With all the foreclosures on the market, it can be risky at times not knowing whether a property has code compliance on it, has a VBR or even if it is condemned and ready to be demolished.  Below are some easy instructions on how to check on a property’s status in the City of Minneapolis.  Note:  It does not give you info on Assessments or on rental licenses status/availability, but it is a quick way to see if you are going into any issues.

1. Go to:  http://www.ci.minneapolis.mn.us.
2. Scroll down to the right hand side and click on property information.
3. Choose property look-up service.
4. Enter the address you are interested in.
5. As a test, put in 3227 Girard Ave N (you can put in a partial address like:  3227 Gir).
6. Scroll down to the bottom of the screen and look for “active parcel flags” (in the case of 3227 Girard-you will see that the property is condemned requiring code compliance and also has a VBR on it.)
7. If you click on Truth in Housing, this will show you if one has been done (by law one must have been completed PRIOR to property being put on the market for sale).
8. If the property is condemned, the Truth in Housing will become invalid and you will see a comment that says:  “condemned requires code compliance”.
9. If you do not see the link to Active Parcel Flag, this means the property is not condemned and does not a a Vacant Building Registration (or VBR).

Lastly, as part of our inspection period, we have started having our title company (for a nominal fee) run an assessment search to see what could potentially extra costs incured by the buyer at closing.  Lots of checks and rechecks to try and smooth out the process of buying foreclosed homes in Minneapolis.

Rob Bonahoom wrote a great article about how Fannie Mae continues to loosen up its regulations to allow investors to help fix this mortgage crisis.  They will now allow you to refinance your investment property out to 105% LTV.  Read all the details at:  Investment Mortgage Guy.com

Homeowners in Minnesota have been battling a through a tough real estate market for the last few years. Foreclosures, short sales and falling prices have made the American Dream sometimes appear to be a nightmare. Luckily, as with all markets, Minnesota’s residential market will recover. How fast and stable the recovery will be is something that government can either hinder or help, depending on the tax policies it adopts.

That is why the Minnesota Association of REALTORS® was shocked by provisions in the House DFL Tax Bill that hammers homeowners. Two of the most significant changes are the elimination of major income tax deductions – property taxes paid and mortgage interest. These two provisions have been part of Minnesota tax law since 1933 and are readily utilized by homeowners to help offset the annual expense of owning and maintaining a home.

Studies show that ninety-seven percent (97%) of the tax benefits from these deductions go to Minnesotans with household incomes starting at $30,952. In many cases, these are young families who have recently purchased and are struggling during this recession. Not every taxpayer utilizes these deductions; however, 75% of homeowners use these deductions when filling out their taxes. Other homeowners have paid down their mortgage over the years and now claim the standard deduction. More significant is that homeowners understand the overwhelming public policy benefits these deductions provide and realize their children and grandchildren will need these deductions so they can own a piece of the American Dream.

Home ownership has been widely recognized as good public policy for stabilizing families, neighborhoods and communities. Altering these widely accepted tax deductions at a time when the residential real estate marketplace has been struggling seems to be the wrong solution at the wrong time. You can access the House Tax Bill at: https://www.revisor.leg.state.mn.us/bin/getbill.php?session=ls86&number=HF2323&session_number=0&session_year=2009&version=list

For some time, we have been hearing rumors that another wave of foreclosures is coming in the fall time frame.  Most of the reports were bits and pieces of information and lots of he said/she said talk.  Despite the unsubstantiated reports, I do believe that we will see more foreclosures in fall.  With many of the areas in the Twin Cities previously decimated by foreclosures, I expect we will see new areas open up as opportunities for our investors.

Here is a recent email that was sent out by an experienced REO agent that has 200+ REO listings:

The reason for the decline of bank owned listings is not a lack of foreclosures happening it is because all of the major lending institutions (Fannie, Wells, Countrywide, HSBC, etc) had a foreclosure moratorium from December 1- April 1 and some as recently as last week stopped their moratorium.

There will be a second flood of REO properties coming on the market. Everyone in REO is expecting the “flood gates” to open up very shortly. Inventory is low and there are a lot of buyers in the marketplace creating multiple offers and values to increase short term.

As soon as this second wave comes through, inventory will go up again. Supply and demand states that values will once again go down (especially in late fall/winter). Now is the time to sell your non bank owned listings. Tell your clients to get their prices right, because when REO inventory goes back up, it will be like last year again trying to compete with the underpriced REO listings.

Although this is only one person’s opinion, I do know him to be a very knowledgeable REO agent. Even if part of his prediction comes true, hold on to you hats. It will be another interesting fall period for investors.

Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.

In the most bizarre turn of events, when every other goverment agency is handing out money by the bucket-full, the Minnesota House voted on Wednesday to cut Downpayment assistance by 66%.  This could result in 200 less homeowners getting downpayment assistance.  Read more about it at Alec Grebis’s Mortgage Scoop.

No, not really, but is sure feels like it.  The foreclosure properties are flying out of inventory even faster that we can get out and see them.  I have had the following showing success this week:

• Monday I scheduled 8 foreclosure property showings in Saint Paul, 5 were already sold.
• Tuesday another customer wanted to see 9 single family homes in Minneapolis, 6 were sold.
• Tomorrow I was supposed to do second showings of available properties we saw in Burnsville on Monday night.  Both of those properties are now sold!

In the last 2 weeks I have seen incredible competion for properties across the twin cities:

• Full priced offer, cash buyer, $5k earnest money ends up losing house in multiple offer situation by $10k.
• 14 offers on North Minneapolis home the first day it is on the market.
• Two properties that a customer was interested in were both on the market for 120+ days and they sell the day after they drop in price by 10%.

If you are competing in this market for any property, you need to be quick on your feet.  Get out and see it the day it comes on the market.  Be prepared to write an offer on the spot.  Go big or go home early in the game.