All Forum Posts by: Pat Parrillo

Welcome @Mike Lauer

I like that you are thinking big and longterm. $20K a month in 10 years is a great goal. 60 - 75 units may be slim for $20K a month especially if your utilizing property management. May be closer to 100+ but that's getting ahead of our self, but depending on where you plan to invest may work. 

In regards to your three questions. 

1. Couldn't have put it any better than @Daniel Hanson. Follow his lead there. 

2. You can start a thread. Another option would be to do a search on BP and review similar past threads and reach out to those folks, may be more efficient. The BP community is great and most everyone is willing to help so feel free to start threads and as there are always new people joining BP daily. Another way to connect with like minded people is networking events, as mentioned there is the Milwaukee REIA, Brew City Meet Up, and Apartment Association of Southeast Wisconsin. Also, tell everyone you talk to about your plans with real estate and your vision. You'll be amazed at how many friends and family are involved in real estate that you had no idea or how many people they know in real estate. It's like seeing that car you just bought driving on the road everywhere you go, but you never really saw it before. You're filter wasn't set for it previously but it was always there. Tell everyone about your interest in real estate you'll be surprised what you find.

3. Talk to banks now. Let them know you are starting out and what type of properties you are looking to purchase. Don't ask them to jump through hoops and provide you with term sheets and lots of detailed information if you aren't ready to invest yet but have an initial conversation and see if you're a fit. Knowing your lending options and how much you qualify for is important as you start. They want your business. 

Hope to see you at a future brew city meet up or another event. You already took the first step networking with this post, keep it up and feel free to reach out directly if you ever have any other questions. 

welcome @David Benson. 

Congrats on the steps you are taking to get into real estate investing. I think your house hacking idea is a great way to get started, very smart. 

Quick question though, is there a reason you're leaning towards paying all cash for your duplex/mulit? Curious on your strategy. 

All cash is great from the standpoint of cash flow, however, your Cash on Cash return will be less and will make acquiring more properties a much longer process. I guess the real question is what are your long term goals? If it's to own a few properties free and clear and get the largest amount of cash flow from the least amount of properties that's a good start. 

Another idea to consider is using leverage on your properties. Leverage keeps you more liquid and able to do more deals. For example, let's say just for round #'s you have $100K in cash. 

A. Cash - $100K towards one duplex that generates $1,200 in rents a month. 50% goes to expenses so your net operating income (NOI) is $7,200 for the year. That's a cash on cash return of 7.2%.

B. Leverage - $100K and you put 25% down on 4 duplexes that are each $100K. They generate the same $1,200 in rents a month and have the same 50% expense ratio = same NOI of $7,200. Now let's take into consideration you have a mortgage on all those properties and let's assume the debt service is $4,800 so that leaves you with $2,400 a year per duplex. So the 4 duplexes generate $9,600 on a $100k investment or a 9.6% return.

So after 30 years (for the sake of this example let's assume no appreciation) you now have $400K in assets vs the $100K from the all cash deal and In year 30 cash flow (holding everything steady) would be $28,800 vs $7,200 all from the same initial $100K investment. 

C. FHA Loan - put 3.5% down on $100k and live in the property for a year or two and buy another and rinse and repeat and you could see your cash on cash return go up even more. Of course you have to buy the property right and be comfortable with debt, but in my opinion this is good debt as your tenants are paying the mortgage for you.

Wanted to share some ideas to consider. Best wishes on the real estate journey ahead and as others have mentioned check out the brew city meetups, REIA, or other events and keep networking and asking questions. Great community here to help.

Welcome @Leslie Frieze best wishes on the flip. Exciting. In regards to networking opportunities, learning more about financing options and finding deals in the Milwaukee market I would recommend checking out the Brew City Real Estate Investment Meetups held on the third Saturday of the month. 

It's a great networking opportunity and they invite traditional lenders, hard money lenders and other folks that give presentations about financing options and there are also many seasoned investors who are happy to share their experiences and how to find deals in Milwaukee. 

Best wishes in the Chicago and Milwaukee markets. 

AASEW always has valuable meetings and good speakers. Looking forward to attending @Dawn Anastasi

@Michael Kretch I'm not familiar with the Kenosha market. However, I think you've got the right mindset as that area is in the path of progress. With the Amazon fulfillment center along I94 and other warehouses being built up your looking at a lot of job growth. I would imagine the market rents and acquisition costs have a lot of upside. 

On the other hand there does not seem like a lot of inventory. Seems like lot of raw land in the surrounding area. So development may be a better suited strategy. If you find out more during your search I'm all ears and would be great to get your opinions as I'm in the Milwaukee area and have been intrigued by the potential in Kenosha. 

@Ty Johnson Congrats on making the decision to get into real estate. Have you explored what area of real estate you would like to focus on as you begin your journey (buy and hold, flips, wholesale, etc) or still exploring?

Happy to answer any questions you may have regarding buy and hold and purchasing your first property and would be happy to connect you to the right resources if you're interested in other areas as well. 

As a former collegiate athlete myself it's good that you can put that competitive spirit you have into real estate as it is a competitive market, especially today, but just like athletics it's also a team sport. Happy to support any way I can. 

@Cory Bagby welcome to BP and more specifically the Milwaukee market.  I believe we had the chance to meet at the Brew City Meetup recently. 

Let me know if you have any particular questions regarding the Milwaukee market and buy and hold. Happy to continue the conversation....I may be interested in learning more about your AirBnB strategy as well. Best wishes!

@Steven Zabronsky

If you're looking for appreciation and willing to pay a premium then your zip codes are 53202, 53211 and parts of 53207 and 53212. 

If you're looking for where the path of progress is and you want to get in cheap and make a killing in the long run similar to Austin, Portland or Denver I'm not sure Milwaukee is built for those levels of appreciation driven primarily my rapid population growth. Not sure you'll find that in the Midwest. 

Hope that helps.

@Brad W.

I would recommend attending one meeting at each group and see what you like. Brew City is currently free to attend and REIA and AASEW you can pay the one time attendance fee (I think it's like $30, but don't quote me on that) and if you like it I believe you can apply that to your annual membership if you decide to join.

I have been a member of all three groups and currently am a member of AASEW and attend the Brew City Meet-ups. I no longer attend the REIA's.

Here is my take on each. They all have a similar structure with networking before and after with a speaker on different topics for each meeting.  

Brew City - best atmosphere for networking which is the most valuable in my opinion with a great mix of newbies and veterans as well as buy and hold, flippers, SFR, Multi-Family investors etc. so most well rounded group to network with.

AASEW - Are primarily multifamily investors and the majority of the members are veterans who've been in the REI game for a while. I'm focused on Multi's so I like this.

REIA - Largest attendance. You'll find many flippers and wholesalers as well as many folks just getting into investing with a mix of veterans.

They all bring their unique value and I would say try them each out and stick with the ones that most closely align with your goals. 

Hope this helps and hope to see you at a future event!

Donald, 

Multifamily properties are a great form of investing and there many knowledgeable resources in the Milwaukee area. West Allis has a decent number of multi's, Tosa proper is limited yet has many multis just outside of Tosa to the north in Milwaukee and is a market worth considering. It will be more of a challenge to locate Tosa multi's due to the high demand and limited inventory and the cash flow will be tighter. Bay View in my opinion is a great market but I also feel there's limited inventory for Multi's as there are a lot of SFH and Duplexes. Upper East side is great, however those transactions are typically off market and cash flow will be less but great appreciation play and good tenant base so if you're self managing your life will be much easier. I am not familiar with the West Milwaukee or Harbor View markets as much so I won't be able to share insights there.

Happy to share any further details you may be interested in regarding those markets. Best wishes on your search.