All Forum Posts by: Marcus Johnson

 For me it was crime.   I had a duplex in South Minneapolis for years and was running a successful business.  But then in 2020 the summer of riots.  I watched the Holiday station get burned to the ground on 46th and the Walgreens get looted.   When I drove to work during that time from the South, you could see black smoke high in the air from the burning of buildings, it looked like a war zone.   I have footage of the Target on Lake being looted, Dominos burned up, the liquor store looted, many other businesses burned to the ground the what I will never get out of my mind is what looked like Niagra Falls coming out of the second floor of a huge building to put out the fires.   Not to mention the anarchy where they burned down the 3rd precinct police building.  After 4 days there was finally the National Guard out to cool off the riots.  Employees where I worked were very concerned about car jackings.  We were told to stay home for a week during the riots and when it was clear you would see National Guard troops armed on the corners.   

This wasn't the only reason we sold our duplex, but it was a huge reason, Minneapolis just became to scary and a lot of crime.  We didn't want our tax dollars to support the city and thought it was a good idea to get out while the price was right.  

Yep, who knows, opportunity costs could factor in, but for my wife and I, we were very successful with the labor and values adds, customer service we provided that allowed us to have excellent tenants and guest in our Airbnb, that after 9 years, the 2020 Minneapolis riots, watching businesses get trashed and burned to the ground, the market being at an all time high, I wanted out of Crimeapolis, so we cashed out on both properties, made a ton of money and have almost paid off our primary home.   

We built wealth based on these decisions and will never look back.  I cannot wait to see what the future brings.

 Thanks.  My tax attorney is trying to get me into Commercial real estate, but it doesn't really excite me right now.   I have envisions of doing storage facilities for boats, trailers, campers, etc.   I have a lot of interest in dealing with this type of equipment and believe I could provide excellence in this area, but not ready to move forward until our primary is paid off which shouldn't be to many more years and we have zero debt.   I also have interest in hard lending and short term rentals.  I am very hands on and have built a lot of wealth because of that, plus I want a new career once I retire from the IT sector after 25 to 30 years with two pensions.   

 What about prior to 10 years ago?  Did those investors get lucky?  My parents have owned farm land and housing throughout the 70's, 80's and 90's and made a killing by making good choices long term.   My point goes to show that cash flow continues to go down hill and IMO it's the appreciation that is important.   I'm glad I got out of this current market and plan to get back in when I think I can make good money again.

Just prior to my first real estate investment in 2014, the 2% was heavily promoted by Brandon Turner.   Then more recently it was lowered to the 1% rule.  Now the current staff are promoting around .8%.   So interesting how the expectations for cash flow has just bottomed out to under 1%.    Does anyone else find that fascinating?   We bought a duplex in 2014 for 180k and rents were $2,500.   That property just sold for 375k, so that means the new owners aren't even getting a cash return on rents of .6%.   I've sold all of my rental properties now, because the market was insane in 2021 and 2022, people would do almost anything to get into the market.   Our goals had changed and we wanted to pay off our primary before going back into real estate again.    We couldn't be happier to have made out so well on our rentals and look forward to the future in some other type of investment.  

In the state of Minnesota, one should be able to get their first unemployment check in about a week.  Ask her about this?   As others have said, I would stick to your lease and not stray.  You should have already delivered a Late Rent Notice:

Send a Late Rent NoticeThis is a piece of paper reminding the tenant that the rent is past-due. It should include a list of all fees that are owed (including late fees) and a warning about further legal action you'll have to take if the rent isn't paid in full very soon.

@Bonnie Low

Read my reply to Gerald Pitts.

@Gerald Pitts  Let me be very clear, I would only advise purchasing out short term rentals in this area if you are within 20 minutes of these properties for management and turnover routines, you won't make any money if you have to distribute these duties.  My point was that there would be quite a nice niche for someone who enjoys the lake areas and wants to be part of the community, long distance landlording wouldn't be profitable.   We bought the lake property in 2018 with original intent to convert the property to 4 season cabin which would be value add and sell it in a couple of years.  What we found is that we stopped using the cabin frequently and started advertising on Airbnb and found a ton of interest of tourist from Iowa, South Dakota, Minnesota and Wisconsin.   It took me about a year to figure out exactly what the right prices are for each season or holiday of the year.  For example ice fisherman and hunters love the area from October until March, bullhead days in Waterville, MN, you could upcharge per nights to around $250 to $300.    Christmas was very popular, brining in $125 a night.  Spring and Summer brings in the boaters and fisherman, I started getting repeat business from the same customers and they were reserving 6 months in advance.  In 2019, we brought in $15,000, which could have been much higher, this was the year I was learning the systems, once you gain popularity and are 5 star hosts on Airbnb, like we were 8 times over, people flocked in.  In 2020 right before Covid, we rented to 4 metal workers doing a big job in Waseca for $6,000.  We finally sold in May of 2020, because I was tired of driving an hour to do change overs and we no longer wanted a cabin anymore, because we missed camping with a travel trailer.  It's really to bad, because we were running an awesome business and the customers were repeats.   There is definetely a market for someone down there if you live in the area and like to get your hands dirty, if you are a long distance landlord, this probably isn't your lifestyle.

@tim 

@Tim Swierczek

Let me try to help you.  So in St. Paul where they passed an referendum on a 3% increase in rent cap, my question was does that apply when you are in between tenants and Bill Brandt replied with a very good answer, saying that yes it does.   The reason I want to know the answer to this question is should Minneapolis adopt the same type of policy, then I want to educate and prepare myself for this.   My rents are at market value and I retain many of my renters for multiple leases.    I have been a Tier 1 landlord since 2014, my businesses have been quite successful, I've increased rents based on value adds, so that would tell me going forward, that value adds wont take place by Landlords, because the return on investment would be low.  Luckily, I've reached that pinnacle, so I don't for see  other value adds taking place at my duplex in South Minneapolis, but the cash flow is very good and I have 10 years left to pay on the mortgage, in which is one of my many goals before I'm 60.  I also want to see what happens in Minneapolis, before I purchase another Duplex, right now I'm in the savings for a 25% DP, hopefully to achieve within the next year or so.

Also, for us Tier 1 landlords that take very good care of their tenants and are timely and provide good customer service, why would they want to lose someone like me should they go competely off the cliff?   Based on the result Referendum #2, (Abolish the police), the majority of citizens were not on board with this idea and voted it down.