All Forum Posts by: Noah Chappell

@Justin Gustafson I would use the 80k for a DP on a hard money loan (might be 30% - 40% DP if it's your first one), by a duplex or single fam, then take out a line of credit on your primary residence to use as rehab budget, then rinse and repeat BRRRR'ing.

Do find deals you may have to go where others aren't willing to. Forget the MLS, lost cause. I'd walk for dollars, then contact individual owners. Also could get a list of vacant properties from assessors website, skip trace, and contact owners. Remember, the more difficult it is, the less people are doing it, the less competition and the higher chance of your success.

@Marcos Gonzalez interesting thought in wanting to invest out of your backyard, lots of advantages, but you really have to have your investing on point to make that work. Remember sourcing and purchasing is the easy part, then you have to manage the asset for all time, so be ULTRA sure about your choice of location. In going out of state you essentially can choose any area, but probably best to choose somewhere you have ties to. After that, work on developing your core 4 (agent, contractor, lender, prop manager). If you're going to the area frequently, ex to visit GF's fam, this will be a lot easier. 

I took a quick look at Auburn and it does seem like a 1 horse town, no offense. However it is about 1.5 hours from Atlanta, which known to be a particularly good investing city. If I had to guess, you probably fly into Atlanta to go to Auburn anyways. I'd look at the SW suburbs of Atlanta. That way you'd benefit from the great fundamentals of the city, and also your ties to the area/ access to local knowledge. 

@Daniel Schintz welcome!! 

@Spud Davis first off want to say props for stretching your brain, you're heading in the right direction, just need to iron some things out. Echo most of what @Evan Kraljic said. Few things I'd add. 

First, I assume here the building is not sub metered yet, otherwise utilities would already be separated. Pretty common around here for landlord to pay water/ garbage (unless you have like side by side duplex or town house style multi fam). Heat is a bit of a wild card, if you have 1 boiler/ furnace + 1 water heater you're stuck paying gas in your name. If you have 1 boiler/ furnace but multiple gas meters (maybe the stoves are sub metered, or you have multiple water heaters), then putting in 3 more boilers/ furnaces might be less expensive. You can aways create a RUBS system for utilities and bill back tenants for utilities after you get the bill, or just put a fixed amount (ex 75$/month gas) in their contract. Obviously gets complex. My point is just switching utilities to tenants is more complicated, and generally involves expensive sub metering.

Next, be aware that all 2br are not created equal. A super intuitive true 2br in a nice area would probably fetch 1300, whereas an improvised 2br with one room added on might get 1100-1200 on a good day. 

Raising rent, assigning utilities involves ending old lease and starting new one, which can't be done during covid. 

Unless you're in the absolutely most premiere area of Minneapolis I'd tend towards more cosmetic rehabs, instead of major wall moving, etc, as I just don't see the ROI in most situations... Of course I don't know your numbers and this may make sense for you.

@Nick Scullin you don't want to put the horse before the carriage. Scaling a real estate portfolio is talked about a lot, but involves a high degree of complexity. I think your idea of starting with a house hack is great, it will allow you to get your head around the basic process of buying a multi family. You could buy one that's moderately priced and needing some cosmetic updates, so there's some value add component. After this I'd head towards the more blue collar areas to start your core investing. Maybe start with a duplex in need of more extensive cosmetic turnover. Value add is the name of the game here, and the way you'll scale. When you're confident in BRRRRing smaller multi's, then go into commercial multi family, mixed use, commercial, etc. Thats how you build your portfolio. 

@Jeff Schemmel handsome property man! I have a duplex near there, though not as nice. Hopefully we'll meet and I can tour your place some day. Cheers. 

@Account Closed I'd make a short list of the midwestern cities you're interested in, the take advantage of pandemic to participate in on line meetups before they go back to in person, which will give you unique insight into neighborhoods and major players in each area. 

@Joe Schoess good on you man! BRRRR.. maybe you can take advantage of the cold weather and suffering of local landlords dealing with high vacancy to swipe up some deals.. paradoxically the market is still red hot (maybe not so paradoxically given low supply, high demand, low interest rates, etc, etc).

@Garrett Schmidt you might consider picking a desirable midwestern city, then specialize in an associated peripheral market. For example, instead of investing in Minneapolis, you could focus on St Cloud or Duluth, which are not as strong for appreciation, but are reasonable diversified stable collage towns. 

@Garrett Schmidt at 120k for a duplex you'll probably be dealing with some pain.. Columbus, Cleveland, Akron, Milwaukee, Des Moines? I wonder if that price point would be better suited to the southwest markets.