Understanding Current Market & Expected Returns (MSP)

[Steven Pesavento]

Hi BP,

I'm working on analysis for a few different markets that our on my list, as I'm looking to move to settle in a new area.

My two questions are:

- What type of CapRate, CoC, and other key performance numbers should I expect or look for in the Minneapolis // St. Paul Metro area? If they are dramatically different by neighborhood, where are the best places to find this type of info?

- What areas in the Twin Cities are over saturated, or look like they are primed to grow?

Thanks in advance!

Background: I used to live in Uptown for a few years, and have my eyes on a few neighborhoods. I'm interested in Multifamily and Small Apartment buildings. Preferably with value add opportunities. 

[Sam Steadman]

Hi @Steven Pesavento,

The market in MPLS right now is a crazy one. Many homes are selling quickly and for an amount that is over the asking price. As of right now, it is hard for investors to find properties that make financial sense because of the large competition in the marketplace. Areas like Golden Valley, Saint Louis Park, Northeast, Richfield, Uptown, etc. are great areas to purchase run down homes and then fix up with a great return on investment. Those areas are also places that attract renters and usually attract great tenants. Yet, in this marketplace, there is very little inventory that holds those type of qualities and the ones that did have been purchased by investors. 

With that said, if you are looking for a property that will bring you a strong cash flow or appreciation in value you would really have to look and throw multiple offers until maybe getting one to be accepted and close. It could possibly be a longer process and take many offers. Yet, there are still opportunities and I would love to help you find an investment property. Even if that means taking the time to look at many properties and throwing multiple offers. Let me know if you want to connect sometime and I hope this was helpful.

Sam