All Forum Posts by: Derek Earl Burington

I'm local investor in the TC. Feel free to reach out to me if you have any questions!

Good luck on your new endeavor.

This is a horrible idea. All this is going to do is drive investors out of the city, thus driving up rental prices as fewer will be available. Simple supply and demand issue.

Instead of doing this, they should have incentivised builders, developers and investors to create more affordable housing units through tax benefits.

This is not going to create more units, it's going to have the opposite effect!  

Next thing they do do is to put in rental control, to bring the housing prices down. This will have the same effect...chasing investors out of town!

There's a reason I dont have any units in MPLS. This just confirms my thoughts about investing in MPLS!

Ok, so I'm up against a wall here. This is the first time in my career that I've been in this position. I have some hurdles to cross and I'm looking for some input.

Hurdles:

* I have 6, maybe 7 units to fill in the coming 6 weeks.

* I have 4 rehab projects going on currently.

* My banker, just informed me today that they no longer refinance projects, within the first 12 months of ownership, as long term holds. Meaning they will only finance 80% of cost (acquisition + rehab), instead of 75% of LTV (appraisal value).

My questions:

* Where do you advertise the most efficiently?

I normally use FB Marketplace and Craigslist, but with the need to fill 6 or 7 in 6 weeks, that's gonna be time consuming!

* Does anyone have a suggestion for a bank that does not require 12 months of ownership, before lending against value vs cost?

I'm not over leveraged at this point, but I would like to get my money back out of these rehabs. If I cant, I will have quite a bit of my money tied up for the next 12 months.

PS. I'm in MN

I dont invest in MPLS proper, but I do invest quite actively in the surrounding area. 

With the market the way it is right now, it does take some patience to find a good deal. I'm still currently active, in fact, I have added more units to my portfolio then any other year, so deals are out there to be had.

I would always be happy to connect. I just discovered the local forum today and hope to attend some of the meetups.

First off, why are you talking g to your age t about interest rates?

You should be talking to a lender; whether, it be a personal banker or a commercial lender. Personally, I would own the property in an LLC and talk to a commercial lender. There are Pros and Cons to carrying it personally (many people would tell you to carry as many as you can through Fanny and Freddie , because you typically get bett rates 30 year Ams), but personally I prefer to deal on the commercial side of things.

I would reccomend that you reach out and get to know some local commercial lenders and see what they can do for you for loans.

You should be able to get something between 4.5 & 5% ammed out over 20-25 years.

I would encourage to not talk to your agent about loans. Use them to buy and sell homes, not to finance them!

Eric

I believe what Arlan is referring to is that you should always factor in a management fee, when factoring costs and trying to determine a correct purchase price.  I understand that you are managing it on your own; however, some day you may choose not to, so you should take that cost into consideration.  Also, he is correct that you are not factoring in Maintenance or Cap-Ex.

I agree with Arlan, that this does not look to be a good purchase.  

I applaud your eagerness to get into this field; however, I would encourage you to do a little more due diligence the next time you're analyzing an investment property.

Good Luck!