St Paul MN Rental Deal Opinions

1 Reply

Hi Folks!

Just getting starting out in real estate investing. Interested in buy and hold and rehab and hold. I am hoping to get some opinions from experienced investors, especially ones familiar with St Paul. I think I want to get 1-3 low-middle income properties with strong cash flow potential to get capital growing quickly.

I have a coworker who is moving out of state and will be looking to sell his duplex in Frogtown neighborhood. Based on my research Frogtown would traditionally be classified as a C- or D+ property, in the last 2-3 years some community and religious groups have been fighting to improve the area. Unless someone knows different it seems this work has transformed the community into a solidly C class area, still poor but gang activity is down.

The Deal:

Large 4/1 down 2/1 up duplex, around 3k sqft total built in 1909. Two different attics, one I believe could be turned into a studio. Was thinking a coin op laundry and maybe secure storage could be put in the other attic. The duplex is also sitting on a 1.5 or maybe double lot. I am fairly certain I could fit a single or double wide on the lot and turn the place into a 4plex (assuming St Paul will let me put one there..).

Purchase Price: 120k plus 3 percent seller paid closing costs

Current rents: 1250 for 1st floor, 775 for top floor. If I finish the attic I expect additional 500, additional 800-1000 if I can add another structure to the lot. Current tenants are primarily college students, I met a few of them and they seem ok.

I would pay for heat and water. Water is a good 100/month. The attics are not currently insulated so during the winter time the heating bill can hit 300-500/month. I would have to finish the attics before winter or insulate and throw away and finish down the road.

Place has some deferred maintenance, I could spend spend 2-3k on misc preventative things (flashing, 1 of three electrical panels is fuse panel, etc). Windows should be replaced in the next couple years. Roof is less then 8 years old.

What do you guys think?! Especially interested in the opinions of people familiar with St Paul and Frogtown etc.

@Byron Bohlsen

I recommend using one of the calculators provided here on BP, specifically the rental property analysis one. This will help you cover all of your bases when accounting for expenses and such. As non Pro members we only have limited access to those calculators so make sure this is something you really want to pursue before you go through and run the numbers.

Hope it works out for ya!

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