All Forum Posts by: Kevin Powell

Below is the link for the meetup @David Moore is talking about. Thank you for setting up the group!

https://www.meetup.com/Bigger-Pockets-West-Metro-M...

I am interested as well. 

@Account Closed What relevant data Zillow have other than a price estimate that you feel the MLS is missing? Does Zillow only pull its data from MLS or is it pulling from county website info as well? I am curious as I often run across listing on the MLS that have incorrect information about square footage, bedrooms, bathrooms, etc.. Are you comparing the MLS to the ZIllow in that way?

It must pull from county websites as well for valuation and information of off market properties. It would be interesting to see a comparison in square foot listed in MLS vs. Zillow.

As far as the script. I think it would be cool to run the script on a new property and run cashflow assumptions, pull info like a link to zillow, link to hennpin or Minneapolis day by PID, etc. 

You might be able to use Flow or something similar as well to trigger the script automatically. I think its cool. Now is it useful? 

I don't know that enough hits the MFH daily in Minneapolis that you can't just look at them and identify if it fits your criteria right away. So, it would really be a cost benefit of how long it would take you to automate this vs how often you are actually doing this. 

You might be able to do some other things though like using the API to better run the cashflow on FSBO multi family properties. Again though, that is a feed. You could also maybe do your own heatmap around cashflow by taking the predicted cashflow and mapping it via google maps so you know when a property hits the market in a vary attractive neighborhood.

Very interesting topic thanks for bringing it up. Also good look finding your first deal! I house hacked a fourplex 4 years ago and have purchased 3 more since then with no plans to stop. I work in IT as well so I am glad there are others that are interested in automation as well. 

Thanks,

Kevin

@Malcolm Darensbourg What I might consider doing is creating a word document or a google document and using the automated table of contents feature to create a business or process manual. @Daniel Hyman mentioned that above as well.

As you are teaching you can have your son create the documentation for you and have you approve it. That will certainly give you new ideas and also has the benefit of having him learn it twice. Once when you tell him/show him, and then you get to check that he understood it when he has to write it down and get you to approve his understanding of that system. 

Once you have it written down then it also gives you the opportunity to think strategically about your processes and maybe compare them to other's processes via bigger pockets or books. For instance how you collect rent. If your system is to drive around, or have tenants mail them in than that might not be as scale-able as you would like. That is where tools come into play. 

There are lots of softwares and services available for landlords now.  You can purchase a software or service that does one thing, or software that does more than one thing and has the benefit across multiple processes. So you could buy an online payment solution, or a property management solution like Buildium. 

I bought Buildium pretty early on as I knew that I wanted to make a business out of this in the long run. I only have 11 units but I am starting to build out systems that are scaleable long term. I wanted to create some efficiency and save time by collecting rent online, having access to tenant contact info centralized, run background screens myself, etc. 

@Kuba F. makes a great point about outsourcing, and documentation/systems making that easier. You don't want to be spending time doing $10/hour work. If you yourself have to do it then you have a job and not a business. 

Thanks for starting this thread. Its great to read about what others are doing as well.  

Is that one in Robbinsdale section 8 rented?

I think Filipe hits it on the head. Turn Key in good areas are few and far between. If you invest outside of A/B neighborhoods, or if you can fix something or add value in another way there are still deals out there. 

@Shawn Ward tip is good. With how hot are market is anything that sits on the MLS for any length of time is overpriced and maybe after a couple months there is wiggle room.

Good Discussion!

@Jordan Moorhead What is the best one of you have gotten lately? If you are going to ask, I think you should share. 

I don't think plenty and patience jive. If there were plenty then you wouldn't need to be patient. There are deals that come up from time to time depending on where you want to invest, and what your return criteria are. I don't see much on the MLS that is 1% in the areas that I target or think my clients should target. The two I bought so far this year were both off market.

What deals do you think are currently good deals on the MLS? Some deal analysis might be fun.

@John Woodrich. The zoning is covered for the ADU ordinace the city passed a couple years ago. That gives owner occupants a specific advantage that his family could take advantage of. You don't need the planning commission and all the other hoopla that your average non owner occupying investor would need to go through. If that is a long term family home that he plans to occupy then he has that option. 

I agree with you that the configuration, layout, price, etc. might limit what he is able to do. If it was me, and I had a detached garage facing an alley, I would be looking into this personally. 

I am hopeful the city council examines the ADU ordinace and opens it up to non owner occupants. They talk all the time about affordable housing. You can make housing more affordable by increasing the supply of rental units available in Minneapolis.

@Sean O'Brien an interesting strategy for you might be leveraging an additional dwelling unit. If the house you are going to be moving to has a detached garage you could build out an additional unit on top of it and have your 2nd rental unit nearly immediately at a much lower price point while adding value to your family home. 

I agree with what many others have said. Buy in great areas, network with people that have done it, be ready to jump on a deal when you see one, and lastly don't have analysis paralysis. 

@Jessica Wood I know that I personally can use the income generated by the properties because I have been a landlord for a several years now. It sounds like you have as well so I wouldn't see why not. 

Another way of saying "spreading yourself to thin" is "putting all your eggs in one basket". If you are cashflowing $800 from one property right now but have a bad tenant, repairs, etc. you don't have any incoming cash. That is a danger of SFH vs MFH and the risk increases if you only have one SFH. If cash flow is your game shouldn't you be looking at multi family vs single family?

Can you share some numbers on your Edina investment? Rent, Cash Flow, etc. Maybe I am WAY off on SFH returns. Unless you are absolutely crushing it as far as rent it seems odd if cash flow is the goal.

Cash on cash return assuming $800/MO and $200,000 purchase is 4.8%. You can buy bonds instead and generate nearly the same return.

Here is a BP article referencing leverage.

One nice thing about having a large portion of equity in a property would be getting a line of credit against the property to use as another source of cash. I have used Community Resource Bank for that in the past and my contact there is Sam Ringstad <samr @community-resourcebank.com>. Just remove the space between the r and the @. 

Hey @Jessica Wood

Welcome! I am curious why you are putting so much cash down? One of the great pieces of real estate is the ability to leverage your money.  I would like to hear more about what your though process is on that. To me I would like to secure as many assets, for as little cash as possible right now why interest rates are so low.

A $300,000 Single Family Home at 50% down is a mortgage of $738 a month. A $300,000 Single Family Home with 25% down is a mortgage of $1107 a month. That is a $369 dollar difference in cash flow, but you also have two properties now instead of one. I don't own any Single Family Home Rentals so I am not sure what to expect in cash flow, but if property 2 is cash flowing a little bit that helps reduce the $369 difference. 

I look forward to hearing more about your strategy about putting so much cash down, and also why you are leaving cash in your first Edina property instead of leveraging that as well.