We sold our North Minneapolis flip house this past Thursday December 23 2009 and it was a picture perfect end to a great story.
We got an offer on our house less than two weeks after it went onto the MLS. After some very typical negotiations we came to an agreement. Due to federal regulations, any “flip” house that receives an offer with FHA financing needs to have at least 90 days (seasoning period) between one owner to the next. This is a rule that went into effect to protect potential buyers from investors who were simply trying to make very quick cash and typically were not doing any significant work to improve the home for the prices they were asking. So, even though we remodeled this house inside and out, top to bottom, and have receipts to prove it, we still have to abide by this rule if we were to consider an offer with FHA backed financing. This meant that we had to “hold” the house about a month longer than we would if we had worked with a conventional loan or a cash buyer which meant additional out of pocket money for us and with our early Minnesota snow falls, a lot of shoveling!
Of course, our buyer’s were smart and hired a professional home inspector to take a look at the home. The inspector was very impressed with the work and there were a few very minor things that we put the finishing touches on for our buyers. We did end up meeting our buyers in advance of the sale which is pretty unusual. We were thrilled to meet them and thought they were the perfect fit for our home! We were also really happy when the first time home buyer federal tax credit got extended so that our buyers could take advantage of that as well!

This transaction showed us that not only is a home flip a good investment opportunity for us but also seeing the glow on our buyer’s faces at the closing table confirmed our joy in knowing that our “flip” is now providing a great home so this couple can get started on the right foot.

Overall, flipping a home in North Minneapolis was a great experience for us and after the holiday and a nice well deserved vacation, we will be on to our next one!

Keep in mind….house flipping is not a “get rich quick” plan. There is a lot of risk involved – please refer back to my first post about our North Minneapolis house flip for more information.

Jen McKinnon
Realtor / Investor
Agent Referral Network
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

Our house at 3326 Morgan Ave N is on the market as of yesterday and we have our first showing this morning!  With the quality of construction and the price point we are the best house in the North Minneapolis area right now. What really sets us apart is the huge master suite with walk in closet and master bath.  North Minneapolis boasts some great 1.5 story houses but most of them just have the bedroom part in the half story.

It was hard to determine the price point because right now within a 5 block radius of 3326 Morgan Ave N there are “comparable” houses ranging in price from $109,000 to $174,000.  Some “sold” comparables range from $98,000 to $143,000 with a median price of $125,500.  With a flip / rehab, yes, you want to make money but you also need to determine how quickly you want to sell it.  Many flippers get greedy and try to make as much money as possible but end up pricing too high.   As with any smart business decision, you need to take your time / money ratio into consideration.  The longer the house sits on the market, the less money you make in the long run and most likely you will need to lower your price point which never looks good.  I’m confident that we’ve priced our house correctly and fairly for the market.  If we were willing to wait it out we could maybe go a little higher but there is also a strategy of pricing lower and hoping for multiple offers which could push the price up.

Ultimately, it’s a fine dance between buyers and sellers.  If you provide a good, quality product that you can be proud of at a fair price, everyone wins in the end.

Jen McKinnon

Realtor/Investor

AGENT REFERRAL NETWORK

MN Real Estate Team

612.384.1073

jen[at]mnrealestateteam[dot]com

Real Estate Investing 201 Seminar – Saturday, March 21st, 12:00PM-?
North Minneapolis Bus Tour
I am frequently asked where the best deals are for investors in the Twin Cities area. Right now North Minneapolis has the largest concentration of amazing investment property opportunities. 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 show 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, March 21, 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!

Future Seminar Dates: April 28, May 26
Please call me at 612.384.1073 or email at jen [at] mnrealestateteam [dot] com

Jen McKinnon
Realtor / Investor
MN Real Estate Team

If you are a landlord, don’t forget that by law, you need to get each tenant a Minnesota Certificate of Rent Paid by January 31 2009 for any rent paid to you for 2008. They are easy to fill out as long as you know how much rent the tenant paid – I hope you’ve kept track!
To see more information about this go to Minnesota Certificate of Rent Paid

Looking for investment properties?
St Paul Minnesota is a great place to buy rental / investment properties.
Good areas to consider for higher rents and alot of renters out looking are:
Merriam Park
Town and Country
Macalester Groveland

There tends to be alot of students looking in these areas because of the number of colleges such as: St Catherine, Hamline, Concordia, St Thomas and Macalester.
We have found that students are good tenants, stay for at least a year and since parents typically pay the rent, there is rarely an issue with collecting rent on time.
The typical homes in this area available for rentals / investments are Single Family Homes and Duplexes. There are other options as well but keep in mind, if you get 5 or more units in a building, it will be considered a commercial building and therefore have different financing guidelines.

Do you want to get into the St Paul rental / investment property business?
Contact me today!

Jen McKinnon
Realtor / Investor
AGENT REFERRAL NETWORK
MN Real Estate Team

612.384.1073
jen[at]mnrealestateteam[dot]com

With investment properties, there is money to split or transfer at closing.  I had a client asking about this the other day as the closing on his new duplex in Champlin is coming up this week.

Bottom line, as the home buyer, you should get prorated rent for the month that the closing occurs – you will get rent for the actual day of closing through the end of the month.  You should also get the security deposit plus accrued interest for the time period that the tenant has already lived in the property.  Taxes will also be prorated just like any other transaction. 

Utility bills should be paid by seller up to day of closing and should be transfered to the seller starting day of closing and moving forward.

To ensure a smooth home buying transaction, your realtor should make sure these funds are being handled correctly through the title company.

Jen McKinnon
Realtor/Investor
612.384.1073
jen [at] mnrealestateteam [dot] com

AGENT REFERRAL NETWORK
MN Real Estate Team