I am Nick , my wife and I are looking for investment properties in Sioux Falls, we are new to the RE game and this will be our first investment. We are looking for something turnkey or as close as possible to turnkey. We plan to be hands off and will have a property manager. We move a lot so having a great manager is key for us. Please share any information you have with us. Thank you.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Welcome to BP. Are you in the Sioux Falls area?
My best advice is to avoid cheap and old properties that have not been updated. I have seen some $100K duplex change hands four times over ten years. People don't realize the problems that come with older properties and if you are hands off, it can be hard to make a go of it.
Do you have a price range or any details on what you are looking for?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Welcome to BP. Are you in the Sioux Falls area?
My best advice is to avoid cheap and old properties that have not been updated. I have seen some $100K duplex change hands four times over ten years. People don't realize the problems that come with older properties and if you are hands off, it can be hard to make a go of it.
Do you have a price range or any details on what you are looking for?
I am Nick , my wife and I are looking for investment properties in Sioux Falls, we are new to the RE game and this will be our first investment. We are looking for something turnkey or as close as possible to turnkey. We plan to be hands off and will have a property manager. We move a lot so having a great manager is key for us. Please share any information you have with us. Thank you.
Greetings. We were in the SF area, but now we are currently out of the county for work. Thank you for responding, we have seen properties that have peaked our interest but we was curious like why is this still on the market? We are looking for a duplex (I like the idea of 2xs the income with only 1 morg pmt) no more than 180k, or condo. This will be our 1st property so we want to be able to just buy it and take it over. We no nothing about the market in SF we just really liked the area. Our main focus is to find a property that we will have little to no problem renting out and managing. Since we do not live in the SF area we will be using a property management company so we have to find a great one. Thanks again for your advice.
Episode 283 Paul Thompson - Quite a new episode but I would think everyone would agree this is a top episode. Mainly, the systems implemented are fascinating (VA, automated offers, etc.) Plus...escape velocity...
Episode 113 – Jay Papasan - Very practical slow and steady advice
Episode 221 - Tim Shiner - his concept of equity build up and "shearing the sheep" shows some of the flexibility of real estate vs a 401k
Last but not least, I also recommend all the tax advice given by my fellow CPAs on the BP Podcast.
Greetings. We were in the SF area, but now we are currently out of the county for work. Thank you for responding, we have seen properties that have peaked our interest but we was curious like why is this still on the market? We are looking for a duplex (I like the idea of 2xs the income with only 1 morg pmt) no more than 180k, or condo. This will be our 1st property so we want to be able to just buy it and take it over. We no nothing about the market in SF we just really liked the area. Our main focus is to find a property that we will have little to no problem renting out and managing. Since we do not live in the SF area we will be using a property management company so we have to find a great one. Thanks again for your advice.
Nick
The good stuff is selling really fast. If it is sitting on the market or has price drops, then there is serious issues. Nothing money can't fix, but these older duplex in central SF are 70-100+ years. That can mean original plumbing that needs replacing, rubble foundations that are leaking water every time it rains, bad windows, 40 year old furnace, etc. This can all be fixed, but you may find a duplex for $100K that needs $40K worth of work. Then the problems is some of the neighborhoods, you may not get the money back out in rents. I had a couple properties like that and I sold, just to avoid the constant calls and repairs. If you have PM, you will be sheltered from the tenant issues, but not from the cost of the repairs. I am not trying to scare you off, but just see too many out of state investors come into things without knowing what they are getting into. Another pit fall for out of state investors is not understanding the climate. We get lots of rain at times, so water in basements can be an issue. We also get wind, so trees will lose branches and fall down. Of course there is snow and ice which can be a liability for a landlord. The cold temperatures can result in really high heating bills, especially if the windows are old, furnace is old and little insulation. Even if the landlord pushes the expense off on the tenant, good luck retaining people when you hit them with a $200 electric bill in the winter. All manageable, just need to plan for it. SF is a great community.
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
8y
Hi and welcome to BP and Sioux Falls! I agree with Joe's comments: This is a hot market and deals are tough to find. Turnkey might be a tough go unless you are looking to build equity for the long haul. Rent/price is lower here than you would expect listening to the podcast. The value usually comes from deferred maintenance or some other seller distress.
@Joe Splitrock thank you, that was a lot of good information, we want to buy and hold not really looking to buy and flip. We are not afraid of a little fixer up we just do not want to end up doing being a Do it your self episode. What are the going prices for the homes we are looking for?
@Benjamin Aaker thank you for your advice as well, we are keeping an open mind.
I walked through this property. Tenant in the basement told me they get water when it rains and it has mold - owner didn't put this on their disclosure. Garage needs to be torn down. Boiler is over 40 years old and all the pipes have asbestos wrap on them. Every tenant has multiple cats. The units have 1960's flooring. Junk is piled in all the commons areas. All the windows need to be replaced. Several non-functioning AC units. Front porch is rotting and soft as you walk on it. I worry about the original cast iron sewer lines, just from my experience that can be trouble. There was some plumbing updates, but I would expect issues. Current tenants have gotten some county rent assistance, which tells me current tenants are slow pay.
It is rough. Clearly all the owners over the last 50 years have put nothing into the property. There is a newer roof. but most likely that was done through insurance after a big hail storm a couple years ago took out half the roofs in the city.