All Forum Posts by: Scott Schultz

http://www.wisbar.org/NewsPublications/WisconsinLa...

I did not have rentals then, but will say I think the key is not to be over leveraged, 80% is way too much in my opinion, im comfortable below 60% LTV, this allows for a fairly significant retraction, and I should be able to push my rents lower if needed to keep units filled, hopefully longer than the other guy, and I can buy his at the court house for pennies on the dollar.

as a flipper and broker in WI (marketing my 20th flip) the best deals rarely come from MLS in Hot and heating up markets, cuz every Tom Dick and Harry comes out of the woodwork with no idea where else to look, they say, "hey we should flip a house, like on TV" so the easy ones get driven up in price, and your margins driven down. that being said, I have flipped listed properties, (6 i think) and have made ok margins, but the ones that were fantastic were acquired through other means. I stay a member of the MLS just for data, access, and a few other perks. I dont even list my own anymore. It all depends on your market, but if that one property is not selling, and seems too cheap, ask the question why, maybe even ask the neighbors why, just be smart, and know your numbers.

@Melissa Yatzeck you stated near a lake, not on a lake right? and "cabin" so its a 3 seasons structure? you are gona have to do your homework on it, first off does the person that called own the property? is caller who they say they are? What is it worth? (ARV) if its in a swamp near Pembine or Hakins or something it may not be worth a gallon of gas and a match. if its "up Nort" Im here and will help you if i can with out stepping on your toes, let me know if i can do anything to help

@Peter B. Great input, i have been trying for years to pencil the numbers on a multi's to make money even close to my singles, i think one of my hold backs is my own risk tolerance/debt adversity, and I will not do partners, so its me and my wife. i currently am running 23% debt on $1.1MM portfolio, and have set an internal cap of 40% I know this goes against most common belief, but its what i am comfortable with. I dont have a desire to to make a million per year, Im happy with $100K and almost no debt, when you dont owe, you have no worries. I tend to be overly conservative, but I saw lots of investors collapse during the last crash (I was a REO Listing Broker in a small town), and never want to be in that situation, it will happen again, its just a matter of when.

Great to see what everyone is doing out there!!!

BTW I was able to get LED Light bulbs (we put them in all of our units) at Menards, 4 packs for $1.99 they have been great so far, that upgrade is super cheap. 

those tenant will be trouble, they are the type that will whine about every little thing, if you have a tough time, offer to break their lease, and they can find a nicer place, its just not worth the headaches, I can guarantee if this is an issue today, wait till they are short on rent and call the city inspector, and piss and moan to them about something thats not a problem. you are better off cutting ties.  

@Joshua Martin I currently have 14 SFR's and did 4 flips in 2016 and 1 this year already, (20 since 2008) I have been analyzing multis in WI since i got my RE license in 2006 and just cant get an adequate return. now to be fair I run my numbers assuming 100% financing even though thats not actually happening, but my cash is worth something. and I bump the interest .5-1 point for security reasons, I also calculate taxes based on purchase price or assessment what ever is higher, and round up all the stated expenses. I dont figure income tax advantage, I see that as a bonus, since it can change overnight with the stroke of a politicians pen. most make little to no money.

For example i just saw a deal close in town here for $610K using only the sellers numbers its $2,500 positive per YEAR, no i did not mistype this, i ran it by my banker (very bright commercial guy) and he knew the property well, he said to stay away, it doesnt make any money. this is pretty typical of what I have seen over the past 11 years. 

I think I will stick with my Single families where i can get $200-300/mo positive on 15 year financing, and be quite liquid if i need to sell one here or there, with good management in place it really doesnt matter if they are all under 1 roof or you own a bunch of roofs, it just runs with little intervention. 

@Josh Shaw if you need to  conventionally finance, you are stuck with running on market deals primarily, there are deal out there if you can take on projects that most cant or wont, I have seen a few 100% vacant properties in other states going cheap.  

Personally I cant make most multi's come out right now, and the "big players" in Multi's are sitting on the sidelines and even selling right now, as institutional investors are coming in for 1% or even 0% returns expecting appreciation. 

I am buying Single family and doing well with it in small rural markets that have few investors, but deals are drying up, im considering a slow down in acquisition and sitting on the sidelines and stacking cash till we have a correction, I believe that correction is coming sooner than later, but im just a guy that doesnt know much.

@Josh Shaw what are you getting for interest rate quotes? the rates have jumped, and are probably going up again real soon, a lot will depend on March 15th debt ceiling action in congress

are the units electric heat? also what are the buildings assessed at? the Tax amount seems quite low for a property of that value, if the assessment is lower, remember at a higher sale price it will be re assessed, and the taxes will go up. I looked it up, Nice buildings, but I think the assessment may be closer to a accurate value, still more than i would pay, he is over priced by about $160K in my opinion.