All Forum Posts by: Tim Swierczek

Reminder of tonight's Minneapolis Data Deep Dive

We have analyzed 445 2-4 unit transactions over the last 12 months in Minneapolis and will share our insights with you tonight. Adam will also show examples of successful multi-family purchases in the last 12 months. We start at 6 PM. Please RSVP on Meet-up so we have a head count.https://www.meetup.com/real-estate.../events/305782198/...

@Jesi Young I like the tone of your post. I can feel that you have embraced the move and change. if you want to meet some local investors there is a meet-up next Tuesday. it's posted in the classifieds. I can't post info about it here. It would be a good way to start networking. PM me if you want info.

In December, we analyzed St Paul by the neighborhood - price-to-rent ratios, appreciation, etc. Now it's time for Minneapolis!

We are in the process of analyzing just under 450 multifamily sales over the last 12 months in Minneapolis and at this meet-up, you will learn all of our insights and get a chance to ask questions. We will also provide some examples of cashflowing properties purchased in the last 12 months in Minneapolis.

This will be a classroom setting at BRIX Real Estate on West 7th St in Saint Paul. Adam Tafel and Tim Swierczek will be your presenters. Food and drink will be provided!

This meetup subject will have a podcast and spreadsheets to accompany it - if you haven't already, check out the show "Twin Cities Real Estate Investing" anywhere you find podcasts.

In the future, we plan to do Twin Cities surrounding suburbs and we will break that up into 2-4 areas depending on how the data and geography pan out.

@Hudson Filippi What part of Northern MN do you live in now? Typically when people graduate they look for a job and move to the area of the job. If you stay in Northern Minnesota you could look to locate closer to Duluth which has a large supply of duplexes at prices much below $500K. Otherwise, you could network with a local Realtor to your area and see how many duplexes sell per year within your acceptable driving radius. You may also be able to start sending letters to duplex owners explaining who you are and that you want to own and live in a duplex, etc.  If you're in Northern MN, there is a very good chance that the cost to build a new duplex exceeds the resale value, which would be an awful idea to build a new one.  Reach out if you want to chat.

@Brandon Larson I know an agent who lives, invests, and breaths N Minneapolis. Her name is Liz Loveless. She is not on BP. Look her up and mention me or if you PM I can get you her contact info.

@Tony Schmucker Now that you know all of those markets work from a Macro perspective you should look to see where you want to live for 2-3 years and what your and your wife's income will be in those markets. In other words if they are all acceptable places from an investing point of view, change your perspective and look at the other things they have to offer. 

I lived in St Paul for 19 years and now live in a suburb of St Paul for the last 6 years. It's objectively rated as a great place to live, but obviously you need to be ok with Winter. Figure out a way to narrow it down. You will always be able to find a place once you have a city.  If you do decide on MN, did a similar analysis as you a few months back in St Paul with rent-to-price ratios based on median price and median rents for each neighborhood in St Paul. HMU and I will share it with you.

 It's safest if you use NA or --- in fields that don't apply. In fields it applies you put the unit identifier. For example, if they are getting Storage unit A, you put A in the blank.  If there is no designation I would use an X as you stated.

Yes, you can add a JV partner after the contract. You can purchase using an LLC and then add a partner and the seller will never know or you can assign the contact to an LLC you control. If you are still a majority or controlling partner you will get no pushback. If you sell your full interest you may get push back but contracts in MN are assignable unless otherwise prohibited.

@Collin Luckett

The answer to your questions is nuanced. This is for basic informational purposes I am not an attorney and this is not legal advice.

First, if you offer to purchase a property using a HELOC to fund the purchase you cannot later back out of the agreement because you couldn't find PML or investors. Most sellers only care if you close so you can usually use another form of capital stack other than what is on the agreement, however, the seller can force you to use the originally agreed-upon payment method. This is rarely an issue provided you still perform.

The raising money part is more complex. It depends on what stake you offer in the property.  The cleanest route but the least attractive method for most investors is to have the investor provide debt. In that case, they have no ownership only lien rights.  The relationship is straightforward and you don't need to know much else legally. I would get an attorney or title company involved to create your loan documents to ensure they comply with the law and cover all the aspects you need.

Another method that is likely your best bet to take on investors is to create a joint venture (JV). Under this method each investor has ownership and voting rights. You will need an attorney to properly structure the partnership and you will make sure you do it correctly. If you start a JV in name but do not give your partners proper control and decision-making rights and the deal goes bad you open yourself up to serious consequences which can lead to SEC violations with extremely high fines.

Lastly, you can offer the project up to investors who have no voting or control.  In this case, they get equity but do not make decisions.  Check with an SEC attorney to learn where this line is drawn. If you choose this method you will need to learn SEC money-raising rules. The short version is that you must have a  Private Placement Memorandum (PPM) to show your investors and you must decide upfront if you will only accept accredited investors or if you will allow investment from non-accredited investors.  This is very important. If you allow non-accredited investors you cannot advertise, or post looking for investors. You need to really learn these laws if you want to start a partnership where you make the decisions.

I respect that thought, but Duluth to St Paul is more than two hours each way. That is not a management plan. You will need someone more local who is incentivized to be available to do showings and handle issues. Heirloom Properties has a good reputation with the people I know.