Saint Paul, MN · Member since 2014 · 3 posts · 0 votes
Hello everyone!
My name is Tyler Jaros and I am a senior at the University of St. Thomas in St. Paul, Minnesota. I am studying Accounting and plan on going into public accounting after graduation.
Over the past few months, I have become interested in Real Estate Investing. Ideally, I would like to start in rentals. My first major goal is to buy a duplex in the Twin Cities within the next year. I would like to live in one side and rent the other side out to start. Is this a solid way to start as a first property investment?
I look forward to some responses and would love to connect with as many people in Minnesota to build relationships with and learn from. Feel free to contact me at anytime!
Welcome! I am new on here but am from the SW suburbs of Minneapolis. You have a good plan to start. Duplexes can be hard to come by so your next best option might be buying a single family home to rent out. Just don't dump all your first load of cash into your first permanent residence. Get the cash flow machine working first while you live at home or with roommates.
Buying a duplex, living in one side and renting out the other, is a great way to start your investing. Try to find an area that is up and coming as it will be more affordable and get you some appreciation too. Maybe find a place that needs a little bit of work and fix it up over time, thereby forcing the equity. Good luck!
I live in Richfield, but bought my firs duplex in south Minneapolis. I first tried a SFH in Richfield but the city rules were very inconvenient to follow, like having to put 25% of the repair costs in escrow and the lack of services.
I also looked at some SFH's in North Minneapolis bit as everyone around here knows that is a very undesirable place to live.
So I ended up finding a beautiful duplex in South Minneapolis that is cash flowing me around $400. Although the taxes are higher then richfield the free services make up for it. Good luck.
I am a 2010 graduate from Saint John's University, purchased my first rental property in 2011 once I had enough money for the downpayment. It is a duplex in Uptown, Minneapolis, where I lived for 2 years.
I am now up to 3 Duplexes and 1 Quad. IMO, you have a competitive advantage if you get going sooner than later-- building your brand as the 'property guy' with your network, who will more than likely remain in the TC will set you up with a sustainable potential tenant base after graduation.
Happy to be of counsel, feel free to ping me with any questions!
I am a 2010 graduate from Saint John's University, purchased my first rental property in 2011 once I had enough money for the downpayment. It is a duplex in Uptown, Minneapolis, where I lived for 2 years.
I am now up to 3 Duplexes and 1 Quad. IMO, you have a competitive advantage if you get going sooner than later-- building your brand as the 'property guy' with your network, who will more than likely remain in the TC will set you up with a sustainable potential tenant base after graduation.
@Tom Henderson Did you have trouble finding property in the Uptown area at a reasonable price? Also, originally did you have a real estate agent looking for properties for you?
Unfortunately, pickings are slim in that market today. My advice-- look around Hiawatha if you like South Minneapolis, that or Nokomis. Or, you can still keep looking in Uptown-- just look for that great location, but disgusting property you can fix up. You'll have first right to buy as an owner occupier.
I am an investor who lives in the Twin Cities. I invest in Southern Minnesota. I see you are getting a lot of advice. The best so far has been from @John Van Uytven . I want to follow up with a suggestion that you read J Scott's book on Flipping Houses. I don't flip houses, yet, but I learned from J Scott (he is on BP, BTW) that I needed to find my 'backyard'. In other words, find an area, ideally within 100 miles of your home, where you can really learn the area, and know x, y, and z in detail about it.
Also, I found Kiyosaki's book, 'Rich Dad/Poor Dad' to be very helpful. Listen to the podcasts by Josh and Brandon. You will hear regret in each of their voices, the same regret we all have, because in this business, you make mistakes. The best solution is to read and learn, but finally to act. I suggest a business plan. My wife and I had a plan this year to acquire house #2 and #3, and then be done for the year. We close on house #3 this month. Others have tried to talk us into other possibilities, but we've said, 'Nope'....sticking to the business plan.
This is also a capital intensive business. In order to get a mortgage, even an FHA, you need your cash downpayment, a good job, and good credit. A dilapidated duplex will need work, and in the Twin Cities, plumbers, electricians, and the like aren't cheap, if you can get them to come out at all. The bank may give you money for the repairs, but may not as well, and you'll need cash on hand to handle repairs. You also need to know the code for the city you are investing in. Others have said they got in a year out of college, but your situation financially could be greatly different. The market in 2011 was highly favorable for investors...quite a different story now.
Mark Cuban, not exactly a dim wit, says you should pay off student loans and credit cards first, before investing. That is sound advice. Tyler, you haven't really given us your financial picture, nor should you. But your financial picture is a key player in how much, and when you should invest in real estate.
@David Moore Thank you very much for the sound advice!
I constantly refer back to Rich Dad Poor Dad for information and will be sure to J Scott's book to the reading list I have.
I understand that capital is one of the harder parts of starting in the business and believe that will be the biggest challenge for me in college. I am meeting with a Mortgage Loan Originator informally in a few days to discuss possibilities for me based on my financial situation. Is there any specific questions I should ask him or some great information I need to pull away from this meeting?
That is a really good first step. I would advise you lay out your business objectives. Lay out your finances, and what you want to do in the business. For instance, say you are aiming for (a) making $200.00 net cash flow per door, (b) Investing with sweat equity because you are good at x,y,z and can save money by not using contractors to fix your homes (legally, of course). Communicate to the lender that you know what you are talking about. Know your backyard. Know the city ordinances, what other properties rent for, and why you are a good investment for the MLO. Competence is big.
Another good idea is to come to the next Minnesota Reia meeting. Avoid signing up for the $$$ seminars. That is chaff. But you will meet other investors with a lot of experience. I was at the money game one night and met another investor who had a great community bank lead in the Twin Cities. Of course, I lost the number (doh!). I now have a private lender, and a good wholesaler contact. You will hear some incredibly bad deals that other investors want to offload, but some are really good opportunities.
Personally, I pray over every transaction as well. Some may laugh, but I seek the Lord's guidance on my deals. He doesn't offer bad advice.
You mentioned that capital is always difficult to come upon when starting a business or buying real estate. The only way I know how to get capital is to work your butt off, live on nothing and save, save, save. Works everytime. Good luck!