All Forum Posts by: Corey Hawkinson

@John Francis Hinck Originally I did not want to reply because I’m not an expert in this type of transaction but I’ll give my 2 cents. I also don’t like to respond negatively to anyone starting out because I believe in real estate as a great investment. Since there are no responses so far I will start this off...

My initial reaction is that this seems overly complex for such a small deal. 4 investors on a $63,000 purchase feels like too many. Also, although the return percentage is great, I don’t think I would want to wait 15 years to get repaid on a $3,500 investment.

Do you have financing set up? I love that you’re using 15 year amortization. If a deal works with 15 year amortization it is likely a solid deal. However, I don’t believe traditional financing will like the fact that the down payment is coming from silent investors.

@Will McInerney Tim gives great advice above. Also, he won’t say it but he’s also a highly recommended lender. Full disclosure, I have not used Tim, but I know several people who have and I have only heard positive reviews.

@David Wilson I agree with the people that said to ask the landlord what information he is looking to obtain. Some thermostats can tell when a filter needs to be replaced. He/she could be looking for that info. Others now can detect when units are too loud which can be useful for apartment buildings. They do not record conversations but do record decibels to know if a unit was too loud at 3:00 AM every day of the week.

@Jason Galli Welcome. As a Bloomington resident I always caution people that Bloomington should be looked at as 2 cities. West Bloomington (Jefferson) is different from East Bloomington (Kennedy). Kennedy residents will try to argue that, but all of the numbers clearly show that Jefferson is better. Make sure you keep that in mind during your search. (I’m a Kennedy resident in case you think I’m just biased.)

With that said, the southwest-west portion of the metro is a great market. Expensive homes, but likely to hold value with strong school districts. (Eden Prairie, Edina, Minnetonka, Orono, Wayzata, etc)

Sounds like you have a good reference for an agent. If that person does not work out for any reason feel free to message me and I can recommend a few others.

@Jeffrey Tate If you are considering Section 8 you will likely have lots of demand. Feel free to fact check this but I believe the apartment building that burned down was being built as affordable housing and was 100% pre-leased. (I understand that affordable housing doesn’t necessarily mean section 8) All of those people will need other places to live. Maybe they stay where they currently live. Maybe they need to move for any number of reasons.

I agree with the others that if you’re looking long term this might be a great investment. As mentioned, so far very few residential properties have been damaged other than the apartment complex that was under construction.

@Andres Osorno The tenant would pay the agent. Or, it’s possible that the tenant’s company would pay the agent.

For example, my wife worked for a company that had her on a 2 year assignment in a different state. The company paid for an agent to help us find a house to rent. Since we were only there for 2 years we weren’t going to buy a place and since we were not familiar with the area the company recommends (and pays for) a local real estate agent to help with the rental search.

@Bruce Runn I agree. I like to have multiple qualified applicants. Would MUCH rather have a good tenant at $1,100 per month instead of a headache at $1,200. This current economy is proof of that.

@Desmond Fielding University of Minnesota? My wife got her degree in chemical engineering degree from there. I can’t help you on Nebraska but I wanted to say welcome and wish you the best of luck. The engineering degree will help you in multiple ways as a real estate investor.

@Bruce Runn I also agree with Bruce on the Twin Cities metro. For my regular, market rate units I receive multiple qualified applicants each time. Maybe my rent is too low. Ha.

@Tim Sipowicz It is a good strategy and one that I used. It is a great way to slowly build up a portfolio since you only need to put down a small percentage and you can get strong financing with 30 year amortization. Here is my personal example, and I hope you do much better than I have done:

In December 2007 I bought a condo as my primary residence for $105k. Bad time to buy and I also made a dumb decision on what I bought, but as you’ll see I did overcome that.

In May 2015 I bought a single family home for $140k and moved. At this time I kept the condo and turned that into a rental property. Despite being very underwater on the mortgage I was able to break even on the cash flow mainly because of the low interest rate and amortization.

In November 2017 I bought a different single family home. I kept the prior single family home.

In November 2019 I sold the first single family home and used the proceeds, along with cash, to purchase a 4-unit property.

As you can see, this strategy has worked out well for me. However, it is a slow strategy. That’s fine by me. Through just this strategy, I now own the home I live in which includes a mother-in-law suite that we rent out, a condo that is slightly above break even now, and a 4-unit property with strong cash flow.

(In July 2012 I also bought a condo as an investment but let’s ignore that as it isn’t part of the primary home timeline.)