Buying my SFH and Need Some Help St Cloud MN

15 Replies

About to close on my first SFH rental property, I still have to get it inspected, and can back out if inspection shows something I didn't notice..

Few things about the house

3 bedroom 1 bath, (could convert spare room to bedroom if egress window is added) all original hard wood floors. 

Will need to replace downstairs carpet, and repaint some rooms inside the house. estimating that at $1,300--$2200 (800sq ft ) i'll do the painting. 

All brand new windows. early 2000's heating and air conditioning. roof is newer. nothing wrong with siding, or foundation. Has GFCI outlets. all new appliances in the kitchen. 

Located in St Cloud not to close to the university but if I can't find a family, I could grab students(if i had to get someone to rent it). 

Normal SFH rent around St. Cloud range from $850-$1200 I'm hoping to get $1,000

Tried running the number a few ways and they seem positive or break even the 1st year and then growth. 

(downside of St.Cloud is you have to pay $500 to convert house to rental property) 

Seller will pay 3% of closing. 

I plan on managing it myself since currently live in St. Cloud. 

Let me know what you think, or if I went to soft on the numbers, ( Repairs 5%, vacancy 9%, ) let me know if you have any rental units in St.Cloud and have problem.

Awesome to hear that you are close to owning your first SFR! I'm currently on the hunt each and every day for my first property.

What neighborhood in St. Cloud is it in?

I'm conservative with my numbers. I'd suggest increasing your Capex. $20 a month is only $240 pet year, which seems quite low to me.

A new water heater might cost $1000. It would take 4 years of Capex to cover that.

I'm not an expert on insurance, but $125 per month seems a bit high. I think you can get that down a little and shift the difference into Capex.

The cool thing is that you'll be self-managing, so that will save you some costs. I'd probably put all of the management costs you've allocated into Capex to build up reserves faster, if it was my property.

I hope you post more updates. It would be interesting to hear!

Hey @Patrick C. , I do a lot of research on the St Cloud market and have a duplex up near the hospital. Just a heads up, on top of the $500 conversion fee the city requires you to take the free rental course from the St Cloud police department prior to getting your license (they will not budge on this). The rental license (on top of your $500 conversion) is about $170 for your first unit.  

You may also want to consider the cost of water and sewer expenses as the city is unwilling to allow your renters to pay this directly to the city. I'm invoicing my renters directly for the cost and I think you should be sure to have this in your lease agreement. 

If you are planning on renting to college students the going rate is $325 per room, which would be $975 for your three bedroom.  Also, be very VERY wary of the downtown area and just north of downtown (near the homeless shelter on 9th ST N) as good renters will be hard to find in that area unless you are north of Veterans. 

Be sure to learn how to run background checks on potential tenants because your about to be hit with a broadside of worst St Cloud has to offer. I cannot stress how important running a pre-check on the potentials will be, I found one with felony meth and she was just out of prison, coke and a gun (from Wilmar), at least two who had fleeing and a mountain of DWI with no licenses. I'm not trying to scare you off, I'm willing to show you how to run these checks if you like. 

I'm including a map of areas where I'm hesitant to purchase. 

Yea i was planning on doing background checks, and if it has to sit empty for 2 months till i find a good renter i'd deal with waiting.. 

good to know they cant pay water/sewer expenses. 

I do plan on having them get electric in there name. 

Thanks for the map, the house i'm about to purchase is in the red boundary, close to south junior high school.

I do agree everything inside the map is lower income/problems. 

House is close by south junior high school, and university ave. not the best location, but st cloud has a lot worse. .. hard to find deals, and i've been outbid on cash buyers on several other offers. 

I know the property you are looking at because I looked at it as well. It’s a tempting price and location as the nearness to South High may attract a family with kids.

Ultimately I didn’t say no, my roommate for life dropped the veto on it because she didn’t like the area.

I was just outbid on a 45k property north of McDonalds on 22nd about a month ago. A real downer because that was the diamond in the rough. Oh well, chin up, many more crappy St. Cloud houses out there, haha.


@Lee Fahy  

i've been outbid on about 4 property this year. 

background checks cost about $35-$45 ? 

do you manage the property yourself or go through a company? I personally don't think it will be to bad managing it myself, since its only 1 property. some people have told me to go through renters warehouse. 

I use fidelis, they do a nice job for 25 and it includes a credit check.

I think you should manage the property yourself, if for nothing else the experience so you know what the managers have to go through.

Inspection turned out good. 

needs fresh paint on the inside, new carpet in the basement, and just a return air in one bedroom for the furnace. should be closing on it end of month. 

Originally posted by @Patrick C. :

Inspection turned out good. 

needs fresh paint on the inside, new carpet in the basement, and just a return air in one bedroom for the furnace. should be closing on it end of month. 

 Cool, good luck to you!