All Forum Posts by: Travis Sperr

@Amber Gonion and @Peter Rizzo  I hope you can both join. Please let me know if you have any questions. 

Our meet up page is here, this will give you an idea of our attendance and future events: 

https://www.meetup.com/Twin-cities-REI/

Twin Cities Investors - I am hosting this monthly meeting for @Sean Blomquist while he and his family enjoy some time on the beach...

Real estate books and seminars teach us that rental real estate is the best way to create additional “passive” income. Most active and prospective real estate investors have a rough sense of reasonable cap rates and rates of return for different types of properties. With this base of knowledge you can go the next step to what really matters - how many investment properties do I need to support my retirement goals? The answer might be fewer than you think!

This presentation will help you figure this out by looking at different property types, comparing and contrasting them as investments for your portfolio. Travis will share real deals that we have funded in the Twin Cities so that you can see how to structure your portfolio in preparation of sitting on the beach while the money rolls in.

We meet once a month to bring real estate investors together. The meeting is free and is based around networking. Have a property to sell, service to offer or just want to join the local real estate investor scene please join us at our next meeting.

Grumpy's - Downstairs - 6 pm

2801 Snelling Ave

Roseville, MN 55113

About the Presenter (me) - insert street cred here:

Travis graduated with bachelor's degree in Business Marketing from the University of Northern Colorado in 2007. He joined Pine Financial Group in 2009 as a Loan Officer and is now a speaker, teacher, and frequent contributor to Pine Financial Group's monthly newsletter. He has been instrumental to Pine's growth both in Colorado and in Minnesota. Travis was fortunate to grow up around construction and real estate while working for his father's construction business. He now owns and manages a portfolio of rental properties in the Denver-metro area valued at over $2.5M. His investing is currently focused on multi-unit new construction projects in the Denver area, having recently completing a $3.3M project. Participating in real estate investing everyday with more than 500 transactions as a hard money lender, landlord, agent and investor, Travis has found his true passion for the business.

Keywords: St. Paul, Minneapolis, Twin Cities, Minnesota, Awesomesauce

@Account Closed thank you for sharing the details. The biggest challenge I have which you confirmed with your numbers is that buying a nearly $500,000 asset to get $600 a month doesn't fit the returns I am seeking. I do see and agree that the maintenance should be very low for years, there probably is room for appreciation in that area with all of the new development happening, but often times the existing town homes value struggle because of the amount of new inventory coming on line.

I am pretty familiar with the Denver market - experiencing the same - raising rents I cant keep up with and property values that have boded well for net worth. I am still seeing properties that you can buy around $250k that could provide $600 monthly - but of course older properties that could have more maintenance. No wrong way to do it and a great time to clean up a rental portfolio.

Good Luck!

@Account Closed Just curious if you are willing to share what your purchase price, down payment and expected rents would be on a new construction town home would be to achieve that net? I ask because I have considered the same, but couldn't get there on a return that would fit.

I don't see a ton of change in my investing strategy in moving rates. When I was buying more heavily in 2010-12 - the typical rate on the refi of a BRRRR was 5.5% (I have a handful of mortgages at 5-5.5). I am closing on another rental this month and my rate is 5%, the deal would work at 5.5 or 6%. If a deal doesn't work because of a .5-1% rate change, it likely didn't work anyway. If inventory increases in some markets because an increase in rate, it would affect higher price points much more than the price points that rentals make the most sense ($250k and less). Also it is typical when rates increase that activity picks up because it gets people off the fence.

Last note specific to the BRRR strategy - assuming a 3 month hold from purchase to refi - how far could rates move in 90 days, in a rising rate environment? maybe a 1/2 point, the point being that you are not going to see such a large increase in that period of time that it is going to kill you.

your lease dictates when you can raise. Assuming the tenants are in a month to month, I would give a 30 or 60 notice depending on the amount of the increase and liklihood of them being able to stay under the new amount. 

If they are in a longer term lease I would let the tenants know that at the end of the lease the rent is going to be increased to $X, and give the formal notice again 30-60 days out. 

Go for market rents and consider negotiating if they can't go that high to avoid the cost of a turn over, but it is all math how much will a turnover cost vs the new rent amount. 

local banks have an appetite for these loans right now. Send me a message and  I can share a couple connections. 

@Jason Leach how much are you putting down? 

I would be willing to help - but you know you need a lawyer - taking advice from people on the internet is not a great business decision.

@Jeremy Chaser Numbers aside - looking only at what you listed as your concerns -

Sub metering water is actually the easiest item out of the concerns listed - I did this last year on a 3 unit property - the meters record the usage and send it out via an internet hot spot device. Accessing the lines could be challenging and could include some drywall repairs. 

The heat is the biggest concern to me here - electric (assuming baseboard) heat is the most efficient cost for you, that is going to create some hefty electric bills that will either require you to lower rents so that it is in market price/amenities or turn over could reflect the cost to heat. 

Also curious if this is zoned 4 units - the amount of government oversight in the Twin Cities and strict rent regulations, I am surprised it is ok to have 1 furnace.

Hope that helps.