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All Forum Posts by: Paul Erickson

Paul Erickson has started 2 posts and replied 20 times.

Post: Need advice in a tough market-no buyers

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

Julie, I believe the property you have listed is over priced by about 10k,-15k to attract buyers. Based on the MLS listing, you could also focus more on the community,, sell the dream. I would also reach out to local businesses to see if they have any use for this property. Lifetime may need something in the area for their traveling executives, new hires, etc.

I don't know if MTR is the right option here, but it would be worth looking into for your client's sake.

I don't think waiting until spring makes sense for your client, I would look at the carrying costs and do a price reduction.. 

Post: Financing for resort

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

You may want to find someone that has the money available already and possibly the resources to pull this off.  how long are you going to carry the burden while you build out the "resort"

what amenities, marketing, management will you be looking to implement? do you know your building costs? your potential occupancy rates, rental rates (peak and off Peak) etc.
could you sell your current cabin, build a caretaker's quarters and somehow get a residential mortgage loan as owner occupied real estate?

does modular construction or tiny home construction help speed up the process? 
are utilities available, etc....

You may be WAY past these steps, in which the funding question you are asking is spot on, but I caution you to make sure you are doing your due diligence to make sure the price you pay (up front cost, financing, excavating, renovation etc. all are worth the outcome.

Let me know if you have any questions, I would love to help

Post: Best courses to get the MN Realtor License

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

I have taken courses through a couple of providers here in the twin cities whether for continuing education or licensure. I had the best experience with Minnesota Realty School. Their content is much less dry, they do a better job of explaining the purpose behind rules and regulations, which I think is very important.   All of the instructors I had were great and Mike Brennan the owner and head instructor is super active in the industry on the regulatory side of things. I would recommend them over any of their competitors from my experience.

Post: Pulling Equity out for a down payment

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

I would also look into down payment resources. 

it is feasible that it your situation if you were willing to move into the MF property for the first few years you could get tens of thousands of dollars in down payment assistance to make the deal work. And you likely could hang on to your primary residence and rent it out at the same time for even larger growth.  

give me a call if you want help with figuring out creative ways to get this together.  The twin cities can be tough, but flexibility usually wins out in the end

Post: Available Funds with 2 year investment property HELOC

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

Here in Minnesota, we tend to not have a lot of great Cash flowing properties come up on the open market due to high demand and lagging rental rates.  The best way to "make things work" in my opinion is to search for properties off market, find yourself a good investor friendly realtor that goes above and beyond.  Someone willing to drive for dollars, cold call homeowners that have the right amount of equity to make a deal work based on the typical loan rates at the time of the last closing, or can get deals in front of you due to foreclosure, probate, etc. 

You may also look into new construction in your area as building to meet a specific need may be the most profitable venture if you can find a niche that works for you.

Post: Looking for a Management Company in RedWood County in Minnesota.

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15
Quote from @Ashley Herring:

Looking for a management company in Milroy, Minnesota (RedWood County). It's for the management of a 4plex. Thanks!

Ashley, this is not far from my home town.
I still have some great contacts in the area. Give me a call or ahoot me a message to give me more info and I can get you in touch with someone who matches your needs.

Post: Minneapolis House Hack

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

I am so glad to see you starting at the perfect age.  

I recommend doing one thing first. Understand your income as a business owner, make sure you are structured correctly as a business to minimize your tax burden. Understand that one of the best investment vehicles is a roth IRA, so don't forget to contribute to your retirement especially at your age. (FYI, You can use your IRA's to invest in real estate or other alternative assets and not just wall street products) if you have good cash flow in your business and no credit, don't forget that there are non traditional lenders that will look at your income and assess your risk, so you may not need to pass on an amazing deal because of your credit score.

be safe in your house hacking endeavors, find a good Tennant, protect yourself with good contracts.  Let me know if you need more in depth info on these topics, I love helping people whenever possible

Paul Erickson- Realtor @Realty Group LLC

Post: Apple Valley has essentially banned STR - Should we fight it?

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

Hey BP!!! I do not personally own any STR properties in Apple Valley and lucky for me, none of my clients do either. The STR Market in Apple Valley is not your typical STR market, as this is just an average suburban community with no major tourist appeal. we have a smattering of lakes that could potentially be a vacation draw, however none of the lakes are typically considered recreational lakes. This being known, there are still a few people who have successfully run STR businesses in the area catering to a different customer base. Most short term rentals in Apple Valley are catering to people visiting the area for family or life events that hotel stays just aren't ideal. A family member in the hospital? a grandparent passes away? your cousin getting married? all of these events bring families together geographically and these STR's in Apple Valley allow larger families to congregate, celebrate, break bread together sharing a private yet common space unlike what is available at your typical hotels. With this particular customer base, you tend to get fewer "parties," rowdy tenants, and generally neighbor disturbing activities. Apple Valley however seemed to have a knee jerk reaction to a few neighbors of one particular STR having their own personal vendetta against either the landlord or the idea of STRs in their neighborhood and voted 4 to 1 to change the local ordinances. this resulted any rental of less than 30 days being illegal in apple valley. Apple valley has never had any ordinance preventing STR, however claimed that it was always illegal, and that they were just updating the ordinances to make this fact evident. I don't believe this to be true, as the only provision that could possibly deem STR illegal was that commercial use of a residential property was prohibited, however based on MN Statute, Short term rental is not considered a commercial activity and STR properties are considered residential properties (this is statute change in the past few years).
Do you think that the city should have the ability to rewrite an ordinance "in an effort to clarify an existing rule" even though by the letter of the law, there was previously no provision?
I know this seems like a rant (and it likely is) but I am interested in leveraging all resources at my disposal as a Realtor and as a member of the Apple Valley Community and attempt to fight to overturn the vote to change these ordinances. 

It seems to me that there are likely some negative things about STR that Apple Valley likely will want to prevent, but banning STR in general instead of regulating it, or enacting new ordinances with public support to protect our cities seems like a blatant overreach of government.
if you want to get involved to help me make a positive change in the Real Estate investment community in the south metro (or the entire state) please feel free to add your comments below and reach out to me directly with any recommendations of additional resources I may be able to pull from to help me get this done!


Also, if you disagree with me and think that STRs should be illegal in a community like Apple Valley, please provide that constructive feedback to me and let me know your stance on this topic.  

Post: Financing Tiny homes/cabins

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

There are plenty of banks or individuals out there that would be interested in providing a loan for such an investment, my experience however is that without a well written plan with supporting information, you will struggle finding someone to say yes, it isn't always about experience, but about how you are able to convey your plan to them. Look into business lenders instead of mortgage lenders, additionally, you may want to consider making this deal as an LLC and fund it from your retirement (Self directing it) if you feel strongly about your ability to succeed) this may allow you to come up with a down-payment that you may not have otherwise been able to. If you already own the land, this wouldn't be possible. And if you are looking to use the money to replace income today and not in retirement, this strategy likely isn't for you. But there is a lot to consider and I would love to help you work through it, the BP community is great for this

Post: Buying Turnkey/furnished STR vs creating one from the ground up

Paul Erickson
Pro Member
Posted
  • Realtor
  • St Paul, MN
  • Posts 20
  • Votes 15

Depending on the market you are looking to get into, there may ne some great turnkey options however I have seen much better results from buying Single family homes not marketed as STR and then setting then up. The home itself isn't what makes a STR profitable. It is the marketing, pricing strategy, the ability to over deliver to your customers, capture positive reviews, prevent negative feedback, etc. So trying to take over an existing VRBO or AirBNB property could have results different than what you may expect, as your strategies and effort may differ from the previous owner/investor