New Buy and Hold Investors- Minneapolis, MN

New Buy and Hold Investors- Minneapolis, MN

Rental Property Investor · Minneapolis, MN · Member since 2016 · 60 posts · 30 votes

Hey everyone! My wife and I are new investors currently living in the Twin Cities of Minneapolis and St. Paul, Minnesota. We're two newly-married young professionals who have only been interested in real estate for about 4 months, but are extremely intrigued by the ability to build sustainable wealth and have more control over our financial health.

We've been listening to BP podcasts and scouring the site and forums for all the information we can for a few months, but decided it was finally time to get engaged in the community, especially with the past week we've had. We just had an offer accepted on our first property- a duplex in the Longfellow neighborhood of South Minneapolis- on Tuesday and will be closing in mid-December!

We will house-hack (owner-occupy) this first property for some amount of time, but the long-term plan will be to rent out both units and move on. It needs some updates, so we're very excited to learn and try out some home improvement skills.

After we get this property to where we want it, our plan is to continue in the buy-and-hold space of small multi-families and SFHs, and are open to doing that both locally and in a non-local market.

We're excited to network with you all, learn, and hopefully even be a source of knowledge on the forums at some point in the future.

Also, if you have any tax adviser recommendations in the Twin Cities area, please send them our way!

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Lender · Minneapolis, MN · Member since 2016 · 30 posts · 34 votes
9y

@Joseph Lee Congratulations and best of luck!

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  • David BarnettPro Member
    Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
    9y

    @Joseph Lee Welcome to Bigger Pockets and congratulations on your getting your first house under contract.  Best of luck on the renovations after you close.  I currently own an investment condo in the Lake Calhoun/Uptown area.  I'd be happy to chat and network, if interested.

  • Investor · Minnetonka, MN · Member since 2016 · 123 posts · 86 votes
    9y

    @Joseph Lee Welcome to BP and a big congrats on your duplex purchase!

  • Lender · Minneapolis, MN · Member since 2016 · 30 posts · 34 votes
    9y

    @Joseph Lee Congratulations and best of luck!

  • Insurance Agent & Investor · Minneapolis, MN · Member since 2015 · 115 posts · 50 votes
    9y

    Welcome to the community. Feel free to reach out to me if I can ever be a resource for you!

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 60 posts · 30 votes
    9y

    Thanks, everyone!

    @David Barnett, I just checked out your profile- I'd be really interested in why you chose Mpls/St. Paul as your non-local market.

    @Brandon Hershey, thanks for the offer. We may reach out to see if you can help us out from an insurance perspective.

  • Real Estate Agent · Saint Louis Park, MN · Member since 2015 · 213 posts · 82 votes
    9y

    Welcome to the site @Joseph Lee! As you can see, there are just tons of great people in our neighborhood on BP. What a great place to learn, grow and build. Congrats on the offer accepted, and hope you have years and years of success and growth ahead! - Shane

  • Investor · Minneapolis, MN · Member since 2015 · 12 posts · 0 votes
    9y

    Welcome Joseph, for networking I would suggest checking out the Millenial investors group that meets Monthly. Its not a MNREIA event but its on their calendar along with tons of other good events. 

    Did you find a duplex that needs a lot of work or some specific value add? Did you find it MLS or other? I also have a duplex in Longfellow. I ask because the ones I have seen lately (including mine) have all been overpriced unless you can find some way to add value.

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 60 posts · 30 votes
    9y

    Hey @Blake S.-

    Thanks for the recommendation! Just took a second to look it up, and it looks like something we'd definitely be interested in.

    The duplex we'll be purchasing was on the MLS. It has quite a bit of room for value-adds, as it hasn't been updated in 30-40 years, but is in really good condition at the same time. It also has the potential to go from a 2/1 on each side to a 3/2 relatively easily. We didn't get a "steal" on it in it's current state, but if we estimated things correctly, we should get some good cash flow after we make those changes and bring the rent up to market.

    Have you found it relatively easy to fill your vacancies in that area? I know vacancy rates are low all over the metro, but we weren't particularly sure on what to specifically expect in Longfellow. 

  • Investor · Minneapolis, MN · Member since 2015 · 12 posts · 0 votes
    9y

    @Joseph Lee, that plan is exactly what I did :) Sounds like you have a good plan for success. Im up near east lake and was able to raise rents and fill my vacancy (after adding 3rd BR) fairly easily (+350). I have opted against the second bath so far as im skeptical of the ROI on a rental.

    I have an amazing friend who helped me out during the process when I had questions/issues, feel free to send me a PM or come to a Millenial meeting and we can swap tips. 

  • David BarnettPro Member
    Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
    9y

    @Joseph Lee Sure, happy to answer the rationale for choosing Minneapolis as my non-local market.  The reason why I chose to invest outside of Massachusetts was due to the price of the Massachusetts market.  I would like to scale my holdings so that I can have more than a few properties in a relatively short period of time (three to five years).  In Massachusetts, I would only be able to purchase one property a year at most.  In a cheaper location (such as Minneapolis), I'm more than likely able to purchase two to three properties a year if the numbers work.  Properties in Minneapolis are about a third of the price of Boston-area properties (Massachusetts).

    To answer the question of why I choose Minneapolis is fairly simple.  One of my college buddies lives about 20-30 minutes outside of Minneapolis.  As I've visited Minnesota more and more (including make trips to Minneapolis), I've become familiar with the market and I've become more and more aware of the opportunity that Minneapolis presents for buy and hold properties.  In addition to that, one of his better friends in Minnesota (and someone I've met and hung out with a few times) is a general contractor and recently licensed real estate agent.  Therefore, I have a good portion of the "boots on the ground" set up.  I was also able to find a property management company and the gc/real estate agent is on the look-out for properties for me.

    I'd be happy to answer any additional questions/chat if you'd like.

  • Rental Property Investor · Shorewood, IL · Member since 2016 · 80 posts · 46 votes
    9y

    @Joseph Lee, as others have said, welcome to BP!

    My wife and I just signed initial contract on our first property on Wed here in IL.

    My oldest son (23) will be graduating from Iowa State next Spring and has plans to move to Minneapolis area for work (Aerospace Engineering) and his church is planting a new college church there soon, and he also has friends and former college buddies in Minneapolis area and 2 current roommates who have expressed interested in moving with him.

    My thought was...why should the 3 of them pay rent on a house and maybe he should look into buying a 3BR house or townhome that might need a little work and then his roommates pay their rent to him for paying on the mortgage.  The good news is that my son and his two roommates are currently working as the maintenance guys for the apartment complex where they live now so they have some basic skills.

    If anyone has recommendations or areas near the college to recommend, would love to hear about them so we can start looking.

    Good luck on your 1st project!!!

  • Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes
    9y
    Welcome, we deal with 10+ unit buildings, buy/sell, and manage, but if you have any questions about anything let me know.
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    9y

    @Andrew Hargreave where is the college he's attending?

  • Rental Property Investor · Shorewood, IL · Member since 2016 · 80 posts · 46 votes
    9y

    @Jordan Moorhead, I think he's going to try and work some first, but possibly look at his Masters in Aerospace at Univ of Minneapolis?

  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    9y
    Andrew Hargreave northeast Minneapolis would be perfect for that. I'm closing on a duplex there this week actually. It's close to downtown and the U. It's a bit of work to find a deal but very possible.
  • Investor · Minneapolis, MN · Member since 2016 · 27 posts · 11 votes
    9y

    @Joseph Lee Congrats! I am doing the same thing in Bancroft. My mentors have given me a lot of documents (leases, screening info, etc) if you'd like to have them! Makes the starting out process a lot simpler and they do this full time. I think it'd be great to network!

    Matt

  • Real Estate Broker · Maple Grove, MN · Member since 2016 · 216 posts · 80 votes
    9y
    Nice work! Congrats on your first deal. Longfellow is a great part of town so you should of lots of interest from tenants. I love that area.
  • Real Estate Broker · Maple Grove, MN · Member since 2016 · 216 posts · 80 votes
    9y
    Also, I'm loving cozy.co for tenant screening and payment collection!
  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 60 posts · 30 votes
    9y

    @Amy Ranae, thanks for the recommendation on Cozy! Personal anecdotes are always nice. And we're very excited about the new Longfellow digs- everyone we run into tells us about more and more cool stuff in the area that we didn't know was there.

    @Matthew Lindquist, congrats to you as well! Full disclosure- I had to look up Bancroft on the map (I'm still working on the Mpls neighborhood names).... haha. If you haven't been to Northbound Smokehouse and Brewery yet, especially for their Sunday brunch, I highly recommend it. Awesome little brewpub. Also, I'd definitely be interested in the documents if you'd be willing to share. I'll PM you!

  • Real Estate Investor · Honolulu, HI · Member since 2015 · 13 posts · 6 votes
    9y

    Joseph Lee Have you thought about making it a short term rental and putting it on Airbnb. I can help you figure out how much you will make if you're curious.

  • Real Estate Agent · Madison, WI · Member since 2014 · 93 posts · 40 votes
    9y
    Hope the closing went well, and your well on your way to having REI help you reach your financial goals. Cheers and Happy New Year!
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