Buying Property

Two 2007 Built Large Minneapolis Tri-Plexes For Sale

These two 3 unit buildings were built in 2007 with all the amenities:

3 bedrooms per unit with a 1/2 bath and full bath in each one
Each unit has its own laundry.
Central A/C in each unit with new high efficiency furnaces.
Commercial grade sprinkler system.
Low maintenance vinyl siding and windows.
3 car garages.
Average rent is $1200 per month.
5 [...]

These two 3 unit buildings were built in 2007 with all the amenities:

• 3 bedrooms per unit with a 1/2 bath and full bath in each one
• Each unit has its own laundry.
• Central A/C in each unit with new high efficiency furnaces.
• Commercial grade sprinkler system.
• Low maintenance vinyl siding and windows.
• 3 car garages.
• Average rent is $1200 per month.
• 5 of the 6 units are fully rented.

Best of all, they are located next to each other in NE Minneapolis.  You could own 6 units at one location that produce around $86,400 per year in gross rent!  See more of the details here:  55/59 Lowry Ave NE, Minneapolis

Contact me with any additional questions, 612-281-5419.

4 Tips for Winning the Offer on a Foreclosed Property

I updated a post I did a year or so ago about how to get an accepted offer on a foreclosed property. When you get a minute, check it out over at 4 Tricks to Being the Winning Bid for that Foreclosed Property.

I updated a post I did a year or so ago about how to get an accepted offer on a foreclosed property. When you get a minute, check it out over at 4 Tricks to Being the Winning Bid for that Foreclosed Property.

Lowball Offers on Retail Homes

I wrote a post almost 2 years ago about making lowball offers on bank owned properties.  I use an offer that is more than 20% below list price as a lowball offer.  Both then and now, most banks will not even consider an offer that is too low.  Sometimes they won’t even respond, let alone [...]

I wrote a post almost 2 years ago about making lowball offers on bank owned properties.  I use an offer that is more than 20% below list price as a lowball offer.  Both then and now, most banks will not even consider an offer that is too low.  Sometimes they won’t even respond, let alone accept a low ball offer.

As I have mentioned before, this market has also been very difficult in the last 6 months as the inventory of properties is much lower than 12 months ago and competition is much higher for both retail and investor properties.  In this foreclosure market, many of my customers have been purchasing foreclosed properties to rehab and flip them.  Their margins are much smaller than the huge numbers you see on those type flipping homes shows.  Most my customers are simply trying to make a modest profit and considering the risk they are taking, it is not that much.

I have been very surprised lately to see my investor customers receiving offers on their completely rehabbed properties at prices that I would consider lowball.  My customers price these homes competitively in their neighborhood and so I am disappointed to see offers that are 10-20% below list price.  When you are making only 10% on a flip, maybe $15,000 after all expense, you can’t discount the price by 10%!

While I don’t think we will change our model, it is interesting how aggressive the retail buyers are becoming out there right now.  Come to think of it…..I have been just as aggressive when making offers on retail properties.  Wait, maybe I should delete this post!

Rentals Not Allowed

A customer of mine recently purchased a townhouse in Brooklyn Center.  It was a 1970s vintage with 3 bedrooms and they paid $29,900.  It is in terrible shape and needed everything (carpet, paint, kitchen, bath, furnace).  It was also filthy and looked like some of the college houses I had gone to parties in.  The [...]

A customer of mine recently purchased a townhouse in Brooklyn Center.  It was a 1970s vintage with 3 bedrooms and they paid $29,900.  It is in terrible shape and needed everything (carpet, paint, kitchen, bath, furnace).  It was also filthy and looked like some of the college houses I had gone to parties in.  The carpet was sticky and there was ketchup on the ceiling of the kitchen!

After getting the offer accepted, we received the association docs.  Needless to say that I was dragging my feet on reading this 117 page document over the weekend.  My customer, being an attorney, dove right in.  Deep within the document were the “rental rules”, which went on to say  that a unit in that association may only be rented if the owner lived in the unit for at least 1 year prior to renting it.  [Insert gnashing of teeth by me,  here].

Why didn’t the listing disclose this?  Why didn’t the listing agent ask me if it was an investor buying this property?  We promptly canceled this PA and will be moving on.  Keep an eye out for this when purchasing a condo or townhouse.  It is more common than you may think.

New Saint Paul Vacant Building Fees

The cities continue to try to find ways to make up their budget shortfalls.  The City of Saint Paul has now imposed a $275 fee for their inspectors to review your plan to rehab a Category 2 property.  You must pay the fee prior to them considering your project.
Read more about it here at my [...]

The cities continue to try to find ways to make up their budget shortfalls.  The City of Saint Paul has now imposed a $275 fee for their inspectors to review your plan to rehab a Category 2 property.  You must pay the fee prior to them considering your project.

Read more about it here at my Saint Paul Homes site.

5 Reasons to Not Buy a Short Sale

Short sales have been a constant frustration of Realtors, buyers and even sellers for a long time.  I am sure there are more than 5 reasons to not buy a short sale, but I figured these were the biggies!

Unknown Length of Time: Short sales generally can take months from accepted offer till closing.  Plus, there [...]

Short sales have been a constant frustration of Realtors, buyers and even sellers for a long time.  I am sure there are more than 5 reasons to not buy a short sale, but I figured these were the biggies!

1. Unknown Length of Time: Short sales generally can take months from accepted offer till closing.  Plus, there is really no solid time line as to when the closing will occur.  Do not make plans to move around the date on the purchase agreement, it doesn’t mean anything to the bank!
2. Deal May Never Close: I have seen many short sales that never get approved by the bank and consequently go into foreclosure, despite having an accepted purchase agreement.  This is usually a result of the bank taking their time or a disorganized/inexperienced listing agent.
3. Price on Purchase Agreement May Not be Accepted by Bank: Although the seller has accepted your offer, there is no guarantee the bank will.  You could get the offer accepted for $100,000 only to have the bank come back and say they will only accept $125,000.  Your only options are to accept $125,000 or to cancel the deal.
4. Little or No Information Prior to Closing:  This is related to #1 above.  This can be one of the more frustrating parts of the process.  The listing agent will often have no information as to what is currently happening on a short sale deal for weeks on end.
5. Last Minute Deal Thieves: Just like on eBay, unless the listing agent is explicitly preventing it, you could have an accepted offer in on a property for months, only to lose it in the last 30 days to a higher bid.  While I know the 2nd buyer is not maliciously taking the property from you, the listing agent is doing you a disservice by taking a later offer, regardless of the fact it is higher.

These are just a couple quick problems to watch for when buying a short sale.  The best advice I can give someone is to not get attached to the house until you get the keys in your hand, after closing.