All Forum Posts by: Jeff Schemmel

@John Woodrich I assume you need to be on title to have a claim on depreciation, correct?

Hey @Naqib Hossain, if it's the property I think it is on concord blvd I am acutely familiar with it.  the calculator link is a tough platform from which to provide guidance.  I think if you shed some light on your goals, cash position, acquisition strategy, etc we may be able to analyze it further.  Lots of deals have potential, and these days (especially in saint paul) cash flow is created more than it's just flat-out purchased; most properties here look pretty bleak on paper as-is.  Based on what I know to be true, being a house hacker in saint paul myself, I have a pretty good idea of what areas this property could be in and whether your analysis of rental income and expenses is on target, but the greater context would be helpful to provide meaningful advice.

as @Joshua Stein mentioned, @John Woodrich is the best local recommendation I could give.  I personally use his services, although I am small time.  I know he's said a few times he's not taking clients but i'm sure he could nudge you in the right direction.

@Wendy Man

This is not necessarily advice, but I both supply it and take it up on myself to do snow removal and when I do that I apply salt myself and kindly remind my tenants that it's icy and to use the supplied salt liberally.

I self manage and I really believe in that. I'm also not one to ask my tenants to take care of anything like lawn/snow for a discount because I have my own standards for that sort of thing and I prefer to not rely on a tenant to do it and deal with the hassel when they inevitably do not take care of it. That's also a good amount of responsibility that requires attention and prompt planning. I also don't own a ton of doors so, like I said, not advice but just sharing my stance on this.

 Consider just being a realtor :) it's a lot of fun if you truly put your heart into it.  Wholesalers kinda operate behind a curtain, and people tend to think they're getting ripped-off.  If you're a no-pressure realtor and your actions show you are really looking out for the buyer/seller best interests you'll do well and build a great reputation.  To me, that's more important than anything even if it means waiting a bit longer for a paycheck that's smaller.  Not everyone is willing to accept that last part, and it's definitely not quick money being a patient realtor but it sure beats trying to talk people into things and sitting behind a phone/desk all day.

@Jackson Mertes make sure your broker is ok with you doing this.  some brokers aren't ok with their agents being PMs; a liability thing.  hope they say yes, this is a niche I think is pretty lucrative.  I've been asked many times for a PM referral for STRs.

Hey @Kurt Johnson you're in the right place.  I sent you a DM to connect.

I started house hacking in Apple Valley.  I purchased a condo with a 5% down owner-occupant loan, one which allowed rentals, and I rented a room to a friend for half the cost my mortgage.  This was a significant cost reduction for me, and my friend (who I trusted) also benefited in the same way.  Rentals at the time for a 2 bed 1 bath with a garage were ~$1,200+ per month, so on top of earning equity, I was saving about $700/m.

Fast forward two years, I was able to net about $18,500 from the sale of that condo, for a further gain of about 750/m approximately.  That makes my total wealth building somewhere around $1400/m for two years.  that's a HUGE benefit, and that check got me into my first duplex.  Fast forward another nearly two years, and i've got significant equity, on top of earning over 30k in rental income during that time with no cost of living increase.  The wealth snowball they call it.

Anyway, i'm confident you can do this, and i'm happy to discuss it and the shifting market anytime.  I have plenty of data we can look through from sale price, showings per sale, foreclosure rates, the job market, etc so we can discuss it.  One thing I recommend is a book by Bigger Pockets' J. Scott called Recession-proof Real Estate Investing.  I have an extra copy, but you can easily get it on BP or amazon, etc.  It's a quick read and gives an extremely experienced perspective on different economic cycles (real estate and otherwise) that affect real estate.  Highly recommend many BP books, but this one is best suited to answer your question.

@Jeremy Host I'm happy to meet up and share my thoughts, sent you a DM.

Deals can be found on the MLS or OFF-market, but it depends on what you're looking for! If cash flow is the focus, interest rates are putting a lot of pressure on that right now - it's harder than it was a few months ago to find something that makes sense at face value, especially if you're a non owner occupant; this is putting pressure on sellers throughout the metro. Cash flow is often created, not purchased.... at least this is how I think about it in my head after learning first-hand. In my current duplex, I started with a goal of 250/door cash flow when I moved out, and I'll end up with nearly double that after doing some work to achieve this. The deal didn't look great when I bought it, but I had a plan to make it great after 12-18 months. I focused my energy not on how it looks now, but how to make it great later. This isn't the only way to make money in this business, but it's the way I chose because I wanted to live here, and I'm a bit handy and could do some work myself.

I often ask about goals first, and it would be helpful to know yours to provide some solid advice.  If you're fishing for cash flow, are you looking to house hack or buy and hold and not live in it?  If you're a little handy or willing to learn, I'd guide you to find something now that needs some work that you can improve a little over the cold season, and rent for top dollar in the spring when the rental market heats up again.  I'd also tell you about different approaches to renting to achieve better returns based on what your goals were and what you were open to.  Lastly, it really matters what purchasing strategy you use to buy the deal, and I would also ask if you've found a lending partner to work with who can provide advice.  If not, that is easy to accomplish and there are several local lending experts I am happy to recommend who are also investors and know how to start and scale.  A savvy investor-lender will help you find paths to entry that you may not have found on your own.

Hope this helps, man!  Reach out anytime.  I could go for hours.

@Joanne Kinney I like your plan!  My friend @David Walbolt is an architect and may have some plans for a triplex drawn up that you could talk to him about.  My opinion on the first logical step is to get plans for what you want to build and to make sure the numbers work for you (build cost vs. rental return).  Then, I would look for available lots that will both allow your building and conform to the build plan.  That will be easiest with a realtor who has demonstrated experience in the land-buying niche.  This person should be able to provide insight into how to prepare for building, have land to show you both on/off the market, and talk you through the steps needed to develop it, and connect you with local builders who have demonstrated success building small multi-family.

One step at a time, although I would really get into the rental analysis on this one.  Building is expensive, and you need to know you have both the rental pool and the income potential to have it make sense.  House hacking makes it a lot easier!  

@Eric Hempler up to a certain % that's the process as I understand it.  It seems they focused on trying to prevent tenants from being booted for profit increases.  My interpretation of it is, if tenants leave on their own accord there's no way for the city to really enforce anything with increases even though they say the policy still affects that scenario - at least not realistically.  Tenants can dispute an increase if a landlord tries to just increase the rent on an existing tenant, and that's what makes some of these properties in saint paul listed with long-term, under-market rent, tenants a tough sell.  I could see some non-owner-occupier investors buying those types of properties and using cash for keys to get the tenants out...do some rehab (which enables them to increase MORE than the limit if approved), and get the rent up that way.  I'm not one of those investors, but I am sure this is happening to some degree, those properties are taking a long time to sell and buyers have much more leverage than they did last spring.