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According to Minnesota State Law, effective August 1, 2008 Carbon Monoxide (CO) alarms will be required in all single family homes. All Minnesota multi-family properties (including duplexes) will be required to have CO alarms by August 1, 2009. These alarms must be installed within 10 feet of any sleeping room. If you have sleeping rooms on multiple floors, you will need them on each floor.
The key change is that Section 8 inspections will not be expecting these alarms to be in place and you can fail an inspection if they are missing. Plan ahead and get them installed!
This Saturday, July 12, from 3:00pm to 5:00pm, I will be sharing the microphone with Rob Bonahoom and Ryan O’Neill as they discuss real estate. This fast moving and fun Minnesota radio show allows callers to ask us real estate questions.
Ryan O’Neill and Scott Wollmering have been doing the show every Saturday for years and it will be fun to spend the 2 hours with them and Rob Bonahoom, from Cornerstone Mortgage, to discuss investment properties in Minnesota.
Tune in on Saturday at 100.3, KTLK, or check out the Podcast after at the Minnesota Real Estate Show.
Scott Ficek owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email. He is also a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Investment Property.
To llc or not to llc, that is the question! 
A common question that many newer investors ask is: “Do I need an llc to buy investment properties?” or it might be: “How do I protect my personal assets and myself if I am sued?” In these days of frivolous litigation, it is important to have all the pieces in place in case you find yourself on the defendant side of a lawsuit. Or, maybe you already have an llc or two set up, but are not sure if it was done correctly or if it would protect you.
Attorney Matt Engel has helped many investors get their corporate liability shield set up (or fixed). Matt will
talk about why to set up an llc, how you should hold your properties (personally or in the llc), what documents
you should be preparing annually to have a fully functioning llc, and lastly what can happen if you don’t do all the above.
This seminar is geared for both the newer investor or the investor that feels like they need some help in these
areas, and much more! This will be a workshop format to allow you time to get your questions answered in a
group setting.
Register for the seminar by sending me a message here.
Future seminar dates are: Aug 26, Oct 28
Don’t worry. I haven’t forgotten about you all. I am just taking a couple days off to relax and recharge!
Happy 4th of July!
(Courtesy of Alec Grebis, Mortgage Coach, Cornerstone Mortgage, www.MNDiscountHomes.com)
The Song Remains the Same…
In the tale of the Credit Crunch, it’s only crunching louder. Mortgage giant Fannie Mae recently announced a change in their credit rules with regard to foreclosures and bankruptcies. In both cases, they extended the length of time someone needs after one of these events before being able to qualify for a Conventional mortgage again. In general, a borrower will now need 5 years after either of these events.
Another Loophole Bites the Dust
During a challenging real estate market like this, a number of innovative ideas emerge to help people be able to still try and buy a home. One of the strategies for people who are not able to sell their home is to rent it out, and qualify to buy a new home because their old mortgage is being covered by the renter. Going forward Fannie Mae will only allow you to do this if you have all three of the following things:
- 30% equity in your home, and
- 6 months worth of mortgage payments for the old home in assets, plus
- 6 months worth of mortgage payments for the new home.
Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.
Scott Ficek is a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Investment Property. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.
Whenever I am working with a buyer and we are looking at bank owned (or REO) properties, the question always comes up:
“How low of an offer can we make on this foreclosed house”?
Just like many other things in investment real estate, it depends. Typically, a “normal” offer will be 95% of list price. I have seen offers accepted as low as 75% of list price. Much below that and the bank thinks you are simply low balling them and most often they will not even respond to your offer. Here is a list (in order of priority) of how I determine how to answer the above question when buying foreclosures:
- Most often, time on market drives both the price and flexibility of the bank when looking at foreclosures. There are two components under this category that determine how aggressive you can be when making the offer on that bank owned property:
- Total Length of Time on Market-In other words, how long has the bank been trying to sell it. The longer it is on their books, the more opportunity you have to make an aggressive/lower offer.
- Time Since Last Price Decrease-This is related to the above Time on Market in that the longer it has been since the last price decrease, generally the more aggressive you can be with your offer. The converse is also true. For example: even if the property has been on the market for 9 months, if the price dropped 2 days ago, the bank is going to be inflexible when looking at offers much below the new list price.
- The current list price relative to the market. The banks have Realtors perform BPOs (broker price opinions) on the houses periodically. If they just recently received a BPO and you make an offer at 75% of that BPO value, they are typically going to be unwilling to negotiate the difference. The number of REOs in a particular neighborhood may also help you as the bank realizes there are other opportunities out there.
- How strong is your offer outside of the price? Leaving out contingencies, setting a closing less than 30 days out, putting down a larger earnest money check, paying cash, or declining the property inspection are all strategies that make your low-ball offer more attractive.
- Often, the listing agent will help or hurt your chances to make a low offer. If the property is listed by a seasoned REO agent and it has been on the market for a long time, the agent will sometimes encourage the bank to simply dump the property. Maybe they have not received another offer on it in months or maybe the agent thinks the bank is keeping the price too high.
- Your buyer’s agent can help or hurt you. An inexperienced investment property agent can hurt your chances of successfully buying a foreclosure at a larger discount. They do not understand the above 4 pricing variables.
- Although I have never tested this, there is a belief that banks will be more flexible at the end of the month when they are trying to hit their numbers. They may give you a great deal simply because they need a few more houses in the sold category to look good to their bosses.
Ultimately, using a seasoned investment real estate agent is really the key if you are going to be a serious investor in bank owned properties. There are so many moving parts and dead ends with foreclosed properties, it is important for the buyer to have someone in their corner that can mentor and advise them.
Let me help you, I am a Minnesota Real Estate Agent with RE/MAX Advantage Plus. I work exclusively with investment property buyers in the Minneapolis and St. Paul areas and own 28 rental units myself. Investment Properties are my passion.
