Why Do You Invest in Minneapolis? (Testimonial for BP!)

Question

BiggerPockets! I work at BP and I'm working on building a landing page for Minneapolis. Would anyone be willing to share why you choose to invest in the city? Why is it a great city for investors?

Amber Gonion · Answer

Minneapolis area is diverse economic area.  The average vacancy rate for the 16 county metro area according the St. Paul Pioneer press is  is about 0.4% (as of April 2019 2nd only to Akron OH).  The variety of industries keep the area less prone to economic downturns.  We have a diverse businesses community employing tenants with companies like Medtronic, Boston scientific, 3M, General Mills, Best buy, Target, Amazon, Us Bank, Ecolab, Mayo Clinic, and Cargill.  There are still plenty of properties available at reasonable prices.  Light rail construction is offering opportunities in various areas around the metro.

Max Tedford · Answer

This is a bit facetious, but I like to consider the Twin Cities an ultra-long-term investment in that it's a healthy, active population with a terrific quality of life that will be a very attractive relocation target to potential climate change refugees relocating from the coasts and the south in 50-100 years.

Noah Chappell · Answer

@Lauren Hogan so happy to know we'll have a landing page! I love this market because as has been mentioned here the fundamentals are strong, by which I mean there's a diverse economy characterized by durable industries including tech, healthcare, manufacturing, distribution, etc, there's population growth with young professionals moving into the city, the cities are walkable and well planned, there aren't natural disasters such as hurricanes, fires, earthquakes, etc, to worry about, and the quality of life is generally high. The vacancy rate is one of the lowest nationally, leading to a #1 spot on 2019 Marcus & Millichap multifamily north American investment forecast. People argue that the liberal laws are slanted against landlords, but I find that heavy support of tenant rights also leads to government programs supporting affordable housing, which I've benefited from. Is summary, I feel that the Minneapolis - St Paul market is a great balance between cash flow and appreciation, and the long term outlook is promising.

Todd Dexheimer · Answer

I think you meant 4%. Minneapolis was at 4% vacancy rate, now it is 6%.

Bill B. · Answer

So I can write off trips to visit family and buy a retirement home on lake Minnetonka while I can still afford it.

Although It does have relatively high property taxes and income tax.

Tim Johnson · Answer

I have seen that .4% vacancy rate @Amber Gonion cited.  If you google "Census data show Twin Cities home vacancy is second-lowest in nation" you'll find the article.  That was from 2019 and was the 16 county metro area.

Star Trib recently had an article in Nov 2020 stating vacancy rates in the Twin Cities were 3.6%, and downtown Minneapolis has vacancy rates at 11.1%.  These are closer to @Todd Dexheimer's numbers.

So it depends on the area you are measuring (16 county metro, Twin Cities + suburbs, or downtown Minneapolis). The Star Trib numbers seem a little closer to reality.

Account Closed · Answer

Not to hard to achieve the 1% rule.

@Lauren Hogan

Robert D Wade III · Answer

@Lauren Hogan I came from a small town. (less than 1000 people small) in January I quit my job to travel I drove for doordash and slept in my car until late July. In that time I traveled to some of the largest cities in the Midwest. It’s given me an experience that has built me up and shown me the different kind of markets out there. I haven’t made my first deal yet but of the cities I’ve been to I really enjoy the twin cities area. As a doordash driver I got to really explore the areas I was in and the people. The thing that really struck me is compared to many of the cities I’ve been to the quality of life seems higher. Which in turn boosts the housing market. Most people I talk to that aren’t in the game think I’m crazy for seeing that as a plus but I see it as an opportunity. I am currently working on my RE license and I tell them, how can I be crazy commission on a $400,000 house is a lot better than on a the average $100,000 house in my current small town. Commission that I can roll into my first deal and many after that. I hope this helps. Have a wonderful day working for the company that has inspired my future!

-Robert D. Wade III

David Barnett · Answer

As Amber mentioned, I like the fact that there are a lot of blue chip companies that are in the Twin Cities.  In addition to these items, I've noticed over the past few years the Twin Cities metro really making strides for business development.  For example, over the past few years, the metro area has hosted the Super Bowl, the NCAA Final Four tournament, the Frozen Four (NCAA hockey) tournament, the X games and other events.  Overall, the transit system is pretty good, and it's quite affordable with people migrating to the Twin Cities.

Why Do You Invest in Minneapolis? (Testimonial for BP!)

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