All Forum Posts by: Raj Gandhi

You asked for a creative solution... make a seller financed offer with minimal down payment (5%) and market rate interest (4%).  Structure the terms as interest-only for three years and then a balloon payment.

For three years, rent-out the property.  Because debt service is interest-only, your cash flow will be very good.  Confirm the numbers, but I think you'll easily recoup the 5% down payment.  

Hopefully the property will appreciate 5% per year for three years; if so, it will be worth $290k.  At that point, refi to a conventional mortgage.

If your market doesn't appreciate in three years then you essentially have the opportunity to give the property back to the seller and walk away.  

The point of this solution is to tie-up the property at a fixed price for a future real purchase.  Try to structure the down payment and balloon payment with respect to rent so that you're outlay (risk) is minimized.

A more savvy seller is going to ask for a larger down payment.

I'm interested in a BP meetup.  

Try searching "Minnesota REIA meetup". It seems like there are several groups that range from half-a-dozen to 30 attendances, monthly to almost weekly, >$100/year to free. None of their offerings were immediately compelling to me but I plan to go to one eventually.

There are real-time radon monitoring systems.  I'd suggest you install those in living areas in order to monitor your radon mitigation system(s).

Do your own research... but I believe radiation like that has a cumulative effect.  If they spend 95% in an area of safe radiation and only 5% of time in an out of spec area then you could calculate that their cumulative exposure would be acceptable.

If you make a good faith effort to keep cumulative exposures under limits and inform the tenants then I think you're operating ethically.  Hopefully that would result in no legal liability nor frivolous lawsuits.

Seems like a challenging but solvable problem.  Bake-in radon testing and abatement systems costs into your deal.

Minnesota property managers, you should have received 2015 Property Valuations and estimated 2015 taxes in the mail recently.  Per State of MN instructions on the certificate of rent paid (CRP) form, link on this page: 2013 CRP, you're supposed to mail tenants a copy of the valuation.

Of course in January you need to send tenants the CRP form so that they can file for a tax refund.

Note, I can't find explicit instructions / laws regarding 2014 / 2015 so I'm assuming it is the same as last year.  Someone correct me if I'm wrong.

Does it rub anyone else the wrong way that the tenants are eligible for a property tax refund when it is the landlord paying the property tax?  Does it rub anyone else the wrong way that state statute forces property managers to do these two tasks (forward property valuation & send CRP form).  They aren't difficult but it is one more piece of non-value added red tape.

You can get conventional financing for 1-4 unit properties.  That is, you can get a mortgage for those investment properties just like (very similarly) to your own home.  All my rentals are single dwellings but I'm in the market for up-to a 4-plex.

With 5 or more units, you'll need to pursue a commercial loan.  There might be some other loan possibilities but the terms will all be less favorable than conventional financing.

Start with what you know and something close.  College rentals have increase risk of tenant issues so I'd probably avoid that.

Ideally, I'd suggest starting with a simple duplex, owner occupy one half and rent-out the other.   If you have extra cash available then do a 4-plex instead.  Financing more than 4-units is complicated.

I agree with @Cal C. What's the rate of return on your investment properties, Shaun?  If you're making... 8% on your investment and your loans are costing 4% then don't pay-off your debt.  Keep replicating (borrow low, invest high) as much as you can. 

For my projects, we used The Home Depot or Ikea.  They're really just reselling.  About $45/sq ft is what I got for Ubatuba.  What's a good price?

My RE business is hobby-sized.  Financially, I give at a personal-level, not my hobby business.  I have certain skills useful to the community and so I volunteer (currently or recently):

• church running video 4x / month
• chaperone school field trips 3x / year
• mentor after-school engineering competition 2x / week
• curriculum advisory committee for school district, parent rep
• continuing ed committee for school district, parent rep
• youth soccer club president ("club" = $1M/yr budget)
• athletic association director

More specific to your point, I'm an engineer.  I can organize processes, do financial analysis and communicate.  Those skills are very useful for a soccer club where the volunteers or employees are predominantly "soccer people".  Athletes or coaches generally don't have the ability to coordinate thousands of registrations for youth soccer.  I've been volunteering for the soccer club for several years and recruited others like me to make it one of the best clubs in the region.

Sylvia, I've had the same questions and concerns you've had about stairs.  In most of my rentals, I've pulled-out all the carpeting and replaced it with wood laminate flooring.  That works great except for the stairs.  In my most recent rehab we used a product similar to those mentioned above.  They look fine but are essentially glued-on and subject to wear and tear.

In particular, there isn't a good solution for the top edge of the laminate flooring.  It isn't really a stair, the first stair is one step below.  Laminate flooring is supposed to float yet the top edge can't.  That implies that the top edge should go over the laminate to allow floating.  If that's the case then, when people walk over that portion, they will invariably step-on or kick that little rise.

The little rise has survived a few months so-far but I'm worried that it will break-off in a few years and after my flooring is no longer sold.

Good luck on your quest.  I'm considering installing old-school hardwood floors and stairs ($65/ stair) to improve the durability and cleanliness of rentals.