All Forum Posts by: Sara Zielke

Thank you so much for the quick responses! @Darius Ogloza, we are planning on buy/hold for the majority of the properties that we intend to buy. Once we reach the max conventional loans that we can obtain,  we will look at our options to see if we should sell off a property to finance larger investments; if we'll move to hard money investing; or if have enough of our own money to continue to invest without a bank.  @Marcus Auerbach, I think you are right in that us being newbies and not having experience behind us, we have gotten into a bit of deal "analysis paralysis". We are trying to cross all of our T's and dot our I's, but maybe we are being too conservative. So it sounds like you are suggesting that we more or less 'self-insure' using property equity over time for items that don't need to be replaced in the near term rather than adding those items into the capex model? The roof, for example, are you saying that if the plan is to hold the property for a long period of time, then we shouldn't bother putting aside money for the roof if it's young in age? @Alex Statza and @Dave Carpenter, thanks so much for the insight regarding costs. I will look to adjust our model accordingly. 

Hello!

First time poster and newbie REI. My husband and I have been trying to get into REI for almost a year now. While the market is a bit nuts now (thanks @MarcusAuerbach for your excellent market updates!), even if the market was great, I can't make a deal work on paper unless the property sells for under $100,000. My husband and I rehab'ed our own house mostly ourselves, so we have some knowledge on pricing for things like CapEx, but maybe I'm overestimating? We're mostly looking at older homes (duplexes-quadplexes), as that is what the inventory in MKE mostly consists of, in Bayview, St. Francis, West Allis, and areas around (not in) Wauwatosa (Washington Heights, Coopers Park, Story Hill, etc.). I'm hoping for some advice on where I'm going wrong with my analysis. Taxes and CapEx seem be killing my deals. I can't do anything about taxes, so I can only assume I'm estimating too much for CapEx. I would appreciate any help I can get!! I've listed below a sample of my CapEx analysis for a duplex. My CapEx is also assuming that everything is new which makes me think that it's actually an underestimation. I'm also estimating 10% for repairs since the homes are older and 7% vacancy (which I still need to verify with property managers- if anyone knows a better number here, I'm open to feedback). My husband and I plan to do the property management ourselves, but I am including an 11% PM fee just in case things change in the future. Thanks in advance for your help!!

Sara Zielke

Sample CapEx Analysis for MKE Duplex. Home ages range from ~1900-1940