All Forum Posts by: Matt J.

In addition to what Paul mentioned about potential restrictions on AirBnB and John mentioned the limited licenses allowed in Duluth for vacation rentals, you also have to keep in mind that when a downturn in the economy occurs, the first place people cut their spending is on vacations. If you can swing the payments without the level of occupancy you're achieving in a strong market, then I'd say go for it. 

I agree with a lot of what Jennifer mentioned in regards to location. Brainerd Lakes, Alexandria, Grand Rapids, I would say anywhere that has a Zorbaz, you're probably going to have a pretty easy time renting it out. Zorbaz has their locations where they are for a reason, right? 

I've had some discussions with Tony Rafferty. He works with some private money investors who invest in real estate. You can find him on LinkedIn or PM me for his contact info. 

Is it in Duluth city limits? If so, would be hard to do Air BnB but if not, that could be a good option.

Just want to bump this thread back up. Currently I have 3 places in Duluth and they are cashflowing pretty well, but I figure Rochester would be a better appreciation play. Are there any investors down in Rochester who have real estate agent and property manager recommendations? 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $115,000
Cash invested: $28,750

This was a property that had been listed earlier at $155,000, but the seller wanted it gone. I think he had some trouble tenants and wanted to move on from landlording. He evicted two of the units, fixed them up, and listed the property at $125,000. I offered $115,000 and was able to close. I still own this property now.

What made you interested in investing in this type of deal?

I live in the Twin Cities, and properties here are a little bit more expensive than I could afford. I attended college in Duluth and new it was a good place to be a real estate investor due to reasonable property prices and higher-than average rents.

How did you find this deal and how did you negotiate it?

I found this deal through my agent, offered $10,000 less than list and closed. There wasn't a lot of negotiating required.

How did you finance this deal?

Conventional financing through Northstar Bank in Duluth.

How did you add value to the deal?

I replaced an aging boiler, repaired the roof, a door and a few other things.

What was the outcome?

After closing and getting the property leased up, I refinanced to take out some cash towards the purchase of another property.

Lessons learned? Challenges?

I learned to overestimate repair expenses, vacancy rates, and CapX. The challenge with this property is it's not in the greatest neighborhood, so finding solid tenants can be a challenge. We've had one cash-for-keys situation already.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Jordan DeCaro was my agent, and Steve Raj was my lender. I'd recommend them both to anyone.

UPDATE: I should have posted this earlier, but we had to reschedule this so we could make sure our speaker was able to attend since he's a busy guy! This will be taking place 3/27 and not 3/20. Please share this information along. 

Thanks,

Matt 

I tried to message all the attendees, but BP only lets me contact 10 people per hour. Please spread the word about tonight's event being postponed. 

Good afternoon everyone,

Due to the poor weather conditions, Tim and I have decided to postpone this meetup. We don't want anyone driving unnecessarily in this weather so we are working on rescheduling this meeting. Sorry for the inconvenience and we hope to see you at the next one.

Be safe out there,

Matt

Welcome, Kalli! If you're looking for an agent, Jordan DeCaro has been pretty great for me. I have a triplex in Lincoln Park and it has appreciated since I purchased it in 2016, a decent amount. I also have a single family on 4th Street, near Portland Square. The great thing about Duluth right now is you can get into a property for relatively cheap, but the rent is high enough to make it lucrative. I also started working with Heirloom Property Management and have heard good things about them. 

So I guess to answer your question, I think investing in Lincoln Park makes sense, as property prices are low enough for someone to get started. Ideal tenants? Yeah, not so much but I have had some pretty decent ones so far. 

Best of luck to you!