All Forum Posts by: Collin Barker

Thanks for the response, Andrew! Yeah, I often question the 1.5% one. That is a vacation rental that my family and I use for a few weeks out of the year so it is not strictly investment.

Hello,

I am curious what a good ROE would be in the current market conditions for a new acquisition. I just calculated that the ROEs for my 3 rental properties are 6%, 5% and 1.5%. My calculation is based upon cash flow divided by equity. I never imagined I would sell or refinance the 2 best ones because I have 2.65% mortgages on them and they cash flow well, but want to make sure my equity is working up to it's ability for me. 
Appreciate any thoughts or insights! 

Hi Daniel, do you mind sharing where you are finding renters for your furnished units? Airbnb? Is it short stays or full year leases? Thanks! 

I am driving a beat-up 2006 Chevy Aveo hatchback. I really don't enjoy it but since it's a hatchback I can't fit a bunch of stuff in it. I have tried very hard to justify to myself upgrading to a small/midsize pickup or SUV, but the numbers just do not make sense for me even if I rent a car to go on road trips for 2+ weeks out of the year and rent a pickup from Home Depot several times a year. I also have a Kawasaki ZRX motorcycle because it is just too special to me to give up. 

@Jeff Young Even if it does turn out to be ACM (asbestos containing material) I'm guessing that it is in wall cavities or an unfinished attic, both places that tenants don't need to be. Asbestos abatement can be very expensive so I would be surprised if it ended up making sense to go that route. 

Not a show stopper IMO. Sample for asbestos in the vermiculite or hire someone too. Make sure to get a sample from the bottom of wherever the vermiculite is as the asbestos particles (if present) will usually settle to the bottom in vermiculite. 

@Bruce Runn Basement 

@Daniel Anshus, thanks for bringing that up - good to know. Regarding Auxiliary Dwelling Units (ADUs), don't you have to live in the building to rent it legally or am I understanding that wrong? I am currently living in a duplex that has a third illegal unit and I've been planning on renovating it and making it a legal triplex, but if I made it an ADU instead, wouldn't I no longer be able to rent the ADU after I move out (I plan to live there 2-3 years)?

I live and invest in NE Minneapolis, a somewhat desirable area, and haven't seen a 1% rule deal on the MLS, granted I am also a rookie. However, you can still find properties that will cash flow, it just may require some creativity. If I was a contractor or handyman, I would be looking at SFHs that are good candidates for duplex conversions. I have a SFH that I rent by the room and it's a lot more work as a landlord, but if I have 3 of 5 rooms filled I am breaking even month to month and if all 5 are filled I am cash flowing $1000+/month. I think a lot of investors would see this house and see a SFH that costs $300k and would only rent for 2k/month and move on without a 2nd thought.