All Forum Posts by: Bruce Runn

I only invest in cash flowing properties.  You only have to know people that bought in 2004-2007 to understand what happens when property values tank and you can't make the payments.  There was an adage years ago that real estate never goes down until it does.  No one has a crystal ball and there's a lot of risk in buying something that loses money in its operations.  It really comes down to risk tolerance.  

@Marcus Auerbach

I’d echo Marcus and let your agent know about the misrepresentation with looking for a solution

I had something similar.  I bought it using a commercial loan.  The interest rate is higher than a residential loan, is based on 25 year amortization, and have a balloon at 5, 7, or 10 years.  For my long term holds, I prefer a 30 yr mortgage with lower rates as I want to lock in long term on that.  I always assume interest rates will be higher in the future since we are at historic lows.   I bought the property, did a lot split to separate the duplexes and refinanced and saved a lot of $ long term with no downside in rising interest rates when the loan comes back up for it's reset.

I blame the realtor for this especially as you are new to this.  I often see realtors who don't have any experience in multi family properties acting as a listing or sellers agent.  They know how to do the paperwork and and marketing/salesmanship and that's about it.  My best purchases have been where the realtor didn't know what they were doing and totally under sold a property w/o knowing what they were doing.  I even had a listing agent call my bank to try to understand how I could get a loan on something she didn't understand and priced over $100,000 under assessed value as she thought only a cash offer could be used.    About all you can do now is offer cash for keys and try to buy the tenants out of the leases.  They probably know they have a great deal and why the lease is so long but you have to try to do something to get to a long term positive situation

I only invest in cash flowing properties.  You only have to know people that bought in 2004-2007 to understand what happens when property values tank and you can't make the payments.  There was an adage years ago that real estate never goes down until it does.  No one has a crystal ball and there's a lot of risk in buying something that loses money in its operations.  It really comes down to risk tolerance.  

I echo these sentiments that good contractors are in high demand, the same as very good subs.  I have a friend that builds 6 story apartment buildings that recently commented that before he branched out on his own, he did a single family project and it was as tough as his current 75 unit multi family projects.  The problem is when you are a 1st timer or doing a 1 off project, no one knows you and you can't get the most reliable people.  I've done dozens and dozens of projects and have the same crew and the same subs for many years and everyone knows they have job security/more work lined up.  All the Hvac, plumbing, electrical, sheetrock ect are companies that do very well for themselves and they know my projects will be available on time, w/o hardly any changes, and they will get paid when their permit is signed off.  

@Marcus Johnson-the garage is considered part of the total allowable 1300 sq ft in MPLS.  It is considered part of the accessory structure.

@Marcus Johnson

I only work on my own projects so I wouldn't be a good person to look at your plans because I don't include profit in my personal builds/renovations and don't have overhead/marketing costs that a general contractor/builder needs to include. I just know what it cost me to build/renovate. You are using $125/sq ft for construction. Building a SFH, which is really what an ADU is, should be $200-$250/sq ft. This is why I advise talking to your neighbors GC/builder to get a rough idea before spending more time looking for financing. I hope this helps.

I own 2-4 unit rentals and am a general contractor who done renovations on dozens of existing rentals I've bought and have done ground up triplex builds.  Not trying to be a downer but I'm finding your number of $160K a very, very low build  estimate.  I will follow if you are willing to post what your bid comes in at.  I'd wait on getting final details on financing until you get that bid as you will most likely be surprised.  

Wondering what thoughts people have on the very different rent stabilization initiatives on the ballot in Minneapolis and St. Paul?