All Forum Posts by: Mike Krzesowiak

@Kenneth Freire welcome to BP man!

Welcome to BP!

Hey Todd, welcome to BP! Glad to have you as a part of the community!

I can certainly relate, it is difficult for me as well to find deals that pencil out. 

Awesome, welcome to the BP Community Keith! Best of luck to you on your first buy and hold rental!

Welcome to the Twin Cities Johnathan and to BP!

Welcome to BP Reed!

Looks good Eric, a few thoughts/resources for you (hopefully helpful thoughts):

For Garbage and Recycling, The City of Minneapolis is going to require you to use their serves per city ordinances. You can find information about that here: 

http://www.minneapolismn.gov/solid-waste/garbage/s...

The City of Minneapolis will also be your water & sewer (this is a combined bill in Minneapolis, meaning your sewage fees are part of your water bill)

Mlps Water Department and Utility billing:

http://www.minneapolismn.gov/utilitybilling/

 [A money saving tip: In Minneapolis, your sewer fees are charged to you based on the number of gallons of water you use for their water service. The city assumes that every gallon of water you use on your property (your water usage bill) will eventually end up in the sewer system (used to calculate the sewer charges on your water bill). If you can reduce your water usage on the property you will cut down on your water bill and the sewer charges on your bill. You might do this by installing "low-flow" water fixtures like shower heads, and faucet heads. Look for a fixture's "gpm" gallons per minute flow rate, the lower the number, the less water you use, the more you will save. Since it sounds like you'll be house hacking... if you plan on watering your lawn if may be worth it to invest in or build your own rain water collection barrel, and use that to water your lawn. Keep in mind it might help lower your bill, but not by a "crazy" amount. 

I'll leave you to decide and research if any of those suggestions are right for you in your water usage situation]

Also, I have heard that Minneapolis Water charges higher rates just because it is a multi-family property, I don't know, I have not owned a duplex in Minneapolis. Can anyone else confirm or deny this?

Your electric provider will likely be Xcel Energy, and depending on where this duplex is located in Minneapolis your Natural Gas provider will be either Xcel or Center Point Energy. I would recommend contacting them. Also, consider if there are separate gas meters and separate electric meters at the property. If so, you can write your lease in such a way that makes the tenants responsible for those bills for their unit. (it is also a good idea to keep this in mind when you are researching what kind of rent you can get in an area for a property, look at the listing, like actually read it! Find out if utilities are included or not in their rent prices. You could end up thinking you can rent a property for $1800 because someone else did, but the reason they were able to get that price for that property was because all utilities were included. Make sure you do some research on your comps ("comparable properties")). You might be aware of this already. 

Xcel: https://www.xcelenergy.com

Center Point http://www.centerpointenergy.com/en-us/

(You may want to confirm that these are your actual services providers. You can do this by giving them the property address when you call)

Ask them for the last years history of energy bills for the property. Some companies will give you this for a property some will not. But if so, that will be a very useful tool for calculating you bills.

Your insurance price, how accurate is this? Did you get a guess or an actual quote?

I would recommend contacting an insurance agency to get a quote before your "pull the trigger" on this deal. They will ask you basic property information that you should be able to find from the MLS or give your best guess. (or look up the permit history on the city of Minneapolis's web site here: http://www.ci.minneapolis.mn.us/propertyinfo/  Looking up the permit history will allow you to see when the roof or furnace or things like this was last replaced. An insurance provider may want to know these things to give you a quote for the property) On one of my duplex's insurance is $157/mo. Now, it is likely a completely different situation than the duplex you are considering. My point is, try to get quotes if you can. so that you have more exact number to work with. I would hate for you to find out after purchase that that the cash flow wasn't as good as you thought it would be because insurance costs end up being $100 higher. 

Best Eric! Happy house hacking!

@Sam Sharma, is a strategist... I like it. Admittedly I like what he said better than what I am about to suggest. 

However, another option to throw in the mix for you Eric; Combine 1 and 2.

You could get a bigger duplex, say one that has a 2 and a 3 bedroom unit, or better yet a 3 and a 3. You can rent out the other unit, and also rent out the remaining rooms in the unit that you'll be living in.

I would agree with @Marcus Johnson, North does has a bad rap, and there are reasons behind that reputation. A handful of investors I know have their worst rental horror stories from their properties in North. At the same time do your own research and decide in what grade of properties you want to invest in, and the risk tolerance you are comfortable with. There is high crime and low incomes in North, which do effect your investment, and the type of renter you can attract. 

Be very careful if you plan to invest in North. I lived in North for 4 years, and it varies block by block. I was in an excellent area, but 3 blocks south of me was a night and day difference. You have to take the time to know each block and neighborhood. Crime tends to fluctuate over time in North, across neighborhoods. In the 80's and 90's crime, drug, and gang activity were most considerately in the 1000's 2000's blocks, then it shifted to the the 3500's, and more recently it's in the low 3000's. This is a factor to consider if you plan on investing their long term. In 10 years it could shift, and it's hard to know if it will be a neighborhood that you are in. Study crime maps very carefully. 

Even if you think that you are looking at a property in a "safer" part of North you must ask the question "do tenants perceive this to be a safe area?" While their perception may or may not be reality, their perception is ultimately what matters because that is who you are marketing your property to. (Something to keep in mind). 

Also, consider the number of foreclosures, and vacant lots (owned by the City of Minneapolis), they are still vacant for a reason, those are evidences of investors staying out of North, they know they can't make it work and aren't comfortable with the risk. However, every investor starts somewhere. If you have to start in a rough neighborhood because it's all you can afford then you have to start in a rough neighborhood. That's where I was at, but it is not for everyone. You have to know you, and who you want to be as an investor. An think sober-mindedly about the market you invest in.

Also agree, North-East is hot right now, but it comes at a premium to get in there. You have to hustle your tail off to find a good deal there. If you're shooting for North East know your numbers, and don't get emotional, expect to be out bid many times if you're using the MLS and that is OKAY. Be patient, NE is a hot market.