All Forum Posts by: Rex King

I have a couple bullet points around this subject. First to echo what most people are saying I can tell you the city of MPLS is not going to allow you to add a unit. They do not get anything out of adding a unit. Property value does not go up enough to make them gain tax wise. Which is a complete hypocrisy because all city officials complain about not having enough affordable housing. 

In MPLS you would have to go through a ton of hoops and hurdles to get rezoned for a triplex.

On another note people are saying it is not worth $400 a month to get that project done. It may be unlikely to get it finished for under $40,000 but if you could it is a good investment. Especially in a market like ours where a lot of MLS properties do not make sense.

If you can get that $400  and be in for less than $40,000 to do the project that is better than a 10% return on your cash. Hard to find in any other market. If you were in a great rental area that will always have demand for that I would do that investment. In fact we just did it on a single family home that is zoned multifamily. We are able to add $720 sq ft for $80,000 and we will be able to get $850/mo in rent. Taxes will not go up much, city assessments will not change, heat and electric paid by tenant. We add an additional garbage can, additional water usage but these numbers work. 

I am in the Twin Cities and I invest in St. Paul and MPLS. The market is hot here. If I did not buy with such good value I would cash out, but I really like my portfolio.

Our market and it being hard to find traditiinal sales I have reached out to some wholesalers. They have not sent anything worth value. I have even seen a guy send me a place that was up for auction after he was they high bidder. His sale fell apart and it went back to auction.

Has anyone found a decent wholesaler in the TC area?

I hate the appreciation game. What you are describing sounds like black jack at the casino. I have seen it go the other way on developments and I personally would never make that investment.

Go buy a duplex with an FHA mortgage. Live there, move one and do it again.

I have used HWA for aome clients in MN before

Find more deals

Trevor

One of my best friends and investors is in your office. Keep up the good work.

One of my favorite criterias I use is my livable criteria. It is super sophisticated, okay thats a lie.

If I would live in the building or on the block it is worth more attention. I also use a super quick rule of 1. If rents equal to 1% of purchase price then chances are it is a workable deal. If it is not 1% we usually pass inless location is rock solid.

David

I have read your posts over the last few weeks. I see that you are out actively finding potential buys in and around the Twin Cities. I am an outsider and do not know you from Adam so please take with a grain of salt. I just want to play devils advocate.

What are your goals and where do you want to be? I ask because you were looking at a Brooklyn Park deal and now one in St. Cloud. Me personally try to focus in specific areas and really know that market. I do expand but always in the TC area and in areas I trust.

Are you able to be in the TC and StC area with in proximity to your office or home? I find location to my office/home is one of the more important factors. Espescially with winter traffic.

Before throwing 520k out I would be very, very cautious. I would know wverything about that matket. Thats a lot of money. I also worry about the StC area. Great for student housing , unless the city makes some changes to student housing such as Dumuth did a few years back, but I know there have been a lot of reports about hard times in and around StC.

Rex

Yulia

First off keep up the good work. Just an FYI if you do want to pursue wholesaling please be careful since you are licensed. Anything you do be certain to disclose you are a Realtor or licensed agent.

one thing you need to make certain of you are selling any of your own homes you need to disclose EVERYTHING. 

In MN if a Realtor is selling his own flip there is no such thing as selling "as is". You are at a little higher risk and liability because you are licensed therefore you are the professional and held to a higher standard.