All Forum Posts by: Chase Stocki

Welcome to bigger pockets and welcome to Minot! I'm in the USAF too and am in a similar boat with housing. There is a small group of young investors in the area, but we've been distancing ourselves. You can find us on Facebook- Minot Real Estate Investors. We've had to get creative here in Minot to make some money due to the housing situation and crazy prices in the area. We'd love to talk with you about your goals and strategies! 

Again, welcome!

Chase

@Christopher Stafford, 

A perspective from a local:

I like the way the property looks, and it seems to have been refurbished well after the flood in 2011, but please know that it was definitely under 6-10+ ft of water during that time. (https://www.google.com/search?q=minot+flood&sxsrf=ALeKk00Ftlm9yGurzuw9NxSsBU-IOV0PEA:1584298377758&source=lnms&tbm=isch&sa=X&ved=2ahUKEwj32piwk53oAhVOCc0KHU9MCKUQ_AUoAXoECBAQAw#imgrc=jU0Y4_tUg8fsPM) Hence why all living quarters are on the second floor and the drywall in the garage looks new. Make sure to get a REALLY good inspection. I would not say that it is in northwest (think west/northwest of the Airport) or southwest (East of the golf course/west of walmart), I would consider it central Minot (I own a home in central Minot too). Right behind the home you are considering is an active railroad track, so that is something else to consider. 

I'm going to be real with you, home values in Minot are not appreciating, they are dropping. The numbers don't really work unless you plan on living in the property (which I assume you are). Investing here is a 30+ year strategy of cash flow, forced appreciation through flipping (short term - investors have been getting out of that game here for the most part), and long term equity. Buying now and selling in 4 years, you will probably have to take a loss on the duplex if that is your strategy. I'm not saying it wont go up in value, but I would not rely on that strategy. Houses in this town are not selling to investors because the renters are not paying what is needed to cover the rent in SFH. Your numbers with the duplex might work. We do have several good things in Minot going for us: The air base has 2 wings, the railroad (major hub), the oil industry - Hess (dont expect another boom anytime soon, the Minot Govt is working hard to prevent that from happening), and we have the largest hospital in the surrounding area besides Bismark. I've just been watching a LOT of houses sit on the market for 6+ months because sellers dont want to be upside down when they sell. It is an issue for a lot of people here.

If you're local already, we can meet up and I can introduce you to an agent I trust. Otherwise, I'm not opposed to going to look at the property with my agent here in town for you or at least drive by. If it really is a good deal, it wont last long. You will have to make a decision pretty quick if your numbers work. 

Edit: Ultimately, since my strategy with my wife is buy and hold, if I were you I would seriously consider buying it.

Best of luck!

We sold it last year and bought a new house in Minot, ND. 

It was a 5 bedroom home. The Fort Collins rules state that only yourself and 2 unrelated people could live in a SFH together, or your family plus 1 unrelated person. Essentially it was too big for a rental in the area do to the city's 'Hostel' rules. It also made my wife uneasy at the time to rent. She has come around now and is all for renting (she has seen the light), but not at that time. It wasn't worth the conflict in the household.

Investment Info:

Single-family residence buy & hold investment in Fort Collins.

Purchase price: $310,000
Cash invested: $2,500
Sale price: $395,000

First property. House Hacked with friends.

What made you interested in investing in this type of deal?

Wanted to move out of a small town into a big city. I could afford the mortgage with my military BAH.

How did you find this deal and how did you negotiate it?

In the hot Colorado market, it sat on the MLS for several months due to renters in the home. 2 weeks notice has to be given to renters. I offered full MLS price for them to pay closing.

How did you finance this deal?

VA Loan. 0% money down.

How did you add value to the deal?

Appreciation and aesthetics. My wife made the rental house look like a real home before we sold it.

What was the outcome?

Sold for a profit to pay for my wedding, our jewelry, and some debt we had. Had around $6k left over.

Lessons learned? Challenges?

Cash out refinance is EXPENSIVE. I lost $20k in refinancing costs. Will never do that again.
Always pay for a good agent. They are worth their weight in gold.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Eric Kronwall out of Fort Collins Colorado - Agent.

I'm living in Minot, ND.  There are a few of us with our ears to the ground looking for deals around here, so if you need a hand with anything, let us know. We chat pretty regularly, and the numbers usually work, but lack of cash is usually the thing that is holding most of us back due to the work a lot of homes need. As mentioned before, we are happy to help or scout the area if you want an insider perspective.

@Joey Hernandez
Sorry for the extremely late response. I have not tried this strategy, and as posted above, it probably will not work. I went with a conventional VA loan. (4.1% for a 30 year mortgage zero money down). My wife and I found the house we wanted (Large home built in 1900 with a potential rental suite above the garage for some house hacking). The home was "move-in ready" enough for the VA. Our realtor's husband is a local contractor and we were able to jump to the top of his construction project list and received a bit of a discount. We were able to work this due to the fact we bought the house using his wife (realtor). The renovation (reworking of a master suite by enlarging the master bedroom and installing a luxury bathroom) should be finished in a month and I'm projecting it will increase the value of the home by about $50k. We will be keeping the home as a long term rental as we project ourselves to be moving back to this area once I retire from the military to continue to raise our kids through High School.

Best of luck in your endeavors!

Backstory:

I'm in the military and have access to the VA loan with allows 0% down on a SFH up to $400k, a duplex up to $600k, and a quad up to $800k. The catch is the property must be move in ready and the VA sends inspectors to the property to ensure that it is. I have not found a clause that allows me to buy a property that is not move in ready and fix it up myself.

The Problem:

Houses in my area are extremely overpriced. There was a rise in the market during an oil boom, a massive flood, and people bought homes due to the lack of available rentals. The market has corrected itself, but the property owners have held tight to the prices so they don't lose money on their homes when selling. Therefore, in order to buy, I'm either going to over pay for a move in ready home, or purchase a fixer-upper. 

The Proposed Financial Solution Oversimplified:

I purchase a fixer-upper 'duplex' with a hard money loan (I'll do my homework and work the points, interest, and rehab into the loan), rehab the 'duplex' to my liking, move into one of the units (house hack) and rent the other unit, then use my VA loan to "refinance" the property with 0% down and low monthly payments (probably around 5% with my credit score hovering around the 800 mark).

Without getting into the VA loan weeds, is my proposed solution even legal? Does anyone know of anyone who has done this sort of financing for a home/multi-family?

All advice is greately appreciated.

Respectfully,

Chase

Brandon, I've been watching the area for the past year or so and have been watching prices slowly go down. The reason why I haven't bought anything is because back during the oil boom, people bought high and are now selling at those high prices. Oil has started to come back to Williston, ND and is projected to come to Minot too. However, all the locals still believe we are sitting on top of a bubble. I'd be willing to help out any way I can.

Kathryn, I'm hoping the prices go up for you, but I'm just reporting what I've seen. I haven't taken the leap of ownership in the Minot area, so I'm talking from an outsider's perspective here, but I'm looking to purchase soon now that I've made a couple of bucks from my Colorado home sale. If you'd like to meet up, I'd be willing to do so. 

If either of you would like to discuss further, just PM me. I'll even send you my phone number.

Welcome to the Bigger Pockets community. I am also in the Air Force, currently living in Minot, and looking to invest in a similar size property while I'm stationed here in Minot. I've made a lot of connections in the area (unfortunately not in REI but lots of private businesses), and am receiving good information about where to buy and the risks of other areas. I'd love to get together with you sometime and discuss ideas, even if we don't do business together. I will definitely help you out the best I can. Let me know how I can help!

Thank you very much for your response.  I played around with a few more properties and got better numbers when I did not use the 0% down. I think I'm understanding how it is all working now.  Much appreciated!