All Forum Posts by: Dan B.

Keep looking, it usually takes a lot more than 6 to buy a good deal. We only actually tour about 1 of 5 that we find and write an offer on maybe 1/5 of those and we might buy 1/3 we offer on. That works out to buying about 1 of 75 houses that go for sale in our target market. Be picky, it's worth it!

It's not just how much money you make it's how much you keep. If you think a 401k is a good investment consider this - you are effectively saying that tax rates will be less when you retire (ain't gonna happen) or that you will be in a lower tax bracket - meaning you'll be poorer. Who is planning to retire on less income? Not me. If you are putting your 401k/IRA funds in Roth accounts then sure that's good. If not you have an il-liquid investment with potential tax consequences (not benefits).

My first job I received a pension contribution that was converted to a 401k before I left. I rolled it over to an IRA and converted it to a Roth. I was only been able to invest in their funds until I left the company. Now, 15 years later my investments there have recovered from the crash and are up ~30%. However in the last 8 years I've bought rental property, a couple small multis took the same investment as the balance in my IRA. I sold one of them this year received 4x my initial investment plus I received cashflow along the way and paid almost no tax on it because of depreciation. Yes I bought a good deal and I sold at an opportune time but even if the result was half as good I like that a whole lot more than what my 'retirement' funds have done for me. Now I'm 1031 into a couple other properties that will provide more than 3x the cashflow as the one I sold which will be mostly sheltered from income tax by the stepped up depreciation. If I need funds for something I can pull a line of credit or refinance and get equity out (tax free).

30yr conforming loans are now 25% on all small multi-family (2-4unit) for investment purchases. You might find a local bank to do 20%, or possibly get a commercial loan with 20% down (I wouldn't do that though), but unlikely if you don't have a track record. There was a time not too many years ago that you could get these loans for 20% down.

For anyone interested in local meetups in Minnesota

If you look for real estate related groups on meetup.com you will find something like 20 of them in the Minneapolis/Saint Paul area. Most groups have their info and meetings there - although TwinREIA is moving to facebook and discontinuing use of meetup.com

@Daniel O. gave you some great advice. I would absolutely set your goal to buy a building that has X% CoC (or IRR).

Start talking to lenders and get realistic about their requirements - you may need a partner/co-signer of some sort with no experience, and they typically have net worth requirements as well. If you are going to hire a management company, start interviewing them now - they should be a part of your team and even help somewhat with the acquisition.

I'm looking for small apartments too, need to turn a lot of rocks to find a good deal these days.

Good luck in your search!

@Jason M. If most comps in the area have Golden oak still then you could go either way in my opinion. White will be better long term and should definitely give you an edge, but you still 

Painting the trim but leaving the cabinets looks decent in my opinion, some are saying that is going to be the new look but I'm not a designer. I did just have one of my rental units redone this way because the trim needed replacing but the doors were solid. It's a darker stain on the doors though. Turned out pretty good. I'm not sure that I would try that with Golden Oak though. You could try to just darken up the cabinets and do white trim - that would probably be easier and cheaper than doing all white.

By the way, the house we sold (built 2001, golden oak throughout, sold for $265k in Lino) was our residence so the 2 weeks was no problem for us. If we would have dropped the price by $10k we would probably have sold it the first weekend.

Best of luck

I would think twice about putting that money in to this project. Cottage Grove is not Edina or Uptown. Think about your audience and what they are looking for and willing to pay for. I would say that you should get at least 2x return in the sale cost for doing it ($1700*2)

Do a quick search of what else is around on the market right now. Hopefully you have been watching what has come and gone in your neighborhood over the last 6 months or so, but you can at least check out what's pending, etc. Unfortunately it's January, but if you are going to be listing in March I wouldn't bother. I just sold a SFR last spring with golden oak in the north metro, we got top dollar in less than 2 weeks. It's not the newest trend but it still looks fine and you're selling a townhome (ie starter home), not a high end $1M flip. I am personally not a fan of painting trim - it can look great but depending on the previous finish it can be a mess. Cabinets are more expensive, but it's often easier, cheaper, and definitely better quality to just replace trim. I just did this in one of my rental units and cost was minimal.

Whatever you decide, remember your audience and consider what is important to them.

What does the lease say?

Typically a lease will prohibit tenants changing locks and give the owner/agents the right to access the property anytime as long as 24 hour notice is given for any (reasonable) reason. 

If the lease has this clause in it they are in violation of the lease. If they don't give you a copy of the key in the very near future I would remind them of this and be a bit more forceful. You have your rights as owner/agent, and they need to respect that, but good tenant relations are important so I wouldn't recommend being a bully about it. 

This event sounds awesome! 

Prior commitments are going to keep me from attending, but hopefully there's a way to make the talks available to those unable to make it. 

@Chris Johnson There are 20+ Real Estate Investing related meetup groups on meetup.com within 25 miles of minneapolis, just do a search there.