Issues and considerations for Duplexes in NE MPLS?

[Jem Thompson]

Greetings MPLS BP community! I recently moved to the Twin Cities and I am currently looking into Duplexes in NE Minneapolis for some version of a rehab+house hack. I've been diving into the due-diligence on the NE housing/rental market and I am starting to get a lay of the land, but I would love to hear from anyone with more experienced in this particular area on any major 'gotchas' to be on the lookout for as I'm dialing in my search. 

Things like common issues with the older housing stock in the area, what inspections are absolutely necessary, and experience renting in the area would all be greatly appreciated! Replies here are great, but if you're interested I'd love to buy any experienced investors a beer/coffee and chat. 

Thanks in advance!

[Jeff Schemmel]

Hey Jem, always down for beer or coffee, just hit me up.

I'll give a few things here from experience that I routinely look for when first observing a property.  There are realtors/investors here more seasoned than me who could probably give some others from experience, but here's a stab at your question. 

1.) land grading around the house.  A big portion of the multi-families in the city are older 1900ish time-frame turn-of-the-century builds.  they're commonly built on limestone foundations and limestone is really porous.  As a result, any negative grading will let water flow towards the house into the foundation which means degradation of the foundation and water in the basement.  humidity is also a thing, it's common to see dehumidifiers in a lot of these older basements to keep the crumbling and dampness to a minimum.

2.) read up on 4D and Section 8, so you're aware of what's involved when properties are participating in those programs.

3.) st. paul calls their rental license a COO - certificate of occupancy; maintained by the fire dept. Minneapolis has rental licenses, but there's a grading system for each, and that can often give some insight into the level of care taken by a current owner.
4.) read the TISH report, which is required for anything under a 3-unit.  that will tell you what the city found hazardous, or below minimum with the property when they inspected it as it was listed for sale.

Regarding inspections, I always recommend a general inspector as well as a sewer scope; especially for the older properties.  lots of the older homes used clay piping and it's just laid in underground with gaps between the pipes in a lot of cases and that allows tree-roots to grow between the pipes.  no bueno.  if it's really bad, you'll have to have the pipes rooted every couple of years to keep them from clogging and causing a backup.  best-case, the sewer has been updated to ABS and tree roots are not a concern.  It's rare to hear anything about the sewer until you inspect it yourself - costs ~175 bucks to do a scope and it could save you a $15,000 headache.  Beyond that, I usually let the general inspector call out any red flags and if he/she recommends an HVAC inspection, we can make some recommendations; those are usually ~200-250.

lastly, you'll see a lot of boiler heating.  don't be freaked-out by this if you haven't rented with boilers.  they can be more efficient than modern high-efficiency furnaces in some cases but they take a bit of maintenance and the radiators can be cumbersome in the rooms.