All Forum Posts by: Adam Tafel

If I were moving to an expensive market I would start with a multi-family househack. Your 150k likely won't go very far in San Diego if you're shopping with an investment loan (25% down). Occupy a 2-4 unit property for a year with 3.5-5% down, then find a SF for the longer-term. 

I'm obviously biased, but I would start the investment property search in the Twin Cities rather than San Diego.  You could sell your current residence, occupy your new investment until you move, and likely recoup the entire ~150k before heading to CA.

Sharlene- definitely speak to a financial advisor before pulling out of the stock market, I am not qualified to advise you on that front. You have options, it's possible to convert a 401k into a self-directed IRA and invest in real estate, but there are stipulations. Are you still employed?

Covid19 presents an interesting time for investors, many are a bit nervous at the moment. We are seeing an overwhelming majority of rents being paid, as the government's response to temporary unemployment has been generous. The multifamily market in the Twin Cities is still very hot, we are seeing most investment properties go into multiple offers right now.  I'm personally still looking for investments, although my criteria for cashflow and vacancy projections are higher, in order to protect myself.

Timing the housing/stock market it tough. You've got many moving pieces here, and things aren't going to line up perfectly. All my clients are asking similar questions right now (is this the right time, should I wait, what's going to happen, etc). My answer is always the same - the search for an investment property generally takes at least 6 months, assuming you aren't willing to overpay. Build your team, get you ducks in a row, make a plan. You don't have to buy if things still feel shaky, but you want to be ready when opportunity knocks.

I've got a few colleagues who work in Central Wisconsin, I grew up in Eau Claire. Feel free to reach out if you'd ever like to talk! 

Shoot me an email, I can send you one. 

@Javier Cuevas Santos I use Quickbooks, but I'm on the verge of outsourcing all accounting. My full-time job requires a decent amount of book keeping, so it makes sense at thing point. If I had a normal w2 gig I would probably continue to handle the accounting myself. 

@John Rickgarn that's a pretty huge reduction, nice work! 

Thanks for sharing @John Rickgarn ! Starting with fresh tenants is the way to go IMO. Can you share details on the 20k decrease? 

Any Airbnb hosts in the Twin Cities? I have a housing need for a client, 3 months beginning July 1st. Must be 15 minutes from Eagan. Shoot me a private message, thank you! 

Facebook marketplace, craigslist, apartments.com. Since we're already at May 5th, add "half-off May Rent" to the title. Generally I don't like renting to folks who move in last-minute mid-month (sign of irresponsibility, statistically cause more problems in my experience) but due to the pandemic plenty of tenants are in unique situations with housing. Good luck! 

@Puja Shah - welcome to BP! 

1. The goal is to achieve the maximum return with the least amount of work, and some property types tend to cashflow better than others. For example, a newer condo or town home in Minneapolis might not need many repairs or be difficult to manage, but these properties also aren't going to perform like a 4plex. I stay away from any property type with an HOA, although there are certainly investors who have made a killing in the condo market.

2. Generally speaking you'll see your returns increase when you have the opportunity to add value. Very few turn-key properties on the MLS are going to beat the stock market in terms of cash on cash return, especially if you're using an investment loan (not househacking). I look for unfinished square footage and cosmetic update opportunities. Turning 2/2 duplexes into 3/3s is a great return on your money, plenty of these to be found in the western suburbs of Minneapolis.

3. There are plenty of agents who also invest, many can be found on BP. Talk with few, get recommendations, find someone who communicates well and is trustworthy. 

4. The MLS if full of rental properties, and good agents will have information on income/costs. That being said, it's up to you (and your agent) to perform your own due diligence. Rentometer.com is a pretty good starting point for income projection, although it can be a bit misleading at times. I'm a big fan of walking up to neighbors and asking them what they pay in rent. Probably the most accurate source of neighborhood value.

5. My criteria: I invest in homes/neighborhoods I would live in. I like them to be centrally located, ideally near hospitals/colleges/city centers. Airbnb has been my main strategy over the past 5 years, but I'm beginning to branch out to traditional rentals. 

@Logan LeCompte - welcome to BP! I client of mine recently pulled off a great BRRRRR triplex in West St. Paul, I'm happy to connect the two of you. There was also a great in depth deal analysis posted by a Minnesota investor recently, search for "BRRR Success Story Saint Paul MN". When it comes to seeking advice from other investors, ideally you find someone who: is using the same strategy, in the same market, who has pulled if off within the last year or so. Both of these people would be great resources.

I've currently looking for my third househack, but always on the hunt for a BRRRR deal as well. I'll be selling one of my first investments next month, and I can finally have the ammunition to play in the cash buyer league. Always looking to learn more, as the risks much higher than househacking.