All Forum Posts by: Tylor K.

Thank you all for the advice.

Bill - I had not even thought to ask any questions about future management since I was more concerned with the immediate impact of construction / potential to sell but those are some good questions I will be sure to include. I'm not sure where all of the money is coming from specifically, but a local non-profit is running the project.

George - you are spot on with the parking, etc. Prelim plans call for 1 spot per apartment (including 3BR places) with a mix of underground and some surface spots. The materials specifically reference street parking to accomodate overflow but I think the parking could be a big problem. The city person I talked to initially said there will be a meeting at some point to approve all of the zoning variances but I am not sure what exactly those variances are yet.

The published long-range plan for the neighborhood calls for eventual replacement of the entire neighborhood I believe, but this is the first action I have seen and the plan is at least 4-5 years old.

Sorry for the delayed response - for some reason my alerts weren't working that there was additional replies.

Unfortunately this is not going to be a high-end apartment. It will be low/moderate income units renting for $600 - $900 per month for 1-3 BR. I'm thinking that selling to the developer might be the best outcome if that is something they would consider as neither selling during construction nor living next to construction seem like great options.

I set a meeting with the developer - does anyone have experience with what approach might be best for bringing this up? Would it be better to raise a number of the potential issues with the development that would impact me first? Does anyone have experience owning land near a proposed development in terms of what amount of leverage might be available through public input on redevelopment?

Thanks for the responses and in advance for any other thoughts that BP folks may want to contribute.

Hi All,

I have some questions related to a situation I am facing and I am hoping BP members might have some insight and experience they can share.

The background is this: I owner occupy a 1950's duplex in a suburb of MPLS. It's a pretty good rental rent on the occupied side = PITI at slightly below market rent. The street is about 10 duplexes on each side and then sfh. There has been a large investment by local agencies in the last three years to buy adjoining land for a park expansion and some significant commercial redevlopment planned within half a mile (including mass transit) within the next several years. The situation is that I recently received a notice that a developer has proposed to demolish all of the duplexes on my side of the street from the connecting road to my neighbor duplex (6 or 7 duplexes, leaving mine as the first on my side). The new building would be a mid-rise 51 unit apartment. There is a public comment meeting next week I am planning to attend to get more information.

My questions are these:

Does anyone have experience with owning property in an area that is being redevloped? What are some of the things that could make this a pro or a con for my property that I should be looking out for? There is quite a bit of activity lately with storefronts and restuarants being built very nearby in the opposite direction of the new park already.

What type of questions should I be asking at the hearing? I am obviously concerned about the impact the proposed construction might have given it would be right next to the home where I currently live.

Is there anything I should be doing proavtively to maximize my benefit from the situation? Or to mimize my risk?

My thoughts so far are to attend the meeting to get more information and then decide pretty quickly if this seems like a situation where I have more risk/downside (sell the place soon) or potential upside (keep the place and do anything prudent to be in a position to capitalize on the upside). I am thinking that the disruption of construciton is a given downside but am unclear whether this might be accretive to the value of my home or impact it negatively in the mid-long term.

Thanks in advance for any advice or insight that you can share.

Tylor

Whether you define profit % as markup over total cost (most investors) or operating margin relative to revenue (most conventional sales businesses) gets to significantly different answers in this case

I graduated in 2009 and bought a duplex with an FHA loan in early 2010. Being a LL is definitely a learning experience and not for the fiant of heart, but I would definitely recommend that approach.

The IRR function actually requires an initial outlay (negative number) and is more useful when looking at rate of return on a specific invested amount (or amounts). Since you are looking to sell this payment stream, you could use that function to back into a purchase price if you know what the discount rate (IRR) of the cash flows should be. Otherwise, you can just use the NPV function (though this assumes payments are made at the end of each year, so if the payments are made throughout the year this is an oversimplification) to come up with a range of reasonable values. Your biggest issue and area of sensitivity in terms of NPV is going to be the discount rate you apply, which needs to factor in inflation/realistic risk free alternatives for your buyer to invest their money, riskiness of the payments (e.g., is the deal cancellable? are the amounts variable? could the company fail?), and any other situation specific factors.

The biggest thing you need to consider is that over a 15 year period, minor changes in your assumed DR can greatly affect your concluded NPV, especially if your payments are weighted toward later years. If you need any guidance on setting up a simple spreadsheet that will help you model out your specific fact pattern, just PM me and I am happy to help out.

Had the worst waterfowl season I have ever been through by far, but I did manage to kill an 8 pointer with the rifle this year and we still have a month to hunt birds here in MN.

The ridiculous cold is your best friend when you hunt public land - keep sthe crowds home :-)

I have only been in this situation for a couple of months now, but I own a duplex and live next door to my renters and though there has not been a great need since I did a lot of work on the rental before listing it, the few maintenance items (e.g., replacing a beeping smoke detector, fixing a broken window lock, etc.) that have come up I have generally done within a day of being informed. Not sure how this compares to 'average', but it is definitely a lot faster response then we ever got from our LL in college (though that is also a college rental).

Thanks for all the input - we are going to try and see the place this weekend I think.

Brian - do you mean legally or because the seller is going to have to pay the agent's commission anyway because it is on the MLS or other? Just want to make sure we do everything above board and legit and I was planning on calling the owner tomorrow but can try the listing agent instead if that is what we need to do to see it? Or do we need our own agent (we have one to use if we need to)? Thanks

So i guess I didn't pro-rate exaclty right (copied my old landlord). Rent is $1100 and the lease starts on 4/10, so I collected 1100x (20/30 days) = 733 and the full rent for next month is due on the 1st. I can see how your way is better though because then you are getting more up-front (all about minimizing the risk).

Thanks again for all the input Jon, there is a lot more to this business than what you see on the surface and I am pumped to be getting involved and have this site as a resource/sounding board.