I'd like to take this chance to introduce myself as a new Minneapolis investor. I graduated from the University of Minnesota and I currently live in Los Angeles (Mar Vista). In the next 6 months, I plan to relocate to Minneapolis and make the leap into investing. My goal with this approach is to use lower living expenses to improve my day job cash flow and begin house hacking where market values are low enough for me to "start small".
In the spirit of collaboration, I'd love to take this chance to share the latest draft of my emerging investment strategy for feedback.
My "Why" and CF Goal:
I love not working for someone else, and I'd love to travel without someone counting my days out of office. Most of all, I want the freedom of creating my own destiny a la "Rich Dad". To generate 3x my monthly costs, I estimate I would need to cash flow 6k per month. In the spirit of collaboration, I submit for your feedback my emerging investment plan:
Markets considered, favored:
Favored: Minneapolis - Strong employment, population and rent growth, in addition to what appears to be relatively low and falling values makes this very compelling. Bonus: my sister is house hacking a triplex near Lake of the Isles, and I can start with neighborhoods where I already have basic local knowledge.
Considered: Minneapolis, Los Angeles, Las Vegas, Denver, Chicago, Kansas City
Investments: Arguably the most "under construction" part of my plan, your insights are welcome and encouraged.
2BR, 2+BA Condos with roommates - Lower values lower barriers to entry theoretically, but internet skimming of this investment implies that HOA assessments are an ROI risk to be likened to underestimated capex. If I can use house hacking to improve my overall cash flow and build equity in this first deal, is that a risk worth taking, assuming the deal is good?
2BR+1-2BA SFH & Duplex MFH - I have a lot of research to do here. If you're an expert around the Twin Cities, I'd love to hear from you.
Meet great local investors, agents, brokers, and lenders like you and offer to buy Juicy Lucy & IPAs for your wisdom. Help you out with a few deals, and start setting up my lead funnel.
Thanks everyone. Hope the novel was relatively skimmable.
Welcome to Bigger Pockets.
Hey @Colin Percy , welcome to BP! I'll apologize on behalf of the other local TC investors. Posting over in the Minneapolis-St. Paul forums will get you more responses, so maybe re-post this over there.
1) I'd advise adding a picture to your profile and filling it out a bit more- easier to have conversations (even on the forums) with someone when you can picture yourself talking to them in real life.
2) I read your strategy- glad to see you've put some thought into it! One note- home values in MSP are certainly not falling (maybe you were referring to other "values"?). You'll read some commentaries that the market is starting to swing back toward a more "balanced" market vs. being very much in favor of sellers, but values are continuing to rise, albeit maybe more slowly than in the past. Maybe a local agent can chime in with some more numbers here.
3) What you will notice is that the market here is very seasonal. I'd advise getting hooked up with a local agent soon to start getting a feel for pricing in the metro (I have a recommendation if you'd like), but keep in mind that listings drop like a rock in the Oct.-Nov. timeframe and will be pretty scarce until spring, especially in the small MFH space. Don't be discouraged with the low inventory if your search gets started before spring.
4) As you mentioned, I'd start to get to know several areas where you'd like to invest (down to the neighborhood level, not just city). Look for properties in this area to understand pricing, and just as importantly, start to nail down rent values. Look on Craigslist, Zillow, and Facebook and start to get an understanding for what a 2 BR-1 BA will rent for in this location and that condition, vs. a 1 BR-1BA in that location and this condition. You get the idea. If you don't know what a unit will rent for, you have no idea what you can pay for it and cash flow.
I'll leave it at that, but stay focused, be willing to spend some time and be patient, and you should be able to have success here.
Thanks @Joseph Lee ! Really appreciate your perspective.
Hello! @Colin Percy
Welcome to BP, and congratulations on making the decision to invest in your future via real estate.
I have written a few blog posts that may help you get started here on BP, and with your investing. Please click on the links, give them a read, and share your thoughts in the comments.
First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:
The second is a post that will help get you focused with your real estate investing goals:
The last one is a post that will help you choose an “investor friendly” real estate agent.
There are many agents out there, but it’s important to choose the right one.
I love answering questions if you have any! Good Luck :)
Thanks! I'll check those out. Appreciate the warm welcome.
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