All Forum Posts by: Peter Christensen

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $800,000
Cash invested: $120,000

I used the equity I had built up from my townhouse I bought in 2013 to fund this deal by selling it and making a contingent offer. The deal went through and now our family lives in one side of this duplex while we rent out the other unit. The cash flow if very modest, but it will improve when we move out and rent out the other side (which I hope to do in 2022), however, cash flow is not my number one priority with this property as it should hold value/appreciate very well in the long term with its proximity to Lake Minnetonka.

What made you interested in investing in this type of deal?

I always wanted to try a house hack. I also wanted to sell my townhouse and move out of Minneapolis.

How did you find this deal and how did you negotiate it?

Zillow/on the MLS. It was listed for $825k. We offered $775k and eventually met in the middle at $800k.

How did you finance this deal?

Technically these are two twinhomes, not a duplex, so I put 25% down on the side that we rent out and only 5% down on the side we live in since we got a primary residence mortgage on that side. I had no cash at the time of the purchase, but we made an offer contingent on the sale of our townhouse, which sold and had more than enough equity for the down payments.

How did you add value to the deal?

At this point, we haven't yet. My attempt to raise rent when we had a vacancy failed since the unit was available February 1st. I ended up cutting rent a small amount to avoid vacancy. The property was in great shape when we bought it.

What was the outcome?

We have a beautiful duplex that should appreciate in value and rent that we plan on holding for decades.

Lessons learned? Challenges?

The unit we now live in had a tenant in it on a month to month lease when we bought. We needed to move into that unit so the seller informed the tenant he had to move out, which upset him, and he caused some damage to the unit on his way out. When we informed him that he wouldn't be getting all of his security deposit back, he threatened us with a lawsuit, which spooked us into being pretty lenient with him in the end. We should have handled that situation better and stuck to our guns.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes. DM me if you'd like to get in touch with our team of agents or lender.

You guys are all telling me what I knew deep down was the answer:  get another opinion.

But the main reason why I posted, was to see if any of you had come across this before with a garage door specifically, where the repairman claims his repairs aren't lasting because there is something wrong structurally with the garage itself.  Anybody know what he's talking about and could there be any truth to it or is he just making excuses?  This is why I'll get another opinion from a professional, of course, to see if they see something that would agree, just wondering if any of you have encountered that before.

Thanks for the advice.  I think I'm learning a lot from this experience.  Sometimes making mistakes is the best way to learn.
I'm going to reach out to other garage door repairmen in the area and see if any of them are willing to come take a look at it before it breaks down again.

This past November, I got a call from my tenant one morning that the garage door at the house he is renting came off the track and wasn't able to close all the way.  I reached out to a couple local repairmen, and hired the first one that was able to fix it that same day.  He had a good reputation on Google, and he's always struck me as a straight shooter.

That first repair was not cheap.  He had to replace a panel of the garage door, a cable, some of the track, and he rebalanced the door for $971.

About a month later, the tenant calls and tells me it's off the track again.  I call my repairman.  He says he stands behind his work so he goes over to the house and puts it back on the track, tweaks a few things (not really sure what he did) but he gets it running smooth again.  No charge since he felt responsible for making sure his repair held up.

Another month goes by and the tenant calls again, says it's been coming barely off the track lately but he's been able to get it back on the track so he could use it, but this time it came off so bad he couldn't fix it and was afraid the door might fall down and land on his car (or worse, him or his wife).  I call my repairman, he makes some other repairs this time, replacing the arm that connects the door to the chain that is pulled by the motor and braces the top panel with a strut that spans the panel, and this time the repair is only $199.  Since he purchased more parts to make this fix, I figured it was fair that I had to pay for them.  I didn't feel great having to pay more, but I figured I'd probably get charged a lot more going with another guy.

Well now fast forward a couple more weeks, and the door is off the track YET AGAIN!  My guy is working on fixing it as I type this, and he says it's going to be $450 this time.  He's replacing more of the track that in the past he tried to just bend back into place (I probably should have insisted on replacing it then, but I'm trying to manage this over the phone and not drive the 1/2 hour to the property each time a repair is made).

I feel stuck.  Anybody have any sage advice on how to handle this?  The repairman seems like a standup guy, and he has solid reviews on Google, but I think he might not be seeing something that is the root problem here.  I keep using somewhat of a "sunk cost fallacy" of thinking he's giving me the best price possible because he knows he's kind of screwed up, but should I just punt and find a new repairman?  I'm thinking about having another guy come look at his work while it's still operational to see if he can spot anything wrong with the installation.  My repairman also keeps hinting about how there may be something wrong with the garage structure, separate from the garage door, that would need to be fixed by a carpenter or someone like that to fix the root problem.  Anyone have any idea what he means?  I suppose if the whole garage isn't built very level or square, that could pose some problems.

Not sure if this matters at all, but the property is located in St. Paul, MN, for what it's worth.

Please help!

Investment Info:

Single-family residence buy & hold investment in Saint Paul.

Purchase price: $223,000
Cash invested: $70,644

Single family home in a nice area but I believe has a lot of potential for appreciation since it is close to the soccer stadium, bars and restaurants, and the light rail line. It's also very close to one university and somewhat close to four other universities, which acts as a great "moat around my business". If all else fails, I could rent to students (and probably make more money, just potentially have more issues).

What made you interested in investing in this type of deal?

This is my first investment (unless you count house-hacking my home back when I had roommates who paid me rent), so I just wanted to get my feet wet and learn how to be a landlord and see if it's right for me.

How did you find this deal and how did you negotiate it?

I bought off-market from another investor. My agent's boss (their team lead) was the seller's agent so we found a deal that worked for both of us.

How did you finance this deal?

30 year fixed rate traditional mortgage

How did you add value to the deal?

Simple repairs and cosmetic improvements

What was the outcome?

It's currently renting for a great rate with great tenants.

Lessons learned? Challenges?

It's worth putting in a little more effort up front to be able to rent the unit for top dollar. Also, it was worth asking an agent for help and to mentor me in finding an off-market deal.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes