All Forum Posts by: Ray Mulli

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

Hello All, 

We are meeting up again to talk about real estate and hopefully make some deals together. I'll have a very unique sign that says "BP Meet Up" on our table. All are welcome. 

Last meet up we learned a great deal about SFH and connecting buyers with sellers from @Ray Mulli and his business partner. Also a lot of really creative financing ideas and how to leverage making a higher offer to work in your favor. It was some great real world advice for buying real estate I had never heard before - and I've listened to hundreds of the BP podcasts. 

@Andrew Agosto spoke on some very interesting rehab investment projects. His engineering background and advice could help some new investors get over the fear of some minor structural issues in possible properties. 

I told of a deal gone sideways where the seller filled a vacant unit of a duplex after we had signed out purchase agreement and the carnage that followed. 

Anyways, I don't think an itinerary is really needed as the topics and conversations just organically came out last time. But here are some ideas I like if anybody would like to attend and contribute: 

How to find deals in a hot market. 

How to land a deal with OPM (other people's money)

How to find the best neighborhoods for rentals in the metro

What is the first step to become an investor? 

If you can speak to those or any other real estate topics we would love for you to come and hear your story. 

I'm looking forward to seeing you all!

~Davis~

With my lease expiring soon (house with 2 roommates), I am looking to purchase a home with total cost of debt, tax, expected maintenance, and insurance less than my current rent payments (or within $100, so essentially less than $1100). Given the mortgage interest rate I have been approved for, this puts my target price around $250,000 (there are several candidates in the Minneapolis, MN area). However, I'm not doing this to break even; I'm seeking homes with 4 beds 2 baths, not all beds on the same level, and I would plan to rent 2 beds and 1 bath to a roommate.

1.  Is it a realistic expectation that I will be able to find roommates for this type of arrangement (I would plan to used some of the site linked here, and others, for marketing, while paying if needed: https://smartasset.com/mortgage/top-9-best-roommate-finders)?

2.  Could I expect around 50% of the whole home rental value from such a tenant (if not, what approximate %)?

3.  Are there specific neighborhoods (or type of neighborhoods) I should target to attract a tenant that would be amenable to this arrangement?

4.  To what extent should I give preference to higher income, high % or renters, younger average age, and higher % with college degrees neighborhoods, or their counterparts (I use http://www.mncompass.org/profi... for my demographic data)?

If it matters, I'm 28 single vanilla white guy, I have more than enough saved for 20% down, and I have no debt. I don't plan on needing to move for work in at least the next 3.5 years, and even then can ride out the market in Minneapolis if necessary. Someone please let me know if what I am contemplating sounds really stupid? Forgive my ignorance, I've never purchased real estate before.

Thank you in advance to anyone who is willing to offer some feedback.

@Tyler Smith - welcome to BP! We host meetups in Minneapolis, but they have been on Zoom lately. Shoot me a PM and I'll send the link. I do some medical housing here in St. Paul, would love to talk about opportunities near Mayo. 

An applicant contacted me on marketplace and asked me "So use discrimate against ex ex felons". They asked to come see the place and I said, as long as you meet the requirements we can move forward. They then proceeded to ask me that. The initial requirements are a favorable credit score, income 3 x the rent, and the last two check stubs. I replied that the application would be reviewed fairly and accordingly. It did catch me off guard. I had never been asked that before.

@Ray Mulli I am researching options other than 1031 right now. I’d like to be able to hold the capital and not reinvest in real estate so soon - would like to wait for property values to drop. From what I understand the 1031 window timeframe wouldn’t really allow for that necessarily.

Looking for a CPA in Minneapolis, MN that could provide recommendations on how to beat protect income from the sale of my primary residence.