All Forum Posts by: Mike Romanowski

I think Joe hit the nail on the head. My wife and I have been looking for distressed homes at reasonable prices in this market and not finding much. Market is so hot that even junk on the MLS is really high. Maybe it will be different next spring. My wife is a realtor so she gets wind of possible off market deals some times. Even unlisted, sellers are pretty aware of how hot the Sioux Falls market is and ask for premium prices. We did actually get one under contract just recently but it took quite a while to find and even then it will just be an okay good deal.

Hi Melissa,

I too am happy to see another investor from Sioux Falls on BiggerPockets.  Welcome!

Hello Everyone,

I received this message a while back from Aaron Junck, another Sioux Falls investor that has been active on BP.

I went to one meeting and it was informative but I have not been able to get back to another one yet.

He also provided a link to one of the REIA websites. It does not look like it has been updated in a while but there is some contact information on there that may still be of use.

http://www.sdreia.com/home.html

Hope this helps. :-)

@Des Shei Hi Drew, We got lucky and found this one on the MLS. We were working with a good friend who is also a real estate agent. He saw the potential right away. He's the broker my wife works with now. He showed us the property once and we walked away because we didn't think we wanted to take on that much work. I think everyone else was afraid of it due to the amount of work needed too. The lot is huge and needed a ton of work, including regrading a significant portion to slope away from the house not to mention all the trees that needed to be removed. Also the house was REALLY in rough shape. It was a tough decision as to whether or not to knock it down or rehab. It was that far gone. We finally decided since the bones of the structure were sound and you can't get a much better location in Sioux Falls (McKennan Park area), we would do the rehab.

My wife and I are real estate investors in Sioux Falls, SD.  My is also a realtor licensed in SD.  Here is the story and some before and after pictures of our 2nd non-owner occupied flip.  The first one was several years ago and unfortunately we do not have pictures.  We bought this house for cash as a foreclosure due to it's very desirable location.  Even though we were not sure what would be best, tear down the house and resell the lot or rehab the house.  In the end we decided to rehab.  We did all the work that we legally could on this one.  Only subbed out the plumbing, electrical and HVAC which has to be done by licensed contractor here unless you are an owner occupant, then you can do it all yourself.  Even though we enjoy it, we do not plan on continuing to do all the work ourselves for much longer since that model does not scale.  The house now has new plumbing, new and updated electrical and new furnace with central air conditioning.  We have a signed purchase agreement from a cash buyer for this one but closing will not be until May since it is currently rented until then.  I don't want to list all the numbers until after closing.  For now I will just say that we made a 22% annualized return on our total cash investment.

Before: (We had already started taking out some of the 20+ trees we had to remove that were all volunteers growing in bad locations all over the lot or were dead.  Hated to do it but it was necessary.)

After:

Before: (Sorry about the image being rotated 90°.  For some reason it rotates portrait images to landscape when they are uploaded)

After: (Same kitchen taken from a different angle looking out through the widened opening to the living room)

Before:

After:

Before: (Bathroom)

After

I don't really have before shots of the the rest of the place so here are several more after shots.

Living room

Master bedroom

2nd bedroom.  In here I rebuilt the stairs to the 1/2 story upper floor.  I made them an "L" shape since the old ones were very narrow and steep and when you got to the top you had to duck or you'd plant your face into the sloped part of the ceiling.

Half story upper floor (attic)

Basement (Added an egress window for future legal occupied space. Decided not to finish the basement ourselves but it was an added selling point for buyers)

Sorry about the rotation again.

If you have any questions please don't hesitate to ask.  We learned a lot doing the project and enjoy sharing what we know.

Thanks for checking out our story and happy investing!

Mike

@Ryan Chase  Welcome to BiggerPockets. My wife Holly and I are also real estate investors in Sioux Falls.  Holly is also a realtor that understands the needs of investors in case you are looking for one.  We recently sold our 2nd non-owner occupied flip.  Over the years we've flipped 2 others as owner occupants as well.  Also I recently got my Construction Supervisor (aka contractor) license from Sioux Falls but plan to use it mainly to legally work on my own flips for now.

@Aaron Junck Could you please send me the next REIA dates and times as well. I've been meaning to attend but haven't made it yet.

Thanks @Raymond B. 

Hi @Drew Adam, welcome to Bigger Pockets.   I have not used any property managers yet but a friend of mine recommends Nagel Property management.   He lives in Florida but owns a home here and uses them to screen tenants.  The home is fairly new though so he manages it "day to day" himself.  Hope that helps.

@Mark Gruetzmacher have you thought about trying a direct mail campaign to absentee owners? I wouldn't be surprised if there are a lot of them with property in the Rapid City area since, for South Dakota, its the big vacation spot. We are in Sioux Falls and just getting started as well. We have one rental that is in a great area but still only makes it to 0.08 on the rental income to purchase price ratio. We have decent cash flow but only because we have about 40% equity right now. We're running into the same thing over here as far as the low rents for the house value. Most will not meet the 1% rule let alone 2%. My plan at the moment is to fix and flip my way to enough cash to be able to get into multi-family. But so far I'm not finding much to even offer on from the MLS so I'm considering a direct mail campaign to find some decent fix and flip deals if they're out there. What do you think? Have you looked at the Sioux Falls market?