All Forum Posts by: Tim Swierczek

Hey all,

I have been trying for a couple of months to figure this out on my own and would like some input please. This is the situation.

I am being gifted my mothers house which is paid off. I’d like to move her closer to me as the house is located in Wisconsin and I live in Minnesota. I’d like to do the following:

- Take the 220k paid for house and take out a mortgage of 150, getting a rental agreement for it also which would likely be about $1400 a month 

- Use 100k to pay down almost all of my current debt and reduce my DTI (besides mortgages)

- Use the 50k left over from the mortgage to put down 20-25k on a house close to me for my mother to live in (200k house or so) which I would then own and let her live in for nearly nothing until she passes (not in near future). 

Is this possible to do? Household income is about 200k and after the first step listed above we would have a 350k current mortgage (450k house) for our primary residence, 150k on the 2 rentals and a 60k student loan if this is at all possible. It appears the DTI should be okay from what I can tell but would any lender approve something like this? If so who do I start with? Any lenders I should try? It's hard to figure it out but I think it is worthwhile to try to end up with 2 properties if possible. I think doing it this way gets rid of a lot of possible tax issues too. Hopefully I've made it clear enough and I so greatly appreciate any help?

Minneapolis has loosend it's zoning laws for the purpose of population density and to supply more housing and one of those ideas is to allow attached, remodeling basements and attics and detached ADU's. I've been working deligently with a architect drawer and a landscape designer and have submitted dimensions and site layout drawings, floor plans, along with a permit to build and a permit to build an ADU in the back of my property following all of their setback and distance to primary home, which is a duplex with two units and has been rented since 2014. The city allows a footprint of no larger then 676 Sq feet and some height restrictions. My design is a two story, 1296 square foot, two bedroom, 1 bath and a single garage stall backing up to an Alley, with room for parking. Getting through the red tape has been interesting, but I'm learning. My conservative estimates have me building this ADU at 160k, rent in the area for a brand new, two bedroom, 1 bath with laundry, puts rents somewhere between $1,400 and $1,500 a month. The location is in South Minneapolis, where I've had a lot of luck renting my other tenants, a very desirable area. So, just waiting for the City to review my plans and hopefully it gets accepted.

Being that I've never built anything in my life, some of the questions I have is how to finance this being that it's another building on the same land as my duplex.   I owe $152,00 on this duplex that's worth anywhere between $300,000 and $350,000, so the cash flow has been great for me.   I valued added this building in many ways, by putting a door on the lower unit so that both units had access to the basement for laundry and locked storage.  I also remodeled the upper unit back in 2015.  Both value adds have allowed me to rent both for a total of $2,400 a month.  The current loan is on a 15 year @ 2.75%.   I spoke with my Credit Union and they have never financed anything like this before, so because I've been a member there for over 40 years, he assured me we could come up with something creative.  Does anyone else here have some ideas on how best to finance both of these properties that are on the same land?

Lastly, on the same Alley there is a house 3 doors down that built a similar structure on their land, so I went over to introduce myself and they showed me the Garage with an office unit above. Their structure isn't considered an ADU, because no one is living in it. They paid $54,000 for their structure. They gave me the builders name, so I plan on calling them to get an estimate on the cost to build my ADU. Does anyone else have advice on some good GC's in the Minneapolis area? I plan to build next year if everything goes well.

I apologize if this is in the wrong area, but I'm not sure where to post this. Another website said this might be a good place to do it. 

I have friend who is renting a house in Minnesota who is a wheelchair bound 100% disabled veteran with documented and on going mental health issues. She's actually suicidal most of the time. She is unable to work more than 10 hours a week .  

A couple of years ago while she was in the hospital she rented her house via email, no standard formal contract,  for 5 years at half the going rate to a current renter because of a sob story he gave her. She told him she wasn't even covering her expenses but felt bad for him. She has a big heart, but was delusional and didn't know what she was doing. She has since been subsidizing this guy for the last two years and now is going broke. I found out about it and helped her catch up on the payments so she wouldn't lose the house. The renter refuses to budge on the rent even though she has been helping him for two years. We offered the guy some money to move out, but he has it too good and refuses.  He is now trying extortion and is offering to buy the house for $100k less than it is worth. She has spent over $10,000 repair every item he said needs repairing but he wants more and it threatening her if she doesn't pay. He knows she is ill and is hoping she will just give up. 

She doesn't know what to do. We don't think any investor will buy the house with a renter who is paying less than half the going rate. and we can't sell it to an individual with him in it.  We are afraid of hiring an attorney because we are afraid they'll charge her a lot of money even if they think she won't win. I would help her pay for an attorney if they really thought they could do something. This immoral and wrong on any level. The poor girl served her country and is now in a bad place and some guy is willing to steal from her potentially at the cost of her life. 

Any advice on how we can sell this house to an investor, or an individual to get out of it without her going broke, would be helpful. Maybe someone knows the laws in Minnesota or can give us advice or a referral to someone who can help would be appreciated. 

Again, sorry if this is in the wrong place. We don't know where else to turn. 

Hello I recently got a new job in Minneapolis. I unfortunately have to move from Florida. I am having trouble finding a place and would like some assistance in finding something. Anyone in the Twin cities have any ideas for places I can rent or stay. 

@Tim Swierczek @Matt Humphrey @Bryon Andrews

Tim, Matt, and Bryon,

Are any of you familiar with the Austin, Minnesota area, regarding investment properties?  I see that homes and rents are on the lower end compared to the metro.  Is Austin, Minnesota a growing city? Is it easy to find renters in this area?

Thanks for any insight that you have.

I had to look to see when I joined BP. Turns out tomorrow will be 10 years, yeah me.

Anyway. My point was there has not been ONE year since I’ve joined that there wasn’t a crash coming that year. Not one. 

Click on the magnifying glass in the upper corner and type coming crash or the crash is coming or any such words. I don’t know if it’s recency bias, fear, dreaming or what. But pre-2008/9/10 depending on your market, NOBODY ever talked about a housing crash. Even though it happened in pockets of America through out the years. 

Maybe it’s similar to how the Great Depression affected people their entire lives? Several of us posted over and over again about how the doomsayers were literally costing strangers their entire financial future. If you’re a buy and hold landlord all you should care about is the income over, and the value in 10, 20 or 30 years. I dare one person to say they think houses will be cheaper in 20 or 30 years. 

in a sleepy neighbor of very slow appreciation outside Minneapolis my my mother’s house has gone from $25k to $400k in 40 years. It’s not a great neighborhood, it’s not near the city or great amenities, it’s just a place to live. Members who are young enough could easily see each of their $250k houses go to $4million.  It just doesn’t matter if it goes down 5-10% during that time. People still invest in stocks and they “crash” all the time, usually 5-10 years.