All Forum Posts by: Corey Hawkinson

@Devin W. Some larger complexes are going to these types of systems. It makes sense. They want to allow dogs and can’t punish every dog owner when 1 doesn’t pick up. I do wonder if better camera systems would be cheaper, but maybe not.

@Toby Khan no experience with appealing, but you’re making me feel better about my $500 increase on a 6-unit in Dakota county.

@Maayan Cohen This will sound weird, but give me a chance to explain... in my area it will typically make sense to avoid the top school districts for real estate investing.

Top school districts seem to matter more for home buyers than to home renters. Therefore, a home in the top school district might cost $100,000 more, but only bring in an additional $200 / month in rent. I wouldn’t pay $100k to get $200/month.

That’s just single family homes. For apartments, the majority of renters typically will not be families. So they won’t care about school districts.

With all this said, you also don’t want to be in the worst school district, but that’s not because of the school itself. That’s because of the other things that come with bad districts like crime, etc.

All this comes down to the numbers for me.

@Bryan Berrios That’s really the question we’re all looking to figure out in our own way, even if we don’t officially calculate it. For example, I believe that stock investing would include an average return of 7%. So for me, I want real estate to return at least 10% to justify the added work above simple stock investing.

How I get above 10% is the fun part. Leverage certainly helps, plus finding properties that fit my expertise. Long story short, I hope you find ways to invest in real estate that give you much higher returns than the stock market.

Note for others: I’m not trying to argue on the correct percentages.

@Mike Young I’m not sure that I see your concern. If the inspection includes issues you will want to share those with the selling agent and seller if you have a plan to get the price knocked down. Personally, I am not a fan of this tactic unless there is a serious issue that the buyer would not have been able to see, but either way, I’m missing the harm of getting the report to the seller. Help me see what I’m missing.

@Brandon Klunder If you’re looking to research more this is known as AirBnB Arbitrage. It has become a popular strategy. You’ll find very differing opinions on this site.

@Faustin Hoover You can also check your state’s bar association. My state posts a lease for free online. (Though I recommend adding to that lease for other items)

@Michael Ludwig Others have defined it perfectly but I’ll use an example based on your St Cloud location for the 1% rule. If I were to invest in St Cloud I would need the numbers to be above 1% due to added risks that I see in your market. (Others might disagree with me, and that’s ok) I do like the St Cloud market, I’m just saying that I would want to be at 1.5% on a property in order to buy.

As you get closer to the Twin Cities the numbers change depending on the area. An investor in North Minneapolis will need to be at 2% to make the property work based on the metrics in that sub-market. Higher risks based on the tenants. Personally, I avoid that sub-market entirely.

However, if I’m looking in Edina I could come out ahead if I’m less than 1%.

I say all this to illustrate in the Minnesota market that these rules can be good starting points but you’ll need experience to understand how to apply the rules.

@Sergio Palmero Hopefully you’re involved with a few local real estate investing groups. Ask there (or here) for local commercial banking recommendations. Ask them what it takes to get a small commercial loan for something like this. Typically there is a lot more variation in what is needed to qualify so talk to a few banks. The loan will be very similar to a residential but will likely have 2 differences:

Shorter amortization of either 20 or 25 years instead of 30.

A rate reset period, or balloon, after 5, 7, or 10 years. Most banks don’t actually expect you to pay the balloon. At that point you will refinance into whatever interest rate is the market rate at that time.

@Chris Kelly Thanks. That’s solid advice.