All Forum Posts by: Matt Mayotte

I have never heard of a stipulation that says what side the finished side has to be on.  Each city is different though, so check with the building department of your city.  They will have height and post depth requirements also that you want to make sure you follow.  If your neighbors are renters they likely won't say anything or know about it anyway, but its always best to make sure you are following all of the rules.

I have a rental over there.  Dowling and Fremont.  Its been ok.  I bought the property at county auction and remodeled it and had steady tenants for the past 7 years.  They have not been great tenants but they were mostly ok until a couple years ago when they started getting behind.  I have not had any problems with the city over there, but I also maintain my properties and don't do slumlord type things.  In general north of Dowling ave is good, and anything close to the parkway is good.  I lived on lowry and lyndale for 3 years when I bought my first house and I didn't have any problems.  One block away on Bryant there were constant drug raids and such.  So it really is block by block.  There are a lot of homeowners who have lived their for decades and really make the neighborhoods nice.  There are also a lot of absentee landlords who cause deterioration to the neighborhoods over there, so the city can give you a hassle if your property falls into tier 2 or 3.  The city can be a hassle anywhere though.  They made me do some BS repairs on my duplex in NE that were completely unnecessary and kind of took away from the original design of the house.  

I am considering charging 2 months security deposit.  I did not see anything explicitly prohibiting this in MN Landlords and Tenants rights and responsibilities.  I lost close to 10K between loss rent and damage with Section 8 tenants which was my first experience as a landlord.  We have a 3% vacancy rate.  Why should I put up with extra inspections and repairs and way more added risk for no extra gain?  I don't hate poor people but this program is poorly ran.  All they would have to do to make it well ran is have the government assume financial responsibility for their recipients.  They could just kick them off the program if they caused damage or didn't pay.  They would very quickly get rid of the "bad apples" and make this a win/win program for the people who are struggling and need it as well as for the landlords.

Ok ok ok you guys are right!  I'll get a lawyer if I decide to move forward.  Here is the deal...the house is a complete dump!  There was a second floor addition partially done that was partially ripped out by a tenant who had some drug issues.  It needs a new kitchen, a new upstairs bath, stucco siding major issues, and an entire second floor finishing.  It is structurally sound but every room in the house needs something.  She advertised the house as being 1800 Sq. Ft, but when I measured it, I got 994 Sq. Ft!  I asked her about the discrepency and she said that if I were to finish the basement it would be close to 1800 Sq. Ft.  There are 500 Sq. Ft. on the first floor and second floors, so at best I would get another 300 Sq. Ft. out of the basement of usable space.  This is still 500 short of the advertised size  This one is not a good deal.  I might offer her 70K but even at that it's a lot of work for a very slim profit.  There are 2 good things in that its in a pretty good neighborhood and its zoned commercial.  Still thinking about this but it might be a bit too much work for too little profit.

Thanks @Mindy Jensen.  Every time I've dealt with attorneys they have been extremely expensive.  What are your thoughts about just filling out a generic PA from office max and having the title company hold that along with the earnest money?

Ok thanks @Toby D.  I can have them handle the title search and closing also.

Ok, I might have a deal tomorrow with a seller who has inherited property from a relative and sounds pretty eager to sell.  There are other buyers interested so I will need to move fast but I want to make sure I do the offer correctly so I don't get screwed.  She is asking 110K for a property that has a partially finished second floor addition.  Looking by price per sq. ft. estimations on zillow I figure its worth 260K after its done.  I have about 15K liquid funds immediately available.  I'm in the middle of a cash out refi on a duplex that I own and will have funds from that in another 2 weeks.  If that falls through I have retirement funds that I can tap but I'll get hit with the 10% penalty and I really don't want to do that unless absolutely necessary.  So assuming I like the property (I have a showing tomorrow afternoon), should I ask her to write up a PA and give her 2K personal check for earnest money?  How do I know she won't run with my money?  I have never met this person so I have no idea how honest she is or isn't.  She mentioned that she had one offer but it was contingent on the sale of that person's home which they hadn't sold.  So she may be legally bound to sell it to that other party, I'm not sure.  She had it advertised at a lower price and then when I called her she mentioned it was now going for 110K...that also sounds kinda shady.  I noticed there are special assessments on the property for 1500$ for unpaid citations also so that's indicative of someone who is flat broke.  Any help on how to protect myself in this deal would be appreciated.

@Michael Seeker Thanks for your advice. I've been in contact with a commercial lender and they will do 75% LTV at around 4.65% if I recall. My credit is excellent and my income is good so they sound pretty eager to work with me. They don't fully amortize their loans and only offer a 10 year max, so I'm not exactly sure how that will work. I'm doing a cashout refi on my duplex and selling a single family next month to have downpayment funds. I'll be putting together a rent roll and P&L statement so I have some learning to do there since I haven't had to do that before. I guess its the same cliche in commercial as in all real estate...location, location, location!

Hey Everyone,

I've been a landlord and have remodeled my own single family (one duplex) properties for the past 8 years. I've had some hard lessons with bad tenants over the years but overall I am doing pretty good. In looking at the NOI and Cap rates of some apartment buildings available for sale right now I've decided to start selling my single family houses and jump into apartment buildings. I am thinking of starting with a 6-10 unit building depending on how much I can get financing for. So far from what I can tell the more units the higher the NOI in general. Also, I'm not interested in being a slumlord. I maintain my properties and want to make sure I'm having a positive impact in the neighborhoods where my properties are. Does anyone have any advice for me in how apartments differ from single family houses and duplexes? Are the tenants similar in their issues and how to deal with them? I generally try to buy properties that need some work for cheaper and then do the work myself to improve the equity and resale value. Is this a good strategy for apartments as well? Thanks for your advice!

Just make sure you don't get stuck in a situation where you have to pay the 10% penalty and tax on top of that if you were to lose your job.  I use my 401K loan as a fall back plan in case I need a quick loan and not as a primary investment fund source.  Realize your paychecks will be smaller, your money is not earning anything in the market while it's loaned to you, and perhaps the worst thing is that if you take a loan, you don't have the safety net of using your 401k for a loan until that one is paid (in many cases).