The anatomy of a Twin Cities real estate deal touches on variety of topics which will depend on if success happens or not. Investing in real estate is not for the faint of heart and leave people pondering what mind have been. Hindsight can lead to a lucrative future.
Basic Types of Twin Cities Real Estate Investors
Flipping houses or ‘turn & burn’ as some have called it obviously picked up a lot of steam with all those television shows the past few years. This process includes buying a distressed home (which is more than likely a bank owned home) that can be brought up to current standards and sold for a profit. Can you still fix and sell for a profit in the Twin Cities metro area? I will be straight honest on this one and leave it open ended to yes and no. Will leave it at that because certain areas are good and others, well not so.
Finding properties can be a struggle when so many real estate investors looking for that needle in the haystack property that will make them rich beyond their wildest dreams. It’s important to have all your ducks in a row so when that property pops up that you can make your offer quick and get it accepted.
Buy & Hold is when you purchase a property in the sole purpose of purchasing a home and renting it out to capture equity. Every investor knows that true wealth comes from your ability to have many properties which opens up the doors to creating revenue streams from income producing properties.
Know the Trends
Doom and gloom is all you hear all over the media, will the end ever appear, not by the way the national media makes it appear. I find it hard for them to know what is exactly going on in this specific neighborhood in one specific area. Isolated pockets of increases and demand are out there. Some areas are outperforming what is truly being stated in the media.
Keep your finger on the pulse of the local Twin Cities real estate community to find the best deals. This allows the real estate investor to know the true value of the property so overpaying is never a factor. Never take a shot in the dark when it comes to property values.
Knowing trends can help assure that an investor gets in on the ground floor of an emerging or re-emerging area. Don’t be late to the party because you have already missed the curve and you might walk into a soon to be deflated area, thus making your real estate investment rendered useless.
True Scenario
Enough talk, show me how? Recently I helped a client get into a great opportunity in St. Louis Park which was purchased using a FHA 203k Streamline loan. The area is hot because of the close proximity to downtown Minneapolis and Uptown, without the high prices of living. The house was in prime condition for a fix and sell because of the price point and area. The house was a REO Bank Owned home in badly need of repairs, but with a little creative thought was surely to be profitable. Total days on market was a whopping six.
The guts of the deal:
- Sold @ $169,000
- Down Payment of 3%
- 203K allocates $17,000 for immediate fixes
- Total investment = $5070 at closing
- A total of $23,000 invested for remodel
- Sold for $279,000
- Carrying Costs $5900
- Seller Costs to sell $16,740
- Profit of $47,360
Umm, I don’t know about you but that is still a nice takeaway. I thought this wasn’t suppose to happen the way the real estate market is right now. Money is made in a down market, this is wear the strong survive and create true wealth for themselves. The deal was successful because of the steps that were followed and making an educated decision.
The best thing about it was this was their first home ever bought. So there you have it, one of many successes that are occurring in a down market.
Fantastic Opportunities
For those that know the variables of making a good real estate decision, has always been a way to create that nest egg or expanding your financial opportunities.
In a note to say that not all real estate deals end up this way and each deal is structured different, but if you think you have what it takes then I invite you to find out how.
{ 2 comments… read them below or add one }
I have bought 4 houses this year and sold 3 houses, one keeping and holding onto for a rental property because the cash flow was to good to pass up. The money I have made is still good although not as good as years past.
I just dug in, priced under market value and got rid of the properties taking what I could get. To many people have this mindset thinking they can get so much out of the property, not realizing that if they get an offer and turn it down… then they probably just got rid of a golden opportunity that might not come back around.
Find an area and master it and NOTHING else. Master that niche, know everything about it, trends and price increases/decreases. You cannot fail unless you allow yourself.
Funny how nobody talks about the real estate investors that are actually making money in today’s supposedly horrible housing market. This is the kind of market where wealth is captured and built.
It’s simple and the age old rule doesn’t change, buy in a buyer’s market and sell in a seller’s market.
@Rick
That is great news to hear! I know a lot of people that are having good years investing in real estate around the Twin Cities.
As the oracle Warren Buffet says ‘Be fearful when others are greedy, Be greedy when other are fear’.