Archive for November, 2008
Minneapolis approves $5.6 million foreclosure plan
From the City of Minneapolis Website-Nov 21, 2008
The Minneapolis City Council and Mayor R.T. Rybak approved a spending plan Friday, Nov. 21 to use $5.6 million in federal Neighborhood Stabilization funds to acquire and redevelop foreclosed properties in neighborhoods hardest hit by foreclosures.
The funds are the result of the Housing and Economic Recovery Act of [...]
From the City of Minneapolis Website-Nov 21, 2008
The Minneapolis City Council and Mayor R.T. Rybak approved a spending plan Friday, Nov. 21 to use $5.6 million in federal Neighborhood Stabilization funds to acquire and redevelop foreclosed properties in neighborhoods hardest hit by foreclosures.
The funds are the result of the Housing and Economic Recovery Act of 2008, which was passed by Congress and signed into law in July to help state and local governments respond to rising foreclosures and falling home values. The funds are targeted based on the number and percent of foreclosures, subprime mortgages, and mortgage defaults and delinquencies. The City will now submit its plan to the U.S. Department of Housing and Urban Development (HUD) for approval.
The $5.6 million plan is focused around purchasing, re-developing, and rehabilitating foreclosed properties:
$500,000 will establish financing mechanisms to purchase and redevelop foreclosed homes and residential properties, including using soft seconds, loan loss reserves and shared equity loans for low and moderate income homebuyers. Contract for Deed or incentive programs geared to home homeownership will also be considered.
$1,464,800 will support the First Look Program, a new national pilot project launched in Minneapolis to coordinate the transfer of real estate-owned properties from financial institutions nationwide to local housing organizations, in collaboration with state and local governments. This funding will also provide value gap financing to partners to cover the difference between cost of purchase and rehab of property and final sale price.
$1,515,200 will be used to acquire vacant foreclosed properties that are not candidates for rehabilitation, demolish them, and hold them as vacant parcels until the market is ready to absorb new development of owner-occupied housing units.
$1,700,000 will be used to demolish blighted structures. To date, the City has more than 900 properties on its vacant and boarded list.
$420,000 will cover program administration costs within the City of Minneapolis Departments of Community Planning and Economic Development, Finance and Intergovernmental Relations.
Additional Neighborhood Stabilization funding guideline details:
* The funds must begin to be used within 18 months of receipt and spent within four years.
* No less than 25 percent of the funds ($1.4 million of the $5.6 million) must be used for housing low-income individuals or families whose income is below 50 percent of the area median income.
* Property rehabilitation spending may include energy efficiency and conservation measures.
* Purchases of properties must be at least five percent below current market value (based on a 60-day appraisal from the date of acquisition).
* Properties can be sold for only an amount equal to or less than the cost to acquire and redevelop such a home or property up to a decent, safe and habitable condition.
* Within the first five years of the program, any revenue generated from the sale, rental, or redevelopment of properties in excess of actual costs shall be recycled back into the City’s foreclosure program.
* After July 30, 2013, any program income must be returned to HUD, unless otherwise approved by HUD for eligible program use.
Nov. 21, 2008
City of Minneapolis Ordinance Change
The City of Minneapolis recently changed Title 12, Chapter 244 of the Minneapolis Code of Ordinances Related to Housing: Maintenance Code. That’s a mouthful, but here is the summary.
The community crime prevention/SAFE unit and the inspections division will be responsible for enforcement and administration of this new ordinance. If a there is a police call [...]
The City of Minneapolis recently changed Title 12, Chapter 244 of the Minneapolis Code of Ordinances Related to Housing: Maintenance Code. That’s a mouthful, but here is the summary.
The community crime prevention/SAFE unit and the inspections division will be responsible for enforcement and administration of this new ordinance. If a there is a police call (and probable cause) to a rental property in Minneapolis for any of the following violations (a conviction or arrest is not necessary):
- Gambling
- Prostitution
- Sale or possession of controlled substances
- Unlawful sale of alcoholic beverages
- Noisy assembly
- Unlawful possession, transportation, sale or use of a weapon
- Disturbance of the peace
After the first offense for any of the above violations, the city will send the landlord a violation letter. Within 10 days, the landlord will be required to submit a written management plan to the community crime prevention/SAFE unit. Failure to submit a plan can result in the revocation, suspension, or refusal of renewal of the Minneapolis rental license. These departments will work with the landlord and approve the plan.
If there is another violation at the same residence within 18 months of the initial violation, the landlord must again submit a “satisfactory” written management plan to the SAFE team within 10 days. The management plan must detail all actions taken in the last 12 months by the landlord to abate the original problem and to prevent further violations. Failing to submit a plan can result in the rental license being in jeopardy. Additionally, the landlord or his designee must attend a property owner’s workshop prepared by the SAFE team.
A third violation within 18 months after the 2nd violation will put the license in jeopardy.
If the landlord has a pending eviction action against the tenant or his/her guest involved in the violation or has issued a writ to vacate within 30 days, the landlord may submit the eviction documents to the SAFE team within 10 days of the reciept of the violation notice. If the eviction is being pursued “diligently”, there may be no adverse license action. Further, any adverse license action to revoke, deny, suspend or not renew may be postponed or discontinued if it appears the landlord has taken appropriate action to prevent further violations.
This new ordinance could have far reaching effects depending upon its use.
When Do You Start Leasing?
John dropped me a quick note asking me:
I have a tenant whose lease ends 5/31/09 for a SFH [single family house]…When would you start showing the house in order to have it rented for a 6/1 move in? Would you recommend striking a deal with the tenants on keeping the place in show condition or [...]
John dropped me a quick note asking me:
I have a tenant whose lease ends 5/31/09 for a SFH [single family house]…When would you start showing the house in order to have it rented for a 6/1 move in? Would you recommend striking a deal with the tenants on keeping the place in show condition or is that usually not a problem?
I try to start as early as possible, but 60 days is about the max that people are looking. Here are some of my experiences, depending upon the neighborhood:
- The “typical” tenant in some areas will be looking 60+ days in advance. I see this in South Minneapolis around the lakes. I also experience this when renting houses These same tenants will generally arrive at the apartment showing as planned.
- Other neighborhoods seem to thrive on procrastination. I will get calls less than 30 days in advance, in fact, I will get calls 1 week before they are looking to move in. I experience this often in both North and NE Minneapolis. I will book 5 people to look at an apartment and maybe 1 will show up.
As for “striking a deal” with the tenants to keep it clean, I just expect that they keep the place in order. Also, I work hard to show their place no more than 2-3 times per week to limit them being frustrated. I book everyone at the same time, just like an open house.
Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.
Investment Property 101 Seminar
[ December 16, 2008; 6:30 pm to 8:00 pm. ] Have you always thought about buying investment properties? Have you read all the books, bought all the tapes and watched all the infomercials, but still can’t seem to get started with investment real estate? Attend this FREE one and a half hour seminar. There is no charge at all, no contracts you sign with us, [...]
| December 16, 2008 | ||
| 6:30 pm | to | 8:00 pm |
Have you always thought about buying investment properties? Have you read all the books, bought all the tapes and watched all the infomercials, but still can’t seem to get started with investment real estate? Attend this FREE one and a half hour seminar. There is no charge at all, no contracts you sign with us, no consultation fees, no hidden agenda. The seminar simply will be an excellent opportunity for you to learn more about our process and meet a team of investment real estate professionals that can hold your hand through the finding, financing, buying, renting and owning your first investment property.
Let our experience get you started!
Register for the seminar by filling out this quick registration form or call 612-281-5419 for more information.
North Minneapolis Foreclosure Tour: The Investor Feeding Frenzy
[ December 6, 2008; 12:00 pm to 3:00 pm. ] Our last Investment Property 201 Event of the 2008
Every day we get asked where the best deals are for investors in the Twin Cities area. Hands down we have to say North Minneapolis. For several years now, the majority of North Minneapolis has been going through a transformation. North Minneapolis Crime is [...]
| December 6, 2008 | ||
| 12:00 pm | to | 3:00 pm |
Our last Investment Property 201 Event of the 2008
Every day we get asked where the best deals are for investors in the Twin Cities area. Hands down we have to say North Minneapolis. For several years now, the majority of North Minneapolis has been going through a transformation. North Minneapolis Crime is down, rental demand is strong, foreclosures are running rampant, and good deals are everywhere. Nice properties in nice parts of North Minneapolis are selling for $49,900, $39,900 and even $19,900.
We have put together a program for new and seasoned investors to capitalize on this perfect storm of investing and buy up properties that sold for up to $200,000 just years ago. Our team has assembled real estate agents, a general contractor, leasing agents, property managers, and the financing to make this a rare turn-key investment.
If you have ever been interested in the great opportunities in North Minneapolis, let us drive you around. This is a rare bus tour where we will drive you around the areas, show you both rehabbed houses and for sale properties. The tour will leave at noon on Saturday, December 6, from nearby Robbinsdale and will take approximately 2-3 hours. We handle parking, finding the properties, and logistics. You simply sit back and listen and see how so many investors are taking advantage of these great deals. Because of limited seating, a reservation is required. Contact us now!
Contact us now by filling out the registration form or call me at 612-281-5419 for more information.
How Busy is Your Real Estate Agent?
If you boil down all the slick marketing, the websites, the bus benches and the business cards with their pictures on them, Real Estate agents are just sales people. [Any real estate agent reading this, don't throw things at me]. We get paid by producing. Plain and simple.
Just like any sale profession, the better the [...]
If you boil down all the slick marketing, the websites, the bus benches and the business cards with their 
pictures on them, Real Estate agents are just sales people. [Any real estate agent reading this, don't throw things at me]. We get paid by producing. Plain and simple.
Just like any sale profession, the better the agent is at their craft [selling real estate], the busier they should be, and therefore the more successful they should be. In this market, if your real estate agent is not working his tail off just to keep his head above water with the volume of transactions, well then, I suspect he one of the following:
- Worthless. S/he is either too new in the business or has not developed enough experience to find solid investors.
- Not an investment property agent. The average real estate agent is not doing great (that is why so many have left the business). Listing standard owner occupant houses is rough. Most will be overpriced and stay on the market for months. Investors on the other hand are out in full force and in some areas (like North Minneapolis) it is like a feeding frenzy.
I am not sure who I am writing this post to (agents or customers). I guess maybe both. As an investor, I would be cautious of the agent that is just sitting around in this market looking for business. As an agent, I would work hard to pick up some investor clients and light the world on fire.
