Real Estate Agent · Saint Paul, MN · Member since 2020 · 7 posts · 3 votes
I am currently House hacking my first deal, and looking to whole sale into a duplex or triplex. In a young investing career, Where have you found good value? Broad question, I know but I'm really looking for some brain food.
My husband, Matt, and I are also in the Minneapolis are! We have found the most value in building relationships with others in the industry, hiring a CPA who knows the industry (talk with @John Woodrich if you need advise in this area), and buying the smelly house that no one wants! Good luck!
I think it really depends on market and geography. In my area industrial warehouse space is booming, you get such high rents for space it's crazy. Some people like using their land to build storage space too, easy to rent, maintenance is very minimal etc. Multi-family builds have good returns but require a lot of Mgmt and can have high maintenance costs. Duplexes and triplexes are good but the economies of scale don't compare to bigger multi-family or industrial properties. For the beginner investor any type of plex is usually good.
The more units you can fit into a building that only receives on tax bill and insurance the better! Especially if you can separately meter them to have tenants pay their own util.
I've been looking into many duplex-quadplex deals in my market. I will keep in mind the separate utilities! As a newer investor I don't quite have the connections to pull off a larger multi-family deal, but I am willing to run numbers and network accordingly if I feel i've found value to bring to the table.
My husband, Matt, and I are also in the Minneapolis are! We have found the most value in building relationships with others in the industry, hiring a CPA who knows the industry (talk with @John Woodrich if you need advise in this area), and buying the smelly house that no one wants! Good luck!
@Tanner Stringfellow depends on the market. What worked 7 years ago (buying prime metro real estate) isn’t working for us today. I’ve always liked small plexes in small towns to get started. Now we are on to small apartments in small towns.
@Matt Higgins I will expand my search radius into the smaller towns. I am looking to avoid an hour or longer one way trip to reset a circuit breaker or fix a faucet.
There was a good post on this way back in 2017 by Ryan Luthi titled "How to find deals that cash flow on the MLS". Search either his name or that title and you should be able to find it.
Something I'd include with that post is to look for large units square footage wise relative to the amount of bedrooms they have, it's possible there is a room that could be converted pretty easily but hasn't for whatever reason which is what I had with a property I purchased. If you have an 1000+ sq ft 1 bedroom unit that could play as a 2 bedroom depending on it's layout of course, but it wouldn't feel cramped.
We have done really well buying places that need work AND that we can add bedrooms. 80% of investors/ long time owners think in a linear way and accept things as they are. There are others that see something completely different when looking at a property.
I Bought a property last week that was in not great condition and it had 4 other low offers with contingencies- I offered to match the high price with no inspection - no contingency as the lot was worth more to me than the asking price for the house- I’m going to knock it down and build a multi unit building so I don’t care about all the short comings of the house that everyone else was using to rationalize their low offers- the sellers signed right away and told the other offers they were declined-1 came back with a $40,000 higher offer- the point is - different people see different opportunities and ways to get there
I used to do long term flips in FL. But everybody and gawd is doing them now. So I’ve transitioned to shorter term Buy & Holds (single family new construction) in Iowa. Their economy is exploding. I picked up a 320k new home for 257k with a USDA rural development loan (2.99%) and a 3-year tax abatement. Facebook & Amazon just moved to town so Im just kicking back, finishing the basement, landscaping and waiting to pull the trigger in 3 years when Amazon is finished. Hopefully that helps the brain food?