Minneapolis HouseHack Tips

[AJ Smith]

Hi all!

My name is AJ Smith and I'm a 3rd year college student studying Accounting at the University of Iowa.

I'll be interning in Minneapolis this summer, and if all goes well I'm planning on using an FHA loan to house hack somewhere in the Minneapolis/St. Paul area when I graduate. I'd like to do a traditional multifamily house hack (duplex, triplex, or fourplex) in a Class B neighborhood of the Twin Cities (within 5-10 miles of downtown Minneapolis so I can bike there), though I would also consider buying a single family home and renting by room.

For those who have experience with the Minneapolis market: what kind of advice or tips would you give me with these criteria? Can you think of some specific neighborhoods I should be looking at/avoiding?

Thank you all for your time, and I look forward to your answers!

AJ Smith

[Evan Kraljic]

Hey AJ! Good on you for already looking this far ahead. 

Since you're still in college I'd say that getting all your finances set and prepared for purchasing a property should be your #1 focus. So all the basics like saving up enough for a low down payment with 3-6 months of emergency savings, building a good credit score (preferably in the 700s), and not taking on more debt than you need, so ideally no car payment especially if you'll have loans to pay off. 

Building a network is very important too, and the two main pieces to that are your real estate agent and mortgage lender. Both of those could wait till summer but if you're proactive you could probably reach out and schedule a quick phone call to discuss your plan. I would recommend Conor Hesch, Tim Swierczek, and Kim Burke for loan officers. Also join the Millenial Investor Focus Group on facebook, lots of great info and references in there that has helped me immensely. 

I'd recommend NE Mpls or South Mpls for B neighborhoods within 5-10 miles of downtown. North Mpls would be more C-D neighborhoods. South mpls has "Uptown" west of 35W which has higher property values but might be tougher to find a deal. On the east side you'll have generally lower prices and better cash flow but might be looking at C neighborhoods, which aren't all bad but just make sure you have an experienced agent (and hopefully investor) who knows the areas well.

Good luck man!