First real estate investment

[Michael Weidler]

Hello all,

I am completely new to real estate, other than the home my wife and I own. Still educating myself with podcasts, etc. Really need to get my feet wet and start with my first investment property. 

I am looking at properties in Minneapolis and came across this one: https://www.zillow.com/homedetails/4239-32nd-Ave-S-Minneapol...

My thoughts are, if I were to purchase this property, do a basic repairs to kitchen and baths, and advertise as a STR or as basic rental. I have enough liquid cash for the down payment and probably $20k of repairs. I am pretty handy myself and have done all the trim, painting, flooring, doors, and mudroom cabinets in my house so I could do some repairs myself as well.

Basically, what do you think of this property as a first investment.

[Jeff Schemmel]

@Michael Weidler getting your first property is huge, and sort of a trial by fire. It's all about learning your way to the strategy that suits your experience and interests. STR is getting oversaturated in MSP, and my first advice is definitely do not buy a property if the numbers only work with it being an STR. You can try it, but make sure it works as a LTR first because when that vacancy hits (especially this time of year), you'll feel it and you'll want a backup plan. 6 month least aren't bad, especially now.

Aside from that, this is a 1 bed home and on paper probably the least secure in terms of a long term hold.  They're very hard to sell in comparison to even a 2 bed, let a lone a standard 3 bedroom home.  If price is an object, I would consider something like househacking a small multi-family property for your first investment; understanding that may change your lifestyle and you may not want to sign up for that.  I think you should really consider resale value when you're investing, especially when you're counting on STR and reselling a 1 bedroom property.  I just wouldn't buy one.  

Small homes are fine for STR, but why not buy a 3-bed duplex?  Rent the 2-bed as a LTR to pay most of the expense, and then STR the 1 bed for a bit extra cash flow.  Make sure the utilities are split, and take care of the place.  

Hope this helps.