Some beginner questions for St. Paul MN area

[Bobby Esposito]

Hello!

I have been playing around with the idea of owning real-estate for quite some time now. I have a unique job where I officiate high level of junior hockey and live in housing supplied by the league. This is where I saw the opportunity. The league has a lease ending in St.Paul this year and is looking to get out. I have spoke to the commissioner and he loves the idea of me purchasing a place and leasing it to the league, had mentioned he would entertain a 2-3 year lease. They currently pay $1785 per month so I plan to charge around that much. I am looking at places in the range of 125k-150k and would love some recommendations for areas to look at. I also have a few questions that I have been thinking of. (looking for a 3 bedroom).

- When should I obtain an LLC, now? If so can I get it from a state other than MN or would it be smarter to just get one for MN?

- What can I expect to pay for insurance per year on the house?

-  I plan to have tenants take care of all utilities, is that hard to set up?

- If I wanted to purchase the house in June, giving me 2 months to get it ready for the season (sep 1) when should I start sending offers?

I would love any and all feedback!

[Tim Swierczek]

@Bobby Esposito Yes there are. I'll just use Minneapolis as an example because most of my properties are in Minneapolis.   It's possible that other cities could be different.

If an LLC owns the property, then:

It cannot pull its own permit (a person can) - this also means that many jobs that do not require a specialist must be done by a contractor.  This single prevision alone cost me more than $5,000 on a roof job.

In Hennepin and Ramsey county LLC's cannot represent themselves in court. Add $500 to evictions and collections

Once I cracked 8 owned properties my insurance company would not insure more properties.  At the new companies I was not able to have an "Insurance score" with an LLC, I have one at company 1 because my personal residence is in my name and the LLC was allowed to piggyback off of that.  The lack of insurance score increased my rates.  Unsure of the exact amount but its $400+/year over what I hear others pay.  I have shopped multiple companies and found this to be true.

Loan terms are worse, and costs can be higher.  This bothers me the least as a loan officer I see other benefits in the loan flexibilities offered by these loans and so I feel there is value in this area even with the extra costs.

There are other less significant costs that I find for an LLC. I have it and don't plan on going back, I'm just letting you know what I have experienced.