All Forum Posts by: Dan Coleman

@Austin Hendrickson you don’t need to add language to the PA. Im not a lawyer and cannot give legal advice on what is a best practice but in Minnesota Purchase Agreements, are assignable and don’t need added verbiage to be wholesaled. You can sell the PA to whomever you want it’s not illegal as long as you meet all the performance requirements outlined in the PA. Being transparent and having everyone sign off on what is going on is not a bad idea. If you're marking up the property substantially a double close using short term transactional financing might be more private.

@Jon Radlinger

-Welcome to BP! I’m a Landlord/Agent in the Twin Cities are I have 20 units. I could help you get started  if you wanted help. PM if you want to grab a coffee.

Dan Coleman

I would recommend not to do an evection being this is a family member. Its a loose loose for you either way but if you file for evection, it will be on here record and it takes some time to get that removed. Then it would effect her ability to find a new place with a housing  blemish.

Cash for keys and then change the locks. This will actually cost you less than filling for eviction and you can Thanksgiving and the Holidays without drama.

@Eli Sunderland

@Gregory Brooks

- By definition multi-family buildings 1-4 units are considred residential real estate. With that it does fit FHA standards. But FHA loans are designed to help the owner occupants own Single Family houses. 3-4 plex building are generally investment vehicles and have more deferred maintenance, these issues frequently get called out during appraisal. Condition is a huge factor with FHA, especially paint. Simply having chipped paint can stop the loan process. And in the language of the loan, FHA loans cannot be used for investment purposes. Underwriters are picky because the loan needs to be able to sell on the secondary loan market.

My point is factoring in, condition, underwriting and the fact that the loan is not to be used for investment purposes. It's not the most ideal loan product because the interpretation of an investment property is very subjective. Most lenders don't want to see multifamily properties financed FHA because there is a grey area. Especially 3-4 units they get more push back.

Underwriters will question why you're moving from one duplex to another but would not blink seeing someone move from a single family house to another single family house. The formal standards of FHA says yes multi-family fits the guidelines. But when you break down the loans small print, the loan is designed to exclude investors/multi-family properties from using the loan product.

@Eli Sunderland There are deals to be had especially in the multi famliy space. The catch is these deals do not fit with in FHA guidelines. The numbers work better with each additional unit the building has. The cost per unit goes down with each unit the building has as well. I'm bias on 4plex buildings but for House Hacking with FHA financing, a 4plex will perform better than the other residential options.

Kyle,

If I would chime in on your approach you have a pretty wide net you are casting with all the cities. How will you know what a deal looks like?... The answer to that question is it will be difficult, deals will pass you by because you were not able to identify them. Focus on evaluating neighborhoods not cities.

Dan

Ben,

First off welcome to BP! The one differentiation that I would like to point out is not to confuse investing with your personal residence. House hacking is still a personal decision and a property that is 1% or 2% properties especially in the under $250,000 price point are most likely properties in transitional neighborhoods i.e. not the best locations. Granted FHA is a great way to go for a first purchase but you still want to be mindful that a house hack is not a pure investment and if you evaluate just by the numbers you may not want to live where the numbers will take you.

For your first purchase especially one you plan to live in for 5 years; I would scrap the investing lens and just evaluate in terms of what you want in an ideal living  situation. On your next purchase once you have some Land lording experience then get into numbers and returns.  

Welcome Traci! If you ever want to grab a coffee and talk shop, private message me. I would love to help or just connect.

-Dan

Wil,

I invest in S. Mpls and Saint Paul. If you would like to grab a coffee and talk shop let me know.

Dan

Welcome @Christina Wrightsman! Im an investor in the Twin Cities area if you ever need a resource feel to message.