All Forum Posts by: Noah Chappell

@Kurt Kleespies welcome and thanks for the explanation. Hopefully what you can do is find a local credit union or community bank that is willing to lend via portfolio loan on their books based on the strength of the asset and considering the income from your other business. You probably won't get Freddy/Fannie financing due to the strict requirements. I work with a credit union who gives 15yr term, 25yr am, does cash out refi up to 80% LTV and will refinance in less than 6mon. It wouldn't be useful to give the name bc they only lend locally. My point is you may need to cold call 15-25 banks, ask for the business dept and explain your situation. Eventually you will find a bank who will understand, especially if you prove to them you'd like to have a long term relationship.

@Andy Bartel hi Andy and welcome. If you ask some specific questions myself and I'm sure others would be happy to chime in to answer any questions we can. Good to have another investor around. Hope to meet you in person when these meetups start again! 

@Aloysius Gunawan unfortunately the NE would produce about as much cash flow as Denver or Brooklyn, which is to say not much. It's the hottest neighborhood right now. My friend just bought a 2/1 SF for 400k. I'd look in contiguous areas next to these nice ones that are "coming up" or "in the path of progress". 

@Aloysius Gunawan congrats on wanting to invest in this incredible market! I've got some good people I've worked with, but looks like others have covered that. In terms of where to invest, I assume as an out of state investor you're looking for cash flow. Minneapolis / St Paul is red hot right now, but there are still deals that meet the 1% rule or better. Your challenge is to find deals with adequate cash flow that are in acceptable areas (crime wise, etc) and that take advantage of this metro's appreciation. Hennepin County has appreciated more than Ramsey. Both have very low vacancy though I've seen units rent faster in Minneapolis. I'd probably look in the Near North neighborhood just under N Minneapolis and NW of the North Loop, N Minneapolis a little more N along the river, Prospect Park area might be ok but don't see many deals over there and driving through business seems a little depressed..., I really like Midtown Phillips just S of downtown btw Uptown and Seward, just N of this N of Lake St getting near Powderhorn park is nice but gets pricey. In St Paul North End Neighborhood is nice and working class, West St Paul is similar but somewhat nicer, Frogtown has high cash flow and is good for sec 8 rentals but a little rougher.., Payne Phalen is perpetually "up and coming" and is not my favorite... Just some thoughts of top of my head! 

Fascinating topic, you can judge markets by many metrics but I like how this is done using total return. I also love to see Minneapolis on the list. I'm aware we've got one of the nation's lowest vacancy rates, which I've enjoyed personally as we're able to fill units nearly immediately asking market or low market rents. 

@Zach Haggstrom congrats on your properties. If buy and hold is your thing but you're also interested in management and business why not begin by building systems to manage your own properties efficiently then expand this business by taking on other investors' properties while at the same time expanding your own portfolio. That would be a powerful strategy. 

@Jimmy Lieu congrats on being ready to jump in! Don't mind the pandemic, etc, in RE it's always a horrible time and the best time to buy depending on who you ask. The one thing I'd be careful about is not self sabotaging by telling yourself you're going to go hard core and then regretting it later on. You want to set up a life that's sustainable. It's one thing to say you're going to move to a brand new midwestern city and house hack, the excitement can propel this, but another thing to have moved there, be living in a distressed house in a not so great part of town when the snow hits in December, feeling lonely, tenant problems, etc, not an equation for success. 

My point is choose a slower rate of progress that is sustainable all day over a plan that is more aggressive but will make you stop dead in your tracks because you're miserable. 

Remember, even if you invest from afar you're going to be tied to that place forever, even if its just a visit a year, so I'd recommend loving or at least not hating the place you invest. 

If I were you I'd focus my time/energy in finding under priced off market deals in your current market or maybe a peripheral market 1 hour away. You won't find them on the MLS, but trust me if you search in a systematic way on a daily basis by connecting with wholesalers, etc, you'll quickly find more deals than you can take on.

Anyway, thats my 2 cents, good luck! 

@Wes Sherwood congrats on these two stabilized properties in great markets! Sounds to me like your focus is mainly cash flow. Assuming you don't have any immediate need for the equity in these properties, I might try to refinance both of them into brand new 30yr mortgages at sub 3% interest rates (no cash out). This way you monthly mortgage payments would be reduced and you might hit your cash flow goals, while hanging onto these stabilized assets in high appreciation markets. 

Regarding 1031, selling these single families wouldn't be a problem in this market, it's finding another better or even equivalently good property in this red hot market that'd be the problem.. especially as an out of state investor presumably investing in the med west without local knowledge and relying on the MLS.. My cousin invests in Columbus from Manhattan and we've had a tough time finding him even 1% deals on the MLS..

@Ward Sorrick sounds like you have a decent situation with this 1m asset. In investment profit is primary consideration, but in RE being a good human being is a close second. If I were you I'd keep the property and perform rental-grade repairs as they come up, raise the rents to low-mid market, do a cash out refi at historically low rate for 750k and put this into another property locally or out of state. Always best to aim for a larger portfolio if you can handle one as here you'll benefit from appreciation across multiple assets. In this example your nice tenants will continue to enjoy your home as well. 

@Tristen M Walker I would start by thinking about the types of investments available to you and what returns they might produce. A good index fund historically produces around 8%/yr. You probably want to aim for a higher return than that in RE or it's not worth the considerably greater effort required. Unless you're looking at crazy appreciation, I'd need to have at least 8% cash on cash return and at least $150/door/month, otherwise other assets might give a similar return for much less work, and with less cash flow you're unlikely to get near financial freedom anytime soon. Hope that helps.