New Member Looking to Network

36 Replies

Hi Kevin. I just moved to MN and am looking to ramp up my investing. I have three units in Austin and have just started rehabbing my first house as well right now. I just want to say hello.

And hello to the rest of you. There is great info here, and I appreciate reading and learning from all of you.

Hey Kevin! Congrats on the offer. I'm also new to the real estate world -- reading this thread was awesome! Keep us updated on how things are going! I'd be curious to see what your experience has been like with your first property. I'm looking to get into Multi-Family properties as my focus. 

Greetings. My wife and I own a couple studios in Fridley that we bought in 2010.  We are now looking to jump into multi family units for cash flow. Our plan:

1) Aiming for 15% cash on cash return

2) Current rents are under market and can be stabilized with a good property manager

3) Light rehab on each unit as tenants move out (paint, kitchen, floors)

4) At least $200 cash flow monthly from each unit

Are these reasonable goals? We are out of state investors (with have family in the area) so a good property management team is key. Along with a broker who can find the great deals. We will be visiting first week of Dec and would love to meet up with folks or go looking around ares that we should focus on.


@Jordan Moorhead @Tim Swierczek @Ivan Widman @Joe Schaak @John Woodrich @Jay Schultz

Good Morning fellow investors.  I just wanted to update everyone on my wife and I's progress and also ask a few questions and maybe get some tips for our next steps in an RE journey! 

We closed on our side-by-side duplex in north Minneapolis (just south of the new Top Golf by 694 and 94) on Nov 8th and jumped right into reno and additions. We got a construction loans to help with those costs and took the property from a 4/2 to a 5/2 by adding a basement bedroom on one side. We inherited one set of renters, and started showings on the updated unit mid Dec and had our new renters move in Jan 8th. The whole process has gone pretty smooth (overall) and we are excited that both units are fully rented with what we feel are good tenants and now we can "relax" a little bit. I don't see a lot of people share "their numbers" on here but I guess I will go against the grain (hope that's not an issue). We were able to purchase the property for 240K @ 4.6% IR and used 11K for reno to add the bedroom, for a total purchase of 251k. We are receiving 2,600 a month for rent now and plan to increase that to 3,000 when we fix up the unit with the inherited renters this spring (as they aren't paying much). So the total numbers with the aforementioned purchase price along with 10% for CapEx and Main each and all other costs (taxes, Ins, S/W/T) are:

-Equity once the second unit is updated = ~$100k

-Monthly Cash flow of ~$869

-CAP = 9.37%

My wife and I had a smooth transition into RE and we are looking to expand, maybe not right away, but once the dust settles a little more.  We are looking in the next 6-12 months so we can re-coup some cash reserves and make sure we're getting the full buying/landlord learning experience under our belts.  Since we have a construction loan at 4.6%, we are thinking about doing a cash out refinance and are looking for advice/tips on this. We wont be doing owner occupied so the next down payment will have to come from us. I've started reading books/watching videos on cash out refinancing but I'd love to chat with someone who has done this first hand in the area. I'd love to learn more about how this affects my taxes as well.  

With all the info you see above and your expertise, what would you do going forward?  How would you go about expanding in RE? Is a cash out refi our best option for the scenario described above? 

If people would be more comfortable sharing their opinions in private, don't hesitate to message me. Lastly, thank you to all have helped us thus far in our RE journey.  We are still new and learning but it has been positive in our eyes thus far.  

Kevin

@Kevin Laurion I would start by figuring out your financing options and talk to @Tim Swierczek .

You didn't mention how much you had to put down on the loan, what you have to spend to get to $100k in equity, or what the ARV is but before you start your second rehab I would look at what comparable properties are selling for. Your refi will likely be limited to 70-75% of appraised value and if you end up with a nicer property than your comps you may not get the appraisal you are looking for.

I have seen several investors surprised at their appraisals coming in low.  For example, adding a basement bedroom is typically valued at a lower price per sqft than an above ground bedroom.



@John Woodrich thanks for the reply, and I’ll be meeting with Tim to discuss financing shortly.

We put ~55K into the property up front and we will put ~10k in to achieve the anticipated $300k appraisal value. If it comes in lower, that's okay, we will adjust once we have true numbers. I'm still in the education/learning phase of our REI journey.

But ultimately I’m looking for advice/experiences that people have gone through that have maybe been in our situation. Or something of its sort. My wife and I want to educate ourselves on all the financing options available so we can make a decision that works for our goals/ambitions.

Kevin

@Kevin Laurion , sounds like a success! Congratulations. I'm unclear how you purchased the property initially. Personal mortgage? Hard money loan? You probably said in the initial post but I'm being lazy by not scrolling through things. I can share my experience. I purchase using either private money or a commercial loan. Once rehab is completed, I refinance (if initially a private lender) or modify the existing loan (if a commercial lender) in to a commercial 5-year loan with a 20-year amortization. As that loan matures, we'll refinance in to a 30-year or an all-in-one if possible.

All that said, you're best bet is to talk with @Tim Swierczek . He knows the investor space and is a fellow investor.

@Kevin Laurion Conventional guidelines limit your cash out on a duplex to 70% LTV. This means on a 300K value you would need to leave 90K in equity or a max loan amount of 210K. Portfolio loan options offer cash out up to 80% which would be 240K.

@ Kevin Laurion welcome to BP! I am from Blaine and my wife and I are just getting started looking for properties in the area. Anyway, did you mention how you found the property? MLS or off market?

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here