What can I do in Minneapolis/St.Paul with $120k?

9 Replies

After a highly successful rehab that began back in 2012, I now have $120k worth of profit to invest in my next real estate deal. It's been a great journey, but my wife and I are ready for the next deal.

The only problem?

It feels like a lot of the low-end rehab deals have dried up. I've not given much attention to the MLS because it's feeding frenzy. I've also seen other marketing attempts reduce in overall effectiveness.

At this stage in the game, I'm trying to determine the best strategy going forward. Now that I have something in liquid assets I can avoid the "no money down" creative deals (thank God).

We would like to do another rehab. Ideally, we could purchase and fund the repairs with the $120k, then flip shortly after that for a quick profit...even $10k profit would suffice. Something repeatable and scalable.

Any ideas?

Any takers? Anyone in St. Paul or Minneapolis or Minnesota? Any house flippers, remodelers, investors?

@Matthew Berry Do a larger deal - with a good liquid position you can operate in the higher price point ARV $500k and higher - these deals are typically much more profitable. Tying up all of your cash to make 10k on a deal is scary place - one unexpected issue, price reduction, etc and you are flipping houses for community service.

I agree with Travis, look for some partners or a lender to help fund something larger. Or you could become a private lender.

I'm a real estate investor in the Twin Cities area and am closing on my first flip in Saint Paul on Friday. A bit of advice, stay clear of category 1, 2 and 3 vacant lot buildings in Saint Paul. It has been a major pain with all of the inspections and fees. It is unique to Saint Paul and a lot of the foreclosures are on the vacant lot list so be aware if you are investing in Saint Paul. It may work for buy and hold but it is a very lengthy process so not ideal for flips. While it is nice to be able to pay cash for properties, it's more advantageous to leverage the banks to maximize your buying potential.

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If I were in your situation, I would probably try to use traditional financing for purchasing a property and use your cash for the down payment and rehab.  

If you can't find any deals that are worth your while, I'm sure there are flippers/rehabbers in your area that are looking for funding.

Thanks for everyone's responses. I've heard the Cat 1,2,3 properties can be a pain, @Mark Totzke . Is the property in Como you're flipping one of those?

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Yes, the Como property I'm flipping is a category 2 vacant property. It took 4 months to get everything up to code and get the certificate of code compliance. I take part of the fault for the lengthy rehab time because I was trying to save money by using a handyman. I learned shortly into the project that I must use licensed contractors. The 5 inspections and getting everything up to code put me 30k over budget but luckily I got the property very cheap. Will profit 11-12k.

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