Getting "Professional" about Real Estate - Minnesota

[Sevy Bialke]

Hi all,

My name is Sevy Bialke and I'm new to treating real restate professionally. I'm still in the learning and educating phase, but my loose goals are to be a BRRRR investor in the suburbs of the Twin Cities, MN. I'd be silly not to follow the consistent advice I've heard of working on relationship building early on, but my primary goals for the next 2-4 months are just absorbing and learning. I currently have one rental property in MN and am living in a long-term flip in the Milwaukee area.

I likely would've been well served to read a few other new member intros to gauge just how much info folks include, but I've already waffled on creating this intro and I don't want to fall prey analysis paralysis. I think this post will end up significantly longer than most will read, and that's okay, but it'll be the first time I've written down my intentions which help me build my eventual goal plan.

The Start of the Journey:

I'm born and raised in MN and intend to live long term and retire there. I purchased my first primary in South St. Paul right out of college because it seemed to me I was better served to purchase quickly vs save up living with my parents as interest rates were on the rise. I lived in that home for 4 years doing various improvements (landscaping, remodeled porch, finished garage). Somewhat out of the blue my employer offered me a lucrative position in Milwaukee on a 2-year (ish) contract. I decided to refi the house for the down payment on my new primary in Wisconsin and rent the property out. I used a well-known national management company for tenant placement and management for 6 months before I dropped them for terrible service to both my tenant and I; and began managing the property myself.

Getting my Feet Wet (Trial by Fire):

My first tenants were respectable and always paid on time. They broke their 2-year lease early but were very amicable throughout and gave me no grief when I withheld about half of their deposit. At the time my wife was 5 weeks away from her due date with our second child. We had previously agreed on a no-travel ban for me the 4 weeks prior to the date, which meant 6 days after learning of the lease end, I'd be spending the weekend in MN, with a new tenant selected. I slept maybe 3-4 hours a night that week as every night after work I had to fully learn how to do the next step - how to post and find tenants (then make the posting), how to screen tenants (then make the documents and google form), how to write a lease (then write the lease), etc. By Friday I had 70+ people interested in renting, 20+ that passed my relatively strict requirements, and 14 showings scheduled for Saturday/Sunday. I drove to MN Thursday night, spent all day Friday repairing and working with the professional cleaners, and all-day Saturday/Sunday showing and performing more touch-ups around the house. Sunday night I drove back to Milwaukee with 4 great candidates lined up. Of the 4 candidates, 3 offered higher rent or longer leases, but I knew they would be short term. After going through the whirlwind of the week and about to have 2 kids under 2, I wanted stability. I went with my gut on the 1 candidate that didn't offer higher rent as I thought she would be the most stable (her history supported 5-10+ years in one unit). We had a lease signed by week's end and I thanked all other candidates. The only thing that got me through the week was discovering RentPrep. The info I learned there as well as their all-in-one screening package saved my rear-end to help me through starting out.

Is being a Landlord and a BRRRR Investor a stress I can live with?

I'm so far batting 2 for 2 for respectful and paying tenants but I'm not naive enough to think that'll last forever. I joined RentPrep's Facebook group and for the next 2 months I read and absorbed every negative story and "okay I need to vent" post I could grab. I figured if I see and hear the worst and that doesn't scare me away (or I recognize maybe how the opportunities for those situations could be mitigated with more time/effort up front), then I was willing to explore this more. In addition to being comfortable land lording, I enjoy the fix-em-up’s around the house and actually converted my current Milwaukee home from a 3-1 to a 4-2 and added 700sqft with a finished basement. I did the work myself, minus rough-in plumbing, fully permitted in my “spare” time from a full-time job as an operations manager, a pregnant wife, a 1 year old, and 2 60lb dogs in about 5 months. This completed long-term flip will give me the capital to not have to start in the hole with my next project.

My Loose Intentions (in Lieu of my yet-defined Goals):

My 2-year contract with my employer is ending in the Spring. I intend to purchase a new primary residence as a “long-term” flip. If I could, I would house-hack every 6 months into a new primary (sfh or small mf) and reap the benefits of conventional rates on primary residences and move on to the next. However, this is hard on a growing family, so we’ll see just how far the wife will let it fly (frequent jumps on sfh or even infrequent jumps on a mf may be too much for her to cope with). I intend to purchase properties in distress and, rehab, and rent out. For the first one or two, I’ll do the rehab myself (especially if it’s my primary). I recognize this isn’t sustainable, but I need that level of control to start – I’ll accept the lower profits for my perceived lower risk with contractors.

My Next Steps:

Absorb and learn. I’m burning through every podcast BP has at a rate of about 25 per week and reading about a book per week. Since I’m stuck paralyzed with my work contract, I might as well analyze in the meantime! (analysis during paralysis?)

I'm very excited about BP and am looking forward to being a part of the community!

For any that actually stuck it out for the detailed version of my intro, my hat's off to you and your patience for reading the whole thing.

Thanks,

Sevy