Beginning investor here looking to purchase a multi-family/duplex unit within the next two months. I am planning have most of my mortgage paid by my tenant while socking my addition towards a money market fund as a down payment in a couple more year for another unit!
I've been shopping Zillow/Trulia/you-name-it for daily updates on a duplex in a relatively safe neighborhood in the suburbs north of Minneapolis/St.Paul (think Roseville, Shoreview, Como area) but I seem to be having trouble finding decent properties that are not in relatively safe areas. I am wondering, is this a common theme in this area? From what I have seen in my price range (220-270,000 with 4+ bedrooms) it seems to be the case.
Hey Nick - I'm in your exact situation but looking more down south and haven't found much. Most of the MF units are right in Minneapolis in not-so-great areas. I'll be curious on the feedback from others.
Hey Nick, I've also been contemplating househacking in the area. I think you're going to have a tough time finding anything decent near Minneapolis in that range. I assumed you meant 4+ bedrooms total and not per side. St. Paul seems to have a few but again, not in the best areas. From what I've seen, you might need to get out further or raise your range. Are you thinking FHA for your loan? If you haven't considered, the low down payment might help you get to a higher range.
There are all kinds of duplex/triplex/fourplex houses available in decent areas of Mpls, but they will cost 300k-650k usually.
@Nick Tenge I agree with the others. It will be tough to find that in the Twin Cities right now.
IMHO That price range is too low for anything in a nice area
@Nick Tenge you're probably going to have to increase your price range or look in different areas. Columbia heights, robbinsdale, west saint paul, west 7th, etc are all decent and have duplexes in that price range. The areas you're looking in there just generally aren't a lot and they're priced a lot higher than $270k when they are and in livable shape.
Check out the City of Anoka. Quite a few multifamily options. Just be aware that there is a Rental Density Cap on Single Family units.
Thanks all for the insights. Are you guys using MLS or other active methods? I would think the market heats up in the next 3-4 months but may start looking for private listings via my Jeep. Has anyone tried this and had success?
Ivan - 4 bedrooms +, yes. I am looking at FHA loan but considering raising my purchase price as I prefer quality > quantity. I hope to have my tenants in in a decent area compared to sketchy neighborhoods ( I think this will help for screening purposes too). Probably somewhere around the 300,000 range. What sort of stage are you at in your investing? I'd be curious to learn more about how you are approaching this.
@Nick Tenge I bought my duplex in Rosemount south of the cities for 350k. I think if you can't afford more than what is out there than consider this. I started with a single family home in frogtown neighborhood in St. Paul. I lived in that house with my family for about a year and a half. I knew that this one house would propel me forward to buy the duplex in the area I wanted. Remember your first deal is not your forever home and it does not need to be a home run.
I'm in the same situation as well, looking for MFH for househacking, but I found it hard to find a good property on MLS/Zillow even with a little higher price. I'm however limiting my area to even smaller/nicer area in Minneapolis.
I’m curious to hear others opinion on the possibility of buying a MFH in poor conditions and renovating it then househacking. Would it work this way? And besides more cash and time needed for renovation, is it a good idea to get around the current market?
@Nick Tenge Right now I'm trying to nail something down soon to take advantage of the FHA loan. I'm really only constrained by the FHA limits. I got my first rental property, a duplex, and am now looking to keep the ball rolling. Ideally I'd find something in a good area that needs some work. Over the course of the year that I live there I'd update both sides ultimately moving back into the house I currently live in. I'd have to rent that out for a year as well but well worth the time and effort for the springboard I feel it would give me. Not a lot out there outside of Minneapolis or St. Paul for a GREAT price. Let's grab a coffee or drink and discuss some more.
@Nick Tenge I agree with the above comments as you will have a hard-time finding properties in those areas that you would like as the inventory is just not quite as high. But if you are willing to giving up distance to perhaps job, families, friends you can find duplexes in "good" areas that will cash flow, just need to determine your parameters as to what you are willing to give up (i.e. price, location, and or condition). Also what are your investment returns that you are looking for and how that may need to change based on which variable above you "settle on". If I can help and be a resource - certainly reach out! I wish you the best of luck in your search!
There was a good BP podcast (which I believe the idea is from a book) that talks about comfort vs profitability. They are inverse of each other so it’s different for everyone.
@Kevin Quintanilla-Toledo I am looking at some properties right around Hamline area, did you have a decent experience? I myself am not worried about the crime, however I feel renting in a safer neighborhood not only guarantees less theft/damage to the building but better tenants rather than in a less wealthy neighborhood like Frogtown.
@ Ali K. To me it seems like it is becoming more a buyers market especially since interest rates are at an all time low. Perhaps times like now when we are hearing not too much on buying vs selling are a time when it is a great opportunity?
@Ivan Widman Messaged you.
@Jadde Rowe I have an agent but will let you know if things change. Appreciate you reaching out!
Another idea - I am in the process of converting the lower level of my SFH into a unit. I'm in a nice neighborhood and wanted to house hack in the burbs. Not many duplexes in my neighborhood so this route made sense for me. Not cheap though ~60K to finish into a unit (2BR 1400 soft).
I just bought a duplex in Dayton’s bluff for 200k, but as you note not the best neighborhood for that price - plenty of duplexes I’m finding in that range 150-200K.