All Forum Posts by: Jeff Schemmel

@Sam German hey man!  hope you're well.

I would present a few options...

3 months and 6 months, at rates that protects you against your assumed vacancy risk.  It's normal to upcharge for short term quite a bit.  maybe consider getting what would be 4-5 months or rent on a long term lease in 3 months.

lastly, I would just say that with either of these options tenant allows landlord to show the unit and market it during their notice period OR tenant agrees to find a qualified applicant to replace them if they want flexible move-out on either the 3 or 6 month option.

Something to consider.  of course, not legal advice :)

@Dan Pryde get an attorney to both write it up and counsel you on how to protect yourself.  Talk through, in detail, what amortization, interest rate and what portion of the payment made to the seller goes towards principal pay down vs. interest.   Balloon payment term matters a lot, and you may consider writing in something to protect yourself if the rates are above a certain threshold to allow you to extend the contract should they go too high for comfort when balloon payment is due.  I also recommend discussing re-finance strategy with a good lender who knows investments BEFORE you write the contract so you're aware of your exit strategy before you're locked in.  Hope this helps.

@Ross Westendorf welcome to BP!  local house-hacker and multi-family agent,  here.  I like to double-dip with multi-family and make improvements while I live there.  Happy to chat anytime about my experiences.  Do you have a plan to finance or pay cash?  would love to hear about your experiences in contracting.

Shorties in suburban avenue in Saint Paul is my go to

@Zach Adams the MN bar has one online.  Homeline also has one posted.

@Corby Goade actually, below is true according to HUD. While I don't necessarily agree with it, and I think as a landlord you should try to manage your property the way you would if you weren't there, technically you can be more picky as an owner occupant.

What Types of Housing Are Covered?

The Fair Housing Act covers most housing. In very limited circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family houses sold or rented by the owner without the use of an agent, and housing operated by religious organizations and private clubs that limit occupancy to members.

@John Woodrich

I recommend just using the standard residential lease agreement, as stated above it offers the most reliable protection.  There are some things I add in an addendum.... house rules and such, or details about where to park, and since I have electronic locks a quick note about those.  Otherwise, that standard res lease should be just fine in my experience.

I'd worry less about the 3% cap.  there are multiple ways to raise it more than 3% if you read deeper into the rules and allowances around the rent stabilization policy.

Focus on making sure your criteria are met, and that's a pretty steep discount.  In my opinion, it's not a great precedent to set out of the gate that you're willing to concede to what they want; that can create a situation where they continually take advantage of you while locked into a lease.  the rent is the rent, and it's due on the 1st :)  I get $1,500/m for my 2 bed in saint paul and I purposefully chose to be patient and passed on quite a few people before I chose the right one - definitely dodged some bullets in the process.  I just renewed their lease for another year.

Noise is inevitable, and any tenant you have will be annoying at some point... whether it's little feet running across the room, a treadmill, a rolling desk chair, or exercising.  We have long winters stuck inside in Minnesota and you're bound to be annoyed at some point so try not to judge up front who's quieter than who, it's just an impossible assumption to make in my experience - This is one of the things I've been most surprised about as a landlord.

hope this helps!

@Cameron Wutzke it can be impactful, but it depends on your rental model, location (rental values), and how much property taxes are for that area and that property before enrolling and when considering purchasing a property that IS already enrolled.  It's worth recognizing the rental rate caps aren't bad!, I don't enroll in 4D, and I get 1500/m for one of my units which is a 2 bed, which I believe is a pretty fair market rate, but my tenants definitely make more than the AMI requirement; which I think is the largest consideration when considering the 4D program.  I wouldn't let it scare you away, but just make sure you call them and really understand it first and factor it into your long-term deal analysis.  There is a N. Minneapolis duplex listed that's enrolled in 4D that's on market right now and reasonably priced at 300k for it being a mid-century side-by-side build; it could be a 1% property even while participating in 4D.  My guess is that it still goes in multiple offers this weekend - but we'll see!

Also:

What if I want to withdraw from the program?
For owners who want to reduce their level of participation in the program, the City offers an option after five years to approve a reduction in the
number of units per building participating in the program. However, at least 20% of the building must maintain participation in the program in order
to meet the conditions of the program.


Here's some detail:

Affordable housing criteria

Rent is affordable to households making less than 60% of Area Median Income (AMI). Maximum rents for 2022-2023 are as follows:

• Studio/Efficiency $1,233
• 1 Bedroom $1,320
• 2 Bedrooms $1,584
• 3 Bedrooms $1,830
• 4 Bedrooms $2,041
• 5 Bedrooms $2,253
• 6 Bedrooms $2,463
• Single room occupancy (SRO) housing, $739 per bedroom. This includes single room occupancy housing, rooming houses and group homes.

As units turn over, affordable units are rented to households making less than 60% of AMI. In 2022-2023, this means that units must be rented to households making less than the following amounts:

• $49,320 for one person
• $56,340 for two people
• $63,360 for three people
• $70,380 for four people
• $76,020 for five people