New to Real Estate Investing

[Jack Stang]

Hi, My Wife and I will be moving back to Minnesota (Twin Cities area) in January 2025. We are looking to start REI with a house hack. Looking for advice on what areas are good/bad. I analyzed a few properties and they came back very cash flow negative, any advice on accurate inputs for the twin cities area would be appreciated. I just finished the How to Invest in Real Estate Book by BiggerPockets. 

[Jeff Schemmel]

Hey Jack!  Glad to hear you're coming back, there's a lot to love about living here.  Good call house hacking, that was my strategy too!  My wife and I are on our second househack, just about to start our third and it's been a fun ride.  When househacking, I tend to lower the weighting on my cashflow and split my analysis into 3 parts.  First, how much is this place going to save on my cost of living when I first move in.  I set myself a % cost of living reduction a property must help me achieve before moving to part 2.  Second, what does it look like after I move-out?  3rd, what improvements or "value-add" can I bring to the table with this one?  I tried to look for properties I could improve as I lived in it over time, not all at once, and that would help me improve the cash flow.  We're playing the long game, and house hacking, while not a get rich quick thing, is a great way to supercharge your returns by putting low dollars in and getting all the benefits of real estate investing in one.  

As an agent, we are barred from commenting on things like "good and bad" areas, however we can comment on facets of an area that improve the likelihood of stronger appreciation and/or rental rates.  There are excellent crime data tools online that present a solid dataset that would help you choose which neighborhoods are good and bad.  Happy to chat anytime; would love to hear what got you thinking to move back!