All Forum Posts by: Bilal A.

@Scott Meyers Thanks for the advice, much appreciated.

@Terry Campbell I will get in touch with you soon. Thank you!

Hello All,

I'm starting to look at self storage facilities and need some basic questions addressed that pertain to the MN market:

1. Are there Local/community MN banks that lend for self storage purchases? What are the typical LTVs, loans types, interest rates, amortization people are seeing? 

2. What are the typical CAP rates for secondary and tertiary markets around MSP? Lets say for 20-40k sq ft size self storage facilities?

3. Any recommendations on lawyers that have experience with and have helped purchase self storage facilities? 

Thanks in advance!     
Bilal

@Michael Wagner @Christopher Smith

I am not able to put things as eloquently as @Andrew Reyes and @Ashish Acharya and neither am I a CPA or qualified to give tax advice.

My situation is a bit different than a full time investor. A high income W2 employee has very few choices to mitigate high income tax rates. In states like MN, ordinary income tax rates reach about 50% when counting federal income tax, state income tax, and AMT. Quitting your day job is not realistic in most cases but having your spouse qualify as a real estate professional is a very powerful tool, which can potentially allow you to use real estate related “losses” and depreciation to offset your AGI.

This is not say that one would buy real estate purely for the tax benefit. But buying a recession resistant real asset for the RIGHT price gives you passive income and lowers your overall income tax bracket while building equity and potential future appreciation over time. Creating enough equity and passive income can allow one to break the proverbial “golden handcuffs” of a high paying job in a matter of years or at least that is goal.

@Ashish Acharya Thank you!

Can a self storage facility owner/operator qualify as a real estate professional if it is their full time occupation, and meet the 750 hour material participation and greater than 500 hour rental real estate activity safe harbor rulse? Has anyone been able to achieve this? 

Also, can self storage facility renting/managing activity hours count towards the real estate professional requirements if one also owns and self manages multifamily or single family homes or is a real estate agent helping people buy and sell homes? 

Thanks in advance for your input!

Bilal

Totally Renovated Offmarket Duplex in Mound, MN, few steps away from the lake with lake views. Mound is an affluent suburb 25 minutes away from the city of Minneapolis. $1+ mil homes right next door on the lake. Close to kids park, beach, and boat launch. 9 and 10 rated schools. Located on a peninsula with no through traffic and very safe/quiet setting with SFRs. 

The smaller unit is currently occupied and leased till May 2019 and the larger unit will be empty by Nov 7th, 2018. 

PLEASE DO NOT DISTURB THE TENANTS. 

The property was completely renovated on the inside in the beginning of 2018 with additional changes by the current owner in the last 6 months. Here are the highlights:

New Appliances in each unit (refrigerator, electric stove, microwave, washer/dryer, dishwasher)

New Carpet, Paint, Granite Counter tops, Tile & Marble in kitchen and bathrooms

New PEX and copper piping, faucets, bathroom vanities

New Boiler and individual water heaters

New window screens and Wall AC units

Gas Fireplaces installed in each unit

1 car garage parking and 1 car reserved parking space for each unit

ALL UTILITIES ARE PAID BY THE TENANTS OR BILLED TO THEM. The only expense paid by the owner is $60 per month on average for biweekly lawn mowing and snow removal as needed. The rent for the smaller unit could easily be raised to $1050 per month and for the larger unit to $1300 per month.

2018 property tax: $2783.34

Showings are BY APPOINTMENT ONLY. PLEASE DO NOT DISTURB THE TENANTS. Only the larger unit will be available for viewing. The smaller unit can be viewed/inspected during the option period. Just message me directly with questions or showing appointments. Seller is a realtor and will not be paying a buyer's agent commission. Images can be viewed at the link below:

1585 Gull Ln Pictures

Hello BP members, I am looking for recommendations on a real estate lawyer who has experience with NNN leases and 1031 exchanges. I am located in Minneapolis and I want them to look over lease documents for NNN property to make sure all my bases are covered before proceeding forward. Thank you so much. Bilal

@Dave Toelkes Thanks!

@Ashish Acharya Thank you for your input! I will take all these into account.