All Forum Posts by: Nick Stageberg

Hello everyone!  I have an offer out on a triplex property I expect to win, and I would like to split out the utilities on this, though this one is a particularly hard case. 

-There is a 1200sqft unit on the main floor and 2x 600sqft units upstairs

-There are two furnaces and two thermostats, but both thermostats are on the main floor, and the furnaces/ducting are split side to side.  So each furnace heats half of the main floor unit and one upstairs unit.  Upstairs tenants currently have no way to regulate the temperature of their unit, and this is Minnesota where we get to -20 degrees in the winter...

-Because of the side to side split, no matter how we redo things, we have to change a LOT.  HVAC tech thinks the simplest path is to remove the oldest big furnace and replace it with a new small furnace for one upstairs unit, install a second new small furnace for another upstairs unit, then use the newer big furnace to heat the main floor.  Bid is ~8,000.  

-Splitting out gas and water and installing a new water heater is $6500.  This one is lower priority for me, but splitting the gas is absolutely required to do the separate furnaces.  

-At this time electrical is split out, though it's still on fuses, which means we could potentially run into problems if we put new high load electrical into any of the units.  If we do, then we need to upgrade 3 panels and meter sockets, which I have a bid for at 6k.  For example, if we do mini split HVAC units or electric baseboard heat in the two upstairs apartments, now we need to do new meters.  

So figure 15k to split out gas, water, and everyone controls their own thermostat.  Any creative ideas on ways to optimize this or alternate ways we could allow the upstairs tenant to regulate their heat?  Thanks in advance!

@Dylan Raiche-Snater sorry, thanks for following up! Replied :-)

I am in a very niche submarket which is experiencing a lot of upward movement, and I ask myself this question every day.  I am still buying.  I hope to never stop buying.  As long as it's really a deal, and you have lots of room for a correction, you are safe.  It may just be harder to find a deal.  The real mistake is sitting on the sidelines.  

@Dylan Raiche-Snater hello and welcome! I am an active cash buyer/buy and hold investor in Rochester Minnesota and always happy to purchase wholesale deals. Feel free to shoot me a private message and we could get coffee sometime.

I have had truck for most of my life. Always a very useful vehicle to have. I have young kids and recently switched to a minivan. I loathe to say it but the minivan really is the king of utility. With a roof rack and utility trailer it is superior to the truck and every way.  Great gas mileage, low maintenance, low-cost,  all lots of people or stuff.  Only downside is you have to drive a minivan :-(

Hello, Matthew! I am a very active investor in the Rochester Minnesota Market. I have four projects active right now.  I will say though that the market is generally not super friendly towards investors. There are very strict regulations for Rental Properties, inspections, permits Etc.  It can be a very good Market to invest in if you can navigate the waters though. Send me a private message if you would like to get coffee sometime!

Or a 'handyman'! 

I am local to Rochester and extremely familiar with it, as well as with that property for sale.  Real estate in Rochester commands a very, very steep premium.  The same can't be said of the outlying suburbs, though that is changing.  As the previous poster said, it I do think it will take a long time before Stewartville is a suburb of Rochester, but things are clearly moving in that direction.  My personal home is near the airport on the border between Rochester and Stewartville banking on that long term trend / appreciation.  I am an active investor in Rochester (one property being actively  rehabbed and one under contract atm) as well as licensed agent and if you would like to talk more feel free to reach out. 

Thanks for your feedback, @Brian Garrett, @Tom S., @Jessica Grewe, and @Jay Helms!  I'll follow up with my investor and do everything I can to get them committed for the next deal, or maybe committed for a larger amount.  Seems like I will likely do this deal on my own. 

I have been looking for some private lending partners to grow my real estate business. I have had a number of people interested, though right now it seems like I have my first real commitment from an investor and a deal to go along with it. The commitment isn’t quite what I was hoping for, and maybe not a great fit for this deal, so I would love some advice on how to best make it work. Even if I end up with something that isn’t ideal for this deal, my ultimate goal is to grow the relationship so that they are willing to invest much more in the future and I can take down much larger deals that I an unable to do right now, say a small apartment complex.

The current deal I have under contract is a duplex in Rochester, MN. Foreclosure. Purchase price is 79k, ARV is maybe 135k, requires about 25k in repairs. I am currently planning on paying for the property and all repairs with cash. This is sort of a bread and butter deal for me where I should be able to buy it, rehab it, rent it, refinance it, and get all of my money back out to do it again.

The partner I am working with is willing to contribute 50k on this deal. I was hoping to partner with them as a private lender, offer them the first and only lienholder position on the property, and expect to pay them back in <12 months once the refi is complete. We never talked about an interest rate or other terms because they are looking for a long-term position in the property. Perhaps something along the lines of: They invest 50k, get paid paid when the property refis, and get x percent of all future cashflow and profit when the property is sold.

I'm not quite sure what to offer them that is fair to both parties and is of any benefit to me. 50k doesn’t really free up enough cash for me to do another deal, and I can do this deal on my own. I’m happy to pay for interest on some extra money as a proof of concept for the partner, but offering them a long term positions seems like an expensive option that I don’t really need. The other big challenge I see is that this deal is so small/cheap, that it seems like the overhead of setting up an entity, taxes, management etc will be a long term burden. If we were talking about a large apartment complex with on-site management and multiple investors it would be another story altogether.

So what do you think?  What would you do with this opportunity?