All Forum Posts by: Daniel Kurkowski

Hi Robert welcome and congratulations on making the commitment to your future.

If you ever want to chat strategy, hit me up.  I'm in the area as well and can potentially help you understand the market a bit better.

Let me give you a commercial agent's perspective of what we deal with so you can put together the most helpful approach to get them on your side.  

When I meet a new client, the vast majority of them aren't quite sure what they need or are looking for.  When I already have a client who knows and trusts me, I know they can act quickly on a deal and will treat me fairly during the transaction.  With a new investor I don't have the same certainty.  If you can convince them of your decisiveness you will be at a huge advantage.  This works to your benefit as well.

A majority of people I speak to want to get a non-exclusive agreement with me and it is very much a matter of if you can't commit to me, why would I commit to you?  Commercial agents get cut out of deals waaaaay more than residential agents, so we need to know you're  not looking to be cheap, that you value our services and can commit to paying us.

I'm not saying you haven't done all of this, but again you will be amazed at how many people want to use us to pay nothing to get everything.  

Klasic Property Services by a mile.  The owner is a great guy who is an investor and developer himself who is great to work with if you have your ducks in a row.  He does all of my rehabs and I know a have a lot of different people to draw from.  Just the best.

My understanding (not an attorney or expert) of the code in St. Paul is that it requires retrofitting only after a certain amount of improvement is done to the building or if there is a change of use etc.  Otherwise you are grandfathered in.

Good post Austin.  I haven't yet seen anything that talks about the improvement requirements to qualify as you alluded to, but this is a game changer.

Hi Mike I have a decent amount of access to properties in MN that others don't and have failed to find something that made sense to do this with for over a year.  I did end up finding something to cashflow in a good area, but when I did, I was able to sell it for a $140k profit instead based on what our market is willing to pay.  

If you consider that is what is generally required for a deal to pencil out, I think it helps put it into perspective.

I have done it several times as well. Shouldn't be a problem if you are going FHA, but conventional is another matter in my experience.

Have you done a cashflow analysis?  Just from the numbers here it appears that it wouldn't work too well when you factor in vacancy, repairs and minimal capex.  Townhomes usually have a much more capped appreciation that single families due to the association fees affecting a buyer's ability to make the monthly payment.

Could you make it break even?  Probably, but why invest your capital into something that becomes illiquid the second the market turns.  This was a common strategy in 2006 which I wouldn't recommend continuing.

@Andrei Bortnov should be able to help.

What I do with my agents is offer them the option to be an equal cash partner in a deal that they source, but they provide additional value by doing all of the work I don't want to do on the property, or allow them to source a deal and roll their commission into the ownership piece. For example on a building I need to put 20% down on, their 3% commission gets them 15% equity in the deal. Structurally, just set up an LLC together with the proper member control and operating agreements and its pretty easy.

It sounds like the second option would work well for you because it appears you don't have additional cash to put into play right now, but may have the time and ability to build relationships to provide deals.

This will benefit you more than just the transaction because you can essentially move in the marketplace as if you had the same funds available to you that your broker does, which makes you more substantive to deal with to outsiders and help you grow your brand and reputation.