All Forum Posts by: Susan Gillespie

@Johnny Peterson I spent many happy years in Northfield. Are you planning to invest there?

There's a monthly cash flow 101 game in Bloomington through MN REIA. It's the second Wed of every month, a small group of people and variety of investor experience levels. You can find it through the MNREIA web site or email me if you have any troubles.

Type @ and the first few letters of a person's name to link. Watch for the name to pop up at the bottom and choose it. Sometimes it doesn't work.

Hi @Jeremy Rasmussen Did you find the MN REIA info? They meet next Tues, April 1. The topic is apartments and commercial properties. You can get a free pass at the web site. Maybe I'll see you there.

@Eric Dufault It's hard to say which loan type to choose, because you should look at the whole financing package in relation to your property purchase and goals. This includes money down, closing costs, interest rate, PMI (private mortgage insurance) and other lending terms or requirements.

We looked at using a VA loan several times (husband is veteran), and it was never as competitive as other loans we could get. The terms made it higher cost, but again, this goes back to your own goals and the property you're considering.

You have a big advantage as owner occupant. Are you working with a specific lender? You should find someone knowledgeable to help you navigate and compare loan options, as well as a realtor who can help you find a good buy for your money.

I agree with the others, I wouldn't buy points in this case. There's no benefit, unless you're there long enough to offset the upfront costs.

Make sure to save some cash for unexpected repairs or expenses.

Good luck with your search.

@Rhonda C.

I can’t run your numbers because I don’t see enough detail, but wonder why the property is priced below market?

I echo what others said about checking out the association, including rules and regulations, reserves, etc. Many associations are professionally managed and have documents, meeting minutes, etc. on their web site. These are the associations I most like dealing with.

Condo fees can go up, and assessments happen, but so can costs to maintain single family homes. I’ve seen the biggest annual condo increases happen due to new developments (starter fees, then jumps to reflect actual expenses) and after major storm damage (can’t control that one.) A well-managed association will plan ahead for new roofs, siding and other major expenses.

Talk to condo neighbors to get their opinions of the association and planned or pending projects.

What’s your rental competition? Condos are good for evaluating purchase, sale and rental prices/rates because there are similar ones to compare. Differentiators are condition and location within the community.

Turnkey condition can quickly become non-turnkey due to rental wear and tear.

One bath is not ideal, many renters won’t even consider it.

Confirm utilities; some won’t direct bill rentals. I have one like this.

Check city rental regulations for licensing, inspection or other requirements.

Don’t guess on insurance, call for a quote to avoid surprises.

My first residence was a condo and I wish I kept it as a rental. Due diligence on condos can be straightforward because there’s so much information available.

A newer property, close to home, good location, with minimal rehab – and assuming positive net cash flow – is a great way to cut your teeth. I hope it works out for you.

Susan

Hi @Darius Davis , I'll keep you in mind for photography. Your photos are amazing, wow.

I like your plan to owner occupy a duplex/multi. You have a big buying advantage as OO. I wish I had done that early on.

If you ever want to talk investment property evaluation, let me know. Also, consider attending a Minneapolis MN REIA meeting on the first Tues each month. You can get a guest pass and probably some good leads for your search.

Susan

Glad it worked out!

Welcome @Matthew Ward

You should consider attending the MN REIA meetings in Minneapolis to meet other investors. You can get two free visitor passes.

I think it's wise to own and live in a home before jumping into investing. You'll have a better idea of what to expect, from taxes to maintenance.

Have you considered a duplex? You'd have rental income and learn as you go.

You always need some cash or access to credit when buying and investing. Things will go wrong and you'll need to fix them.

@Marcus Johnson I'm curious about your heck of a deal? Was it in Richfield?

@Jason L.

What are you hoping to accomplish with this investment? Monthly cash flow of $130 is basically break even in my experience. If you have trouble finding a renter, or have unexpected expenses, you may have to subsidize out of pocket.

Other questions:

How long will you hold your rental?

Is it rented now?

What is your expectation for appreciation?

Are you confident that your property manager is a good one?

I’ve purchased a few turnkeys and they’re my worst performers. I also first invested out of state and personally think that approach comes with higher risk. As an out of state investor, you can do everything remotely, but you’ll have to trust your local contacts and it takes time to find and develop those relationships.

Your rents and expenses look reasonable, but I don’t know the market in terms of rental demand, taxes, home price trends, etc.

There might be an upside to your deal, but I don’t see one based on your numbers, unless you’re getting the property below market. As a turn key, that seems unlikely.

If I assume a 10 year hold, with 1% conservative price appreciation, you could see an internal rate of return at 10-11%, but low monthly net cash flow is still a concern.

Good luck with your search and feel free to let me know if you want to talk about long-distance investing.

@Mark Robinson You could try Adam Hardy, CPA at Jenson & Co in Maple Grove. He's a member of MNREIA and has some rentals. I haven't personally hired him, but am looking for someone new and look for CPAs who are also investors.

There's a CPA on this forum @Steven Hamilton who works with investors from all states (I think).

@Cindy Silkett

Thanks for the local tip, it's always nice to get a referral in the area.

Hi Robert -

There are good opportunities here, but competition heats up in the spring and supply has been limited. Do you have a specific neighborhood in mind? The local MN REIA meetings can be a good source for off market properties and I think you can get a web-only membership. Feel free to connect if you'd like to talk.