All Forum Posts by: Noah Chappell

@Harith Hadi your friend sounds like they'd kill it in any market. You're lucky to be in a great market yourself. I'd focus on honing your skills where you are. 

@Ryan Doucette don't wait to buy RE, buy RE and wait! Lots of things you can't know until you struggle through them, so best to educate yourself a reasonable amount, then just jump in on something that makes sense and is in the spirit of where you'd like to end up. If you're serious about getting into multi family, start by house hacking distressed triplex or 4 plex. In doing so you'll learn invaluable lessons, and you'll form your "core 4" (real estate agent, contractor, lender, property manager). After this you'll have the knowledge and connections to think about scaling to some larger multi family. 

@Arion Trammell I think you have the right idea man. Getting into real estate is the best way to build wealth over generations. Lets take an example: 

$200,000 duplex with 2 2 bedroom/1 bath units, each rent $1,100/month, property tax $3,000 yearly, insurance $2,000 yearly, you pay garbage/ water/ sewer and they pay electricity/ gas 

You purchase with an FHA loan and put down 5%

You'd be paying about $175 + your personal gas/ electric bill monthly to live 

Above example is 100% realistic, so I don't see any really problems with your idea. 

@Ben S. I am in the midst of an identical situation with my 4 plex, that I picked up in January 2020. 2 2br/1ba and 2 3br/1ba units. Each needed a total cosmetic rehab. All rented 2-3 hundred below market. All month by month. My approach was to end 1 lease at a time, rehab then slowly put in new tenants. Didn't work given that when other tenants caught wind of the changes everyone left, with one hanger on riding out covid to not pay rent. 

All in all, my advice is wait out covid and don't rock the boat during this time. Take control of the property, and sit on things breaking even until things shift more in your favor. Last thing you want is 4 tenants who are angry, realize they can simply stop paying, and occupy your property for free while you pay their rent and utilities. 

After you have more recourse, and if you can afford it, I'd end 2 leases at once, attack those units, then repeat with the other 2. You might face the whole building being empty at once, but that's ok. In the end you'll have a repositioned building with a new culture. Better to rip the bandaid off than to prolong the pain in my opinion. 

@Danielle Dickens the thing to do would be use part of your money to buy a place that is financeable for like 25% down, then use the other part for your rehab, then refinance. So for ex a duplex with an ARV 200k that you purchase for 130k, put $32,500 down, then rehab for 20k, then refinance at 75% LTV with a local credit union. You could also use some short term financing or other loan that allows you to include the rehab in the loan. You might want to call like 15 credit unions and ask if they have any rehab-ish loans available that allow purchase price + rehab in one loan. The most important thing is to get crystal clear on your numbers so you are able to refinance and pull close to the full amount out.

@Toby Khan I think you'll find St Paul is a generally decent and stable place to invest. Appreciation in Ramsey county is more modest than its neighbor to the west, but still alright. Most of St Paul is blue collar and consistent. Definitely check trulia crime map for the specifics of that area. Obviously check the condition of the 4 plex and the type of unit, studio or 1br will rent far less than 2br or 3br. Make sure it hits at least 1.2-1.3 rent/price ratio to cash flow decently. Good luck. 

@Matt Higgins my portfolio consists of 2 and 3br C class units near downtown mostly in Minneapolis but also in St Paul. We try to set rents slightly under market, so 2br would be 1200-1250 and 3br would be 1350-1400. Even so, we've had a unit sit for more than a month now. It seems there's a good amount of inquiry, but no qualified tenants or serious applicants. Might just be a matter of playing the waiting game.. Weather will be nice the next week or 2, but after that might have to lower things anther 50 :( 

@Danielle Dickens I'd really get micro about what sub markets in Minneapolis or St Paul you want to focus on, those areas that have appreciated fast recently but aren't quite popular yet, think areas next to the hot spots where most don't yet recognize the growth in value. I think these will be your best BRRRR properties. Try to minimize degrees of separation between you and the seller, the more realtors, wholesalers, etc, involved the more likely someone else will recognize the opportunity and stanch it up. Don't be afraid to leave 5 or 10k in the deal, that wouldn't be considered a shortcoming but rather a great return on investment. Just take the plunge, which is the best cure for analysis paralysis.

@Dain Herrala I'd say get crystal clear on your criteria first, as @Corey Hawkinson has done. After that walk some neighborhoods where you find properties that meet your criteria to make sure you like the vibe - generally neighborhoods in the "path of progress" next to booming areas are best. Then start makin' your offers! 

@Frank Redman congrats on wanting to get started. I lived in Boston for many years, but relocated to Minneapolis for several reasons, chief among which was my plan to start investing in a more advantageous market. Part of me does want to move back to Boston eventually where things are high end and fast paced.. would be awesome to do some condo conversations, etc. That's more advanced stuff, and I like your idea to start somewhere else first. 

I have a cousin who is kinda the tech millennial type who's been investing in Columbus from Manhattan. I think he partially feels like he bit off more than he could chew, but is able to keep up with things. I think the advantages of being local, especially as a new investor, can't be denied. 

If you're serious about RE, I'd recommend investing relatively locally first, then moving to where you really want to live and managing your managers from a distance. I think you could find some decent cash flow markets within 1-2 hrs of Boston, like maybe Salem, Lynn, Worcester, etc.