circle back once I get things finalized. I'm currently in the Bay Area but recently accepted a role that will have me their 10-15% throughout the year. I'm looking for C/B properties in B/A neighborhoods and based on what you've said so far, I might be barking up the right tree. 

What are your thoughts on the deal below?

https://www.redfin.com/KY/Louisville/1393-S-3rd-St-40208/home/84213664?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

@Tyler D'Alessandro

Buy! Why? Simple. Limited supply and growing demand.

Supply of land is limited ( Bay Area is surrounded by water or mountains) and demand is growing ( those who own aren’t selling and those who can afford want to stay here).

Plus, rent control is a policy that hurts the people it is intended to support ( check out Milton Friedman for this Economic theory). In other words, the harsher the rent control, the higher the property values.

Want facts; check out rent control policy’s in San Francisco, Berkeley, Oakland, and Richmond; the formers are strict and prices reflect that.

Richmond has the most relaxed rent control ordinance while San Francisco has the most strict. And priced reflex that.

Finally, property values in the bay are based almost entirely on the building value, not land. In other words, a 1M duplex probably had a 250k land value, meaning you get a great tax benefit due to depreciation.

So when the land cycle picks up (note I said land cycle not property) we will see price appreciate due to land. And right now, IMO, land is cheap.

That’s why I’m loading up in cities like Richmond because the land value is cheap relative to other Bay Area cities.

Originally posted by @Brett Kash:

@Nathan Belete the link you posted is in what I would consider a near D neighborhood. You can make money with rentals in that area but it’s high turnover and you will have a lot of tenant issues more than likely. Anything west of Holton will be a similar story. I live about 12 blocks from this house (4 blocks east of Holton). Unless you have a boots on the ground property manager with experience in neighborhoods like this and a trusted GC for the remodel you won’t likely be successful. If I were you I’d try to stay in more of the B to C+ Neighborhoods as an out of state investor.

Brett, that makes total sense. Thanks for info. What would you consider to be C+ to B neighborhoods?

Thanks @Frank Hinck - Which  podcast would you recommend? 

Thanks makes sense @Nick P.! Given the proximity to well paid individuals, it doesn't make sense why properties west of the river would decrease drastically. Normally, I'd expect a gradual decrease proportional to the distance covered west. The huge price swing seems to indicate, from a stats perspective, either an arbitrage opportunity or a factor that I've yet to take into account. 

@Joe Scaparra Yes, I have. While that particular listing is for OO, there are many that are available to investors. The one below is listed at 2.5K with 75k of estimated repairs. These opportunities are endless and I'm curious why?

https://www.redfin.com/WI/Milwaukee/629-W-Clarke-St-53212/unit-631/home/168179032

https://www.redfin.com/WI/Milwaukee/629-W-Clarke-St-53212/unit-631/home/168179032

Hi All,

I am an investor from the Bay Area looking to expand my portfolio out-of-state. I'm looking at the numbers in Milwaukee and they just don't make sense; see attached links. 

This duplex that is on the market for 15k, has been listed for over 100 days, and is surrounded by other duplex's priced between 100-400k. The description says the property needs 91k in renovations, lets round up and say 100k. That would mean this duplex would cost 115K all-in. 

Here is the kicker, section 8 payment standards in Milwaukee ( see attachment) pay 1k for a 2 bedroom unit. Thats 2k per month in gross income for this duplex. 

In other words, a 115k investment would yield 24k per year in gross income; a break even of 4.7 years. When looking at the CAP rate (using estimated annual fixed cost of 4k), thats a 17.4% CAP.

What am i not seeing ? There are so many opportunities that I'm starting to wonder why people aren't buying. Whats also interesting is that property values jump 10x (in come cases) when you go east of the Milwaukee river. 

Property Link:

https://www.redfin.com/WI/Milwaukee/2556-N-Richards-St-53212/unit-2558/home/170679097

Section 8 link: 

https://www.hacm.org/Home/ShowDocument?id=5101

Thanks for the mention @Nick James, I'll be there!

I have my B.S. in Applied Mathematics and Statistics and currently pursuing a masters in Predictive Analytics. My plan is to leverage my W2 income to buy as many rental properties as possible. Currently have a duplex under my belt.