North Minneapolis - First Duplex Opportunity

5 Replies

Hello all! So I'm in a bit of a fix. For the past few weeks I've being trying to figure out what to deal about getting my first duplex. The problem is...I'm only qualified for less than $130K for a conventional loan due to my income and lack of assets (I have no savings). As a result the only place I can really invest in right now is North Minneapolis, which is considered the bad part of the City. BUT I have two properties I am considering right now in the Webber-Camden neighborhood, an area considered safer than the lower parts of N. Minneapolis.

Thanks for the help!! I think that Property #1 is the best bet overall...just no garage. Killer. I've estimated that I might not have a tenant for five months (not in actual calculations or vacancies), considering winter is right around the corner. I currently pay $580 for my studio apartment (which just went up by $30) and roughly $20 for electricity. Not sure if my budget can survive 4-5 months with +$500 extra costs...currently only make $27.5K a year.


One property is a SFH converted into a duplex. Beautiful home. New roof, working fireplace (downstairs unit), hardwood floors in the downstairs unit and basement (no washer/dryer though). Everything looks like its in excellent condition (no damage, visible mold, smoked units, etc). 2BR/1B for the main floor and 1BR/1B upstairs. Both units vacant; lower 2BR was rented out at $950 and upper 1BR was rented out at $750. Built in 1936, 1 ½ stories.

The kicker? NO GARAGE! Which is a real deal-breaker for me. The reason being is because I have a crime prevention business and I plan to get my car wrapped. Parking a car that has any essence of crime prevention attached to it will result in massive vandalism…so big no-no. There is a space behind the building to build a garage, but I don’t know if it would be big enough or be allowed by the City. I called them on Friday and am supposed to hear back by the 24th. For additional info, the crime maps show that there was a murder right across the street in May…

So all that aside, here are the #s:

Asking Price: $110,000 (dropped from $125K)

Offering Price: $90K (based on lack of garage, seller’s expediency, past murder, vacancies and upcoming winter, as well as what I can afford to pay per month)

Rent: $950 (once rented); Annual = $10,830 (5% vacancy)

Operating Expenses:

Water/Garbage - $1380

Gas - $106 (altogether; split between two units)

Electric (separate meters)

Insurance - $1500

Property Tax - $1,666

Repairs (if needed) - $1600


=$1998 Annually

Debt Service:


Cash Flow:

-$5106 or -$425.50 a month

As owner-occupant:


Utilities – $375

$6 + $150 + $139 + $86 + $50 (electric; estimated)

$1017 a month…doesn’t include repairs


The second property is different. It is an up/down duplex. Asking price is $99K. Upper unit was renting for $750 and lower unit was renting for $720. 2-car garage, very safe area. Owner pays water, trash, snow/lawn. Tenants pay gas and electric. 2BR/1B per unit, both vacant. 2-car garage with driveway (BIG PLUS). Built in 1906. 2 stories. The one big problem? The upper unit is fine, but the lower unit…former smoker lived there. It would have to be cleaned up before renting, so I’m sure the price reflects that. No telling how much that will cost to repair. I don't have any costs from the seller on utilities, so I had to estimate.

Asking Price: $99,000

Offering Price: $85K (based on smoked unit, vacancies and upcoming winter, as well as what I can afford to pay per month)

Rent: $850 (once rented); Annual = $9690 (5% vacancy)

Operating Expenses:

Water/Garbage - $1200 (estimated)

Gas – $50 estimated (separate meters)

Electric – $50 estimated (separate meters)

Insurance - $1500

Property Tax - $1522

Repairs - $3000 (estimated)



Debt Service:


Cash Flow:

-$4240 or -$353 a month

As owner-occupant:


Utilities – $563

$100 + $150 + $127 + $86 + $50 (gas, estimated) + $50 (electric, estimated)

$1122 a month…doesn’t include repairs

@Ulrich Faircloth

I've read your post twice, and it is not clear to me that you are the owner/occupant.  I don't know how you came to $1122 a month on house #2.   It would help if you would clarify up front that you are definitely renting one of the units.  For instance, on house #2, you have 'owner-occupant' $559 Mortgage, Utilts, etc.  It is hard to track what you are saying.

I will say that I personally go for properties with positive cash flow per door.  Your tenants should pay your bill.  But consider the tenant type you will get in North Minneapolis.  Do you want an up/down if the tenant living upstairs has a lot of kids?  You have to live there.  And North Minneapolis is not the only  place where you can get a property under $130K.  

@David Moore

Hey David. Thanks for the response. Yes, I missed up on my numbers some. The "owner-occupancy" bit was more so note-taking that I did at the time. Sorry for the confusion. That's actually what I would be paying if I did NOT have a tenant, as neither property is rented. 

I have found properties below $130K in St. Paul, but the City of St. Paul is not offering down-payment assistance at this time and the only areas that are covered right now, buy a neighborhood association, are the Frogtown and Rondo neighborhoods. Neither of which have anything that is affordable. Down payment assistance just ran out for Minneapolis a few days no more luck there.

At this point I've decided to just put things on hold and just deal with living in my studio apartment. It is too close to winter to take a chance on anything that is not currently rented out. The first property would have been amazing, but my loan won't allow a garage to be built (which I absolutely need for business purposes...and general vandalism prevention) or cash credit (to cover half of expenses for 4-5 months). So completely out the door. 

But you make a great point about North Minneapolis. There's just really not much to invest in right now...figured I'd have to "start somewhere." Currently live in Uptown/Whittier, which is where I'd love to stay. I just can't find anything affordable around here. Everything is more than $130K. What would be awesome is to find a triplex or quadplex, but those seem pretty rare. Saw one a few months back for $135K but needed extensive rehab, which my loan doesn't cover anyway. Someone scooped it right up.

I know of a SFDU in North Minneapolis, 3600 Newton, that a wholesale is asking just $65K for.  It is not where I like to buy, but the crime isn't real bad in this part of north.  Check it out:

I can tell you the market is white hot right now...we  are having trouble securing a duplex...the sellers have the upper hand right now.

What I'm thinking is you house hack.  You get 2-3 roomates, and they pay everything for you, house included.  You don't even need a rental license for this, I don't think.

I've heard and noticed via the crime maps that anything north of Dowling is relatively safe. I just don't like being that far away from the City center. 

Hmm...only problem is that I like having my own space. That's especially true when I'm trying to run a business on the side and have inventory to store. Don't want things missing. If I didn't have anything else going for me that would probably be a good idea though.