All Forum Posts by: John Woodrich

I presume you are looking to contact the owners to potentially purchase the properties.  The county sites list the taxpayer address and as mentioned above they don't change them frequently.  Some counties wait until the end of the year to change the online listing (think Chisago is like this).  When asked why they said they want to leave it as the person who was mailed the property tax statement....  Didn't make sense to me.

What you could do is look at Zillow or other means to see if the property was sold or if it may have gone through foreclosure.  That may give you an indication as to whether the address listed is correct.

Welcome Zach!  There are a lot of people to network with in the area and a lot of people willing to share experiences and help out.  Feel free to reach out to me if there is anything I can help with.

In case John's advice wasn't clear, he is saying drive around town to look for places to purchase.  Every property is for sale, it just takes enough money to buy it.  I would call Mankato a pretty big city, down there you will have to determine whether students are your target market or if you are looking for other residents.  Students may bring on additional criteria to consider such as are normal leases 9 months, damage deposits, etc.

I would talk to someone who invests in that area, I can't imagine a rental license being hard to get...  A rental license typically requires a home inspection looking for code compliance and safety issues.  These should already be addressed before applying for a rental license.  Townhome and condo associations can restrict rentals but I haven't come across it with any cities.

I will "3rd" the advice that Self Directed IRAs can work but I would avoid it if possible. There are a lot of tax traps and self-dealing issues and there is a LOT of bad advice on BP about self-directed IRAs. Just because someone is doing something doesn't mean it is correct. An IRA is a retirement account, if you have enough money in a retirement account where you can invest in RE and if you plan to use ALL earnings for retirement purposes, it is perfectly fine. You cannot pay yourself a wage or use an IRA for current income purposes which is where many people on BP fail.

If you have a good enough deal a hard money lender may bite. 

You can also setup a partnership and have individuals contribute money to invest with your but if you get to the point of raising a lot of cash you may run into securities regulations and you may need accredited investors.

As Dan mentioned, inventory and demand both seem to drop in the winter months.  Prices come down a bit, it takes longer to sell homes and harder to find them.  I have also sold houses in the winter but would prefer to avoid it if possible.  I rushed a house that is closing tomorrow because I didn't want it sitting on the market.  May have lost a couple grand negotiating but I could lose that quickly if the house sits for a few months.

Market is pretty easy to figure out in the winter - There are less houses for sale, less buyers in the market, houses typically take longer to sell and prices are typically reduced.

I wouldn't avoid listing a house for sale in the winter but it is not typically a seller's market.  

I do like the winter for purchasing houses in the winter though.  A motivated seller may be willing to take a haircut to get out from under a house that has sat on the market for 2 months without any offers.

Looking good Suzanne!!  Wish my properties were this close to completion.  I am in the middle of two small houses right now but we are in the demo stage.  They are going to be rentals to provide more cash flow towards my flip properties and a winter vacation!

I can't comment on the area but in general I think I 5 cap rate is low however your risk is lessened with your parents living there.  The 10% tax is typically considered a "lodging tax" - many states have them and I wouldn't look at that as writing on the wall by any means.  Localities can pose the tax, it is typically paid by out of state customers, so they charge it.

Good luck if you pursue the opportunity.

Please let us know what information you are looking to get and we can try to help.

Hi Nicholas,

I work in Brooklyn Park but our firm has an office in St. Cloud.  I have driven there for client meetings in the past but depending on the circumstances a phone call or other means is sometimes easier.  I personally invest in residential rehabs with an objective of flipping or buying and holding depending on the terms of the deal and the market.  On the tax side I have a masters in tax and my largest single family investor in MN has over 100 properties.

If you are interested in a phone conversation feel free to send me a message and I will reach out to you.  

Thanks,

John Woodrich

PS - I also know about filing a form 3115 for a change in accounting method to correct a problem when prior depreciation hasn't been taken.  Easier to discuss on the phone.