All Forum Posts by: Tim Johnson

We have rental property in St. Cloud.  Yes, the class is a requirement.  It's a pain, but its probably a good requirement to ensure everyone has a basic understanding of the law.  

The distance requirement is probably not so you can get there in case of an emergency.  It's probably more to ensure you're in touch with what is going on at the property.

I understand your frustrations and hope you find a workable solution. I'd offer to help, but as you know it is a requirement to have a real estate brokers license to property manage a property you do not own.

Best of luck, let me know if I can help in any other way.

This article mentions Minneapolis, along with San Diego, Los Angeles, and Seattle.  From everything I've heard, those other markets don't cashflow?   So I'm not sure what they would be basing the rating on?

Hello BP!  I was doing some insurance shopping the other day.   We own 5 multifamily buildings.  Insurance rates for 4 of the buildings are "reasonable". 

The fifth building is an older all-brick building.  It was originally a school building and converted to a multifamily (10 units) around 40 years ago.  

My insurance broker can only find 1 company to insure the building, and their rates are very high.  My broker claims they cannot get other insurance because this is a 'converted structure'.  

Does anyone have any suggestions about getting other insurance companies to quote the building?  The electrical is all updated, we've done new smoke detectors and fire extinguishers.  The walls are about 2 feet think, so the building seems indestructible to me.  I'm not sure why the fact that it was once a school-house matters?  Or (more importantly) how to get a better insurance rate despite the building's history. 

Ah yes, that makes more sense.  

$80k is a nice profit...congrats.

Good story!  Sounds like a great learning experience, as well as practice exercising that risk muscle. 

To clarify, you said you invested $124k.  Does that include the purchase price and the remodel costs?  Or was it a $124k remodel? 

Hey fellow Minnesota IT guy/Real Estate investor! I did one to one 1031 exchange from a SFH to 20 unit Multifamily last summer. A 3 to 1 exchange should work, but it would certainly make me nervous. Three closings, and if any one of them had a hiccup it would put the whole thing in jeopardy.

Can you pick the one house with the most equity, and exchange that into a (perhaps) smaller multifamily?

@Amir B. You mentioned you were a buy and hold investor.  Have you considered doing a 1031 exchange of an existing single family property you own and parlay that into a multifamily?  Home values have risen substantially the last 5 years.  Depending on how long you have held your property you might have a good amount of equity.

For example, if you had $200k equity in a home you could use that as your 20 percent down to purchase a $1M multifamily.  And there are no negative tax consequences for selling.

If that sounds interesting you should read up on the rules of 1031 exchanges.  There are some important time windows and other limitations.

Good luck!

@John Walter - I agree with @Armin Nazarinia "If you have a real estate agent that is pushing you into something I would recommend looking for a new agent, (s)he may not be well versed in multi-family."

For $330k you should be able to find a duplex.  Live in one half, rent the other...great way to lower your cost and build equity.

Good luck!

Interesting!  Thanks for writing this up.  I've thought about a dual-use short term rental cabin/personal use here in Minnesota.  Perhaps the Brainerd lakes area. 

Can I ask, other than the summer months, how many weeks are you expecting to book?  Do you get any snowmobilers or other winter bookings?

Also, do you mind sharing how much it costs to furnish?  We furnished a 2-br house to Airbnb.  We spend $5k, but purchased used furniture where we could.  I'm sure the new furnishings look really nice and probably translates into higher rents? 

Hi Jordan.  There used to be a meetup that met at the St. Cloud Library.  That was a few years ago.

If you want to organize one, I'd attend! :)