All Forum Posts by: Adam Tafel

Give us a few examples of the types of repairs? Are they little things that a hands-on owner could do themselves, or legitimate issues? You might just be having an unlucky first year, or you could have a bad PM. 

I have a 2 car garage next to a parking pad with another 2 spots. Plenty of room for a 4 car garage with an ~800 square foot apartment on top, right? 

Does anyone in the Twin Cities (St. Paul) area have any contractors to recommend for this sort of project? Have you done this sort of thing before? I know the city won't give me a separate rental license, which could be a long-term concern. Airbnb on a non-owner occupied property still requires a CO... but if the main home is licensed, I don't see the government knocking on my door about a vacation rental **knocks on wood**

Any input is greatly appreciated, thank you ! 

I own a few 1880's homes in St. Paul, and sell a decent amount of older MF in the area. My thoughts:

We don't see many properties with active knob-and-tube these days. Some limestone foundations are 3+ feet wide and wonderfully maintained, while others are crumbing and leaking, avoid the latter. Hard to avoid cast iron drain pipes, not a deal breaker for me. The possibility of LBP is unavoidable and a non-issue IMO. Asbestos insulation on boiler pipes is fairly common, if it appears friable its best to encapsulate, not an expensive process. Replacing windows can be a major capital expense, so know what you're getting into by getting a quote. Most of these homes will have boiler heat, around half will have modern high-efficiency systems. Get a quote for replacement during inspection and build your numbers around the cost. An old roof is an old roof, invest accordingly. I honestly have no personal experience dealing with historical preservation rules, but if you're in a lower price-point it should be a non-issue, do your due diligence when you decide on an area. 

What to entirely avoid? Managing a big construction project from out of state without trusted contacts and experience. There are plenty of old homes that have already been gutted and updated, if you attempt a big job you WILL run into expensive surprises. 

@Chris Schadl - sorry to hear about your experience, thanks for sharing. The increase in earnest money after lender work-orders is strange... it sounds like you've got some good perspective on the experience, and plumbers are generally cheaper than lawyers. Utilize BP forums and local investor FB groups for contractor references. 

1. Yes, and probably. Is your CA home financed FHA? Talk to a good lender, @tim swierczek is great. We use him for the majority of our MF deals.

2. The western suburbs are great. Lots of people overpaying for overpriced duplexes IMO, but there are always deals to be found. Plenty of nice 50s-60s side by sides. 

Welcome to BP and the Twin Cities! 

@Mario Russo - we are all over the metro. I've done quite a few deals on the West side of St. Paul this year, western Minneapolis suburbs as well. I just listed a 4plex on E 7th St in St. Paul, 319k. It's in pretty great shape, rents need to be raised a bit. It's active Thursday, if you'd like to see it let me know! 

I've written a LOT of offers on 4 unit properties this summer, no luck so far. As with the rest of the small MF market, many buyers are willing to overpay. It's frustrating getting outbid all the time, but better than buying an overpriced investment. Not sure how big you're willing to go, but I have a client trying to sell a 16-unit on Cathedral Hill off-market. 

Many Realtors don't like working with investors, because they tend to have little loyalty when it comes to their agent(s). Be upfront with people, don't sign any rep contracts, "bring me a deal"! 

@Michelle Gomez - we've helped a handful of clients in MN buy 2-4 unit properties with VA loans, it's a great strategy. Because your cash to close is minimal and you jump in without equity, look for properties with value-add opportunities. In certain markets it can be tough to achieve a safe amount of cashflow without a downpayment, so be sure to carefully analyze your numbers.

@Aaron T. - I'd love to buy on Vieques someday, thoughts?