All Forum Posts by: Eric Beise

Hi James,

In addition to what Tony said, there are a lot of different programs for first time home buyers. Several of them will allow you to get into a home with nearly no money down. With that said, there is usually some sort of trade off. Usually what I see is a higher interest rate, way higher PMI, or some sort of payback program. If you factor everything into your numbers as you evaluate properties, this isn't a big deal. If you don't, it ends up eating all of your profit.

One other thing, if you are planning on investing in the Twin Cities Metro, having a 203k or 1% down loan of any kind will likely be a yellow flag for a potential seller. The market is hot enough that a lot of sellers are receiving multiple offers, and the type of loan the buyer is using will factor into their offer acceptance decision. 

Hi Nick,

First off, it's encouraging to hear you are thinking through all your different options! That makes me think you will be a long lasting investor! 

As for your questions, if you can qualify for the loan (which it sounds like you can), and have a good understanding of what you will be able to charge in rent in a particular area, you know the numbers you will need to hit in order to make it worthwhile. Use some sort of deal analysis such as the BP calculators or a spreadsheet (I can send you the one I'm most fond of, and use daily). 

The numbers on each deal will determine if the property is too expensive or not. Using a conservative approach to estimations in your analysis will most likely protect you from getting into terrible deals, regardless of what the rest of the market looks like. Might you wait a year and get a better deal? Sure. Might you wait a year and only see prices rise? Sure. The point is, don't speculate on where the market is going, buy for cash flow knowing appreciation is a bonus. If a deal cash flows to an acceptable amount for you, then go for it. With buy and hold as your strategy it rarely makes sense to try and time the market. Analyze each deal individually. If you buy with the intent to hold, it only matters that you buy with good rental numbers. Having a good deal is better than waiting for 5 years to get started and finding a great one (mostly because you will hopefully be in a position to buy the great one in 5 years too!)

As for your comments about what you want to buy, I think you will be disappointed in what is available for $200k in the multifamily market. Usually you will either be in a below average area, have a decent amount of using to do on the property, or both. That's not to say you won't be able to find something, it just won't be easy. The best thing you can do to set your expectations is to go look at a bunch of places with your realtor. After a while you'll get a good gauge of what various price points will get you. 

Hi Katherine, 

To answer your question about house hacking - that is where you live in the property (or part of it) while renting out the rest. This allows you to get really attractive financing options (think lower down payment, better interest rates...) and potentially boost the return on your investment. 

I would love to talk with you about different investment strategies, and what would make sense for you in the Minneapolis market. As both a personal investor, and a real estate agent I could get you started and make sure you are pointed in a winning direction.

Hi @Dylan Beckwith,

Similar to what Jake said, the best way for you to get started is buying a property and living in it, renting out the other rooms (I'm a little biased, because that's what I did). It will give you a feel for everything you need to do as an owner, and property manager, and since you already need to have a place to live, you might as well own it and have other people pay you rent. You can do it with a multifamily property, but also with any SFH as well. It all depends on your individual situation.

There is no reason why you can't get into the game while still in school, it just takes some extra grit. Judging from the fact you are soaking up BP podcasts and posting in the forums, I would say you have it. 

As for your questions on location, there are plenty of deals to be had even in Minneapolis. The great part about the Twin Cities area is that, while home prices are relatively high, rent is also high and vacancy (your biggest potential expense) is very low. Because of the programs available to you as a first time home buyer (who will owner-occupy), I would strongly suggest buying your first property somewhere you want to live and testing the waters as a live in landlord. If you want to meet up and chat more about various avenues towards investing, and what might work for you, send me a message! I love passing on my knowledge with people that have your level of drive!

@Chris Baker First off, I want to encourage you in the way you are starting. Getting a solid base level of understanding is a critical step to success! Nice work!

My advice would be to start by figuring out exactly how much time you are willing to put into this. That will really help you decide on what sort of real estate investing you want to do. 

I would also challenge your assumption that you would have to invest in an area outside of the metro area. There are deals to had in the Twin Cities, it just depends on if they align with your strategy. 

If you are interested in meeting up and talking strategy, I am totally willing to share my experience and market knowledge. Feel free to message me.

Hi @Christine Grimley and welcome to BP! If you are interested in meeting up and talking about how I look for and analyze deals I would be willing to find some time. It seems like you are doing all the right things, keep up the good work!

Hey @Jason Doerr I'm in south Minneapolis and love talking about real estate in any capacity. I would love to hear more about your story, talk through were the pitfalls were in your last deal and offer you help getting you connected with any resources to help you succeed in your next real estate adventure. Let me know if you want to meet up!

When I am working with clients looking to purchase a primary residence, one of the first questions I get asked is either, "what school district is this property in?" or "how good is the school district?" When thinking about how a property might appreciate over a 10-15 year period, and how recession proof it is, I how found that school districts are a top 3 factor if not the #1 factor. There are obviously niches where that isn't the case, but a good school district is going to give you just about the best protection you can get. To have the lowest risk, the goal isn't to have the most unique property, it's to have the property that appeals to the highest number of buyers.

Welcome @Andrew Mickelson! Once you feel like you have a decent grasp on things via the podcasts, let me know if you want someone to chat with about dreaming for your investment future! If there is any information you want to see about the local market I can provide that for you as well. Best of luck in your learning and investing!

To make things more practical and less theoretical, I can provide you with what I do for my SFH rental.

I bought a 2100 sqf 4 BR 2 BA house that is 100 years old. I know old properties cost more to maintain and that none of the appliances were new within the last three years, so instead of using the $190ish outlined in the table @Rich V. referenced in Brandon's article, I up mine to $260 a month. 

Hopefully that helps!