All Forum Posts by: Mark S.

Be very careful about what you buy. For example, the older the house the greater the potential for unexpected issues. Case in point - a bathroom remodel we did last year in a 1930’s house went from a basic gut/remodel to involving new subfloor, wall studs, upgraded wiring, etc.

I have purchased sight unseen but only thru an agent I trust and only in areas I know well. I would never do so under any other circumstances, turn key or not.

Jordan - you have had good luck with the 2% rule in Minneapolis? Wow - I’d like to know how you find those. Every investor I know here would be very happy to find something that does even close to 1%!

We have had good luck doing what Garret suggested and asking a sub who he might recommend in another trade. They don’t want to suggest someone who doesn’t do good work since that would reflect poorly on themselves - and might cost them future jobs.

Buy with cash or a hard money loan, renovate then put permanent financing on it based on the post-renovation appraisal.

That is too skinny even for me with that much invested, especially in a C+ neighborhood. And remember that location is everything - even if you believe it would be a B neighborhood elsewhere, it isn’t anywhere but where it is (if that makes sense). For example, I recently did a deal that only cash flows $50/month but I have only $20k in and will have virtually no capex to worry about since all is new. And it is an A neighborhood that is highly likely to see appreciation.

Do you know a reliable contractor who could spitball some numbers for you? Then pad them by say 25% to be conservative and come in with two options - a new PP based on that number or a new closing date that gives you time to get solid bids.

Sounds like the Minneapolis market. Every investor/ real estate banker I have talked with this year has found the same thing I have. Extremely difficult to get much of anything in terms of COC. So we are focusing on A neighborhoods, are okay with very low COC as long as we are likely to get good appreciation and have solid tenants.

I had a similar experience recently. Received an email from a wholesaler on a property claiming only 5k in repairs needed. Just looking at the pics provided it was obvious the property needed a new roof, some windows, exterior trim, garage door, full kitchen and flooring. Kind of tough to do all that for 5,000!

Yes rates on investment properties will be higher, I would say 100 to 150 bps. Terms are generally 20 year amortization with a balloon after 5. Or a reset rate with an extension.