All Forum Posts by: John Woodrich

@Soda P. we see people come on here often who ask one question and leave, it typically happens when someone doesn't receive the response they were hoping for and it could be tracked back to them at one point.  For example, if I were to make the above post, received advice, then decided to replace all the plumbing on my own.  I wouldn't necessarily want it out there that I was going against any licensing rules. 

I learned quite a bit in the contractor course and hopefully you do also.  The test is a matter of learning the code book and a little memorization.

So....  because of auto-fill issue you decided to register your real name which is Soda P. as in Soda Pop? 

@James Hamling when you invest in markets like Duluth or Virginia you have to pay close attention to CapX as these markets have relatively no appreciation and you are purchasing old properties.  Cash flow can be good but if you don't account for having to replace a roof or the boiler you may lose a year or two of cash flow. 

The properties may be cheaper in these towns but supplies and labor are not proportionally cheaper so a major improvement will often wipe out cash flow quicker.

Setup a consultation with @Brad Schaeppi, he is an expert.  His website is https://minnesotalandlordlaw.c...

@Matt Higgins I like that they asked the question, said they were going to get a license, then wanted to go off record quickly!  I agree after the drinking part, try to stay off my phone!

Going to send you a message related to your situation.

@Account Closed Kaplan does a pretty good job, getting a license is largely about learning the code book.  Believe it is a 2 day course.

@Account Closed to flip homes you are required to have a contractor's license in MN or have a contractor complete the work.  Here is the information for you to read, it falls under "builds or improves for resale or speculation" https://www.dli.mn.gov/busines...

MN DLI requirement are for general building including pulling a permit for an egress window or any general building permits.  Plumbing and electrical work has to be completed by a licensed plumber/electrician.  You can't do the work even if you have a contractor license.

The inspector is doing his job and letting you know the law at the same time, some cities seem a bit more lax on this.  Right now it sounds like he is tipping you off to issues and being a pain but if he sees you replaced all the plumbing without a permit that is a quick way to get a final stop work order and him require all licensed contractors.

Other flippers make money by having people who can work at a reasonable price and they find good deals.  You know what they say, "flippin' ain't easy"

@Matthew Clanton the people making money developing have sub-contractors in place and they are acting as the developer.  I don't think there is much of any room in the sub $250k market to make money on new construction if you have to pay a developer.  In the price range you are thinking it is difficult to build houses in most areas, build costs have been skyrocketing the last few years.

@Matthew Clanton Do you have any new construction experience?  If not it is pretty unlikely that anyone will give you a loan on this unless you partner with a developer to build the homes. 

If I were you I would talk to the city to make sure the zoning you are seeing online is correct (county zoning doesn't always jive with the city permitted uses) and look at the city planning commission meeting minutes to see how they are working with other developers.  Tell them your plans, they may know something about the lot that you don't already know and the city worker is unlikely to steal your idea.  You will need a soil test, you will have to complete and file a plat map subdividing the land, you will have to make sure the septic systems are not too close to drinking water or other properties, etc.  Not sure what house prices are in that area but in most areas it is far cheaper to purchase rental properties than build. 

I haven't completed any new construction yet but have been working on a couple deals on and off for a while.

@Morris Vides as Jordan mentioned, there isn't much in Mpls that would meet your criteria.  If you find something there is likely a reason why it is that price (near crime, bad neighborhood, or needs substantial work).

@Saajan Bhakta although they are employees and receive a wage like certain staff employees they are not treated the same for tax.  The IRS would look at the house as a personal asset and not a business asset as it wouldn't have a business purpose...

I can't think of a good way to make this even gray for you.  You could maybe twist the facts if they had a personal residence they lived in that was far from the hotel, they needed a house nearby for staff and infrequently when they manage it...  But that wouldn't work here.

You mentioned the move was related to health care - have you considered the income tax consequences?  Income taxes are higher in MN than WI.  It would depend on their tax situation but tax increase may offset the cost of health insurance pretty quickly...