All Forum Posts by: Scott Schultz

Thanks for that @Peter B. everyone has a different way of investing and what works for one does not for another, I keep my properties maintained well, plan for the future when doing initial rehabs, and use a professional manager, we also tend to charge premium rents, and allow pets, most of our tenants have stayed for many years to this point, and take pride in the home they rent from us, there are exceptions, and the rougher properties that cash flow better can come with more challenges, but the entry point limits my overall risk as generally I can pay back the initial investment in 5 years or less, they are mostly SFR's so i have a large buyer pool if I want to exit. at some point I will get board with these, and move to A-B multi, then probably NNN Commercial, my only thing with deals like yours is, with Debt I dont see how they cash flow. I have run the numbers many ways and they either break even, or are negative each year, at least in my area. I just ran a 10 unit (C-B class) at $450K looking at the average expenses over the past 5 years, its fine with no debt, but is negative on a 15 year, and positive like $2500/year on a 30 I just cant see that being worth the work you would put in. in a rough year you could easily go negative, I have looked at several of these recently, and this one is at least positive on a 30 most are not. maybe i dont understand. So for me I will stick with what some will call PIGS, I know many a landlord that ran portfolios of these for decades, and have done quite well. and if they become headaches I can always 1031 them to something else.

everyone has a different strategy, but if it doesnt make money on a 15 year assuming you could borrow 100% dont buy it!, the way i run my numbers, you would loose money every month.  the mortgage alone is $3164/mo   ($375K @6% for 15 years)  I use 6% for potential rate hikes at renewal over that 15 years. your other expenses eat up everything left over. my opinion is to only buy  crazy good deals right now, as our market is inflated. I just locked sown a 3 unit in SE WI for $46,500 with gross rents $1,650/ mo taxes are $1872, and all utilities are separate,  these are the deals that make money. add in the appreciation for buying a great deal, this one last sold in 2002 for $93K so i can pull 100%+ back out and still cash flow like crazy.   Your deal does not look great. 

@Luke Aubut I dont have an HML for you, but i want to help a little with your education, most REO Sellers (assuming the deal is REO) require a Pre approval, not a Pre qualification, i dont know of many lenders writing pre qualifications any more as they generally are worthless. You should also have been and continually shopping local smaller banks and CU's working with their commercial lender on something that works, if you have some cash saved, a decent job/income, and a good credit score, you should be able to get fix and flip loans fairly easily from a small bank. Not all want this type of exposure, but some do and would be happy to work with you, hope this helps.

@Derek Antonissen Im saying be cautions buying now, Prices are inflated, I watched the last crash as a Broker listing foreclosures, and saw plenty of people jump in when the market was good, and many lost them when the market tanked and they could not support the value when they had to re-up there loans.  its a bad time to be a buyer because prices are high and there is lots of competition, my last 3 flips (since Jan 1st 2017)  have been on market 10 days or less before an AO now is not a great time to buy, there are deals, but they are few and far between. 

As a Broker, i can attest the market is hot, and prices in some areas are starting to rise, its not stupid yet, but the lending hasn't gotten stupid yet either. my outlook is one of 3 things, we are one "major event" (terrorist attack, war, natural disaster) away from a market shift, so far gas is rising post Houston, and all is silent about the North Korea missile. I think we will be ok for the next 12-18 months, or the end of the Trump Presidency, regardless of your politics, the stock market loves Trump, so housing tends to follow generally by a year, this time it was right on que. I am only buying great deals, and being cautious, Honestly I rooting for a downturn so I can buy when everyone is selling. Right now though is a great time to be a seller, and bad time to be a buyer. Remember, this is an opinion, and it didnt cost you anything, so take it for what you paid for it. 

@Chris E.  When you say Pre-fab what do you mean? Modular or Manufactured? huge difference.  we recently researched Modulars, and at the end of the day you only save a little time vs site built, cost is about the same in a turn key situation. Manufactured on the other hand are cheaper, but they tend to depreciate, over time, and are not conventionally        finance able,  making it difficult to sell if you need to.

Hire a PM and have them evaluate what rent should be, the PM i use covers your area and is managing 400+/- units all over northern and NE WI

What I see as a broker, is only the top 20% of agents get pricing right, to know your market, you need to define your farming area, know every nome in it, and track sales, and listings, see price reductions and expired, and days on market for each, there is no easy way.

Hey @Jenna Hintz we should talk sometime, Im relocating to Kewaskum, if anything just to talk shop, I ran a Brokerage in FDL for fron 2008- 2014 and have no flipped 21 homes, and currently have 16 SFR rentals in the northwoods. welcome to BP

I test my properties with a code3 radon monitor, and if its high i put in a system, are you required to? well maybe, but I would need to see the result, and would test it, or have it tested myself, as for vacating for 48 hours, its generally not needed, but people opening windows and doors can lower the reading, the safe level is below 4 Picocuries/liter.  if you are handy, the install should cost you about $200-300 in material, for a standard system, but for the next one i do im gona try Tjernlund RX2 system, they are $229 and install in a box sil, its not a "approved" system, however their is no "code" on radon in WI just guidelines by the EPA if it accomplishes the result, Im all for it instead of 3" PVC into the floor and out the roof. just my opinion.