Archive for July, 2011

5 Reasons Why You Lost Out On That Minneapolis Duplex

said on July 29th, 2011 categorized under: Buying A Duplex

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minneapolis duplex bidding warsI know it’s hard to believe in light of what the media’s been saying, but my duplex buyers and are actually running into multiple offer situations in the investment property market.

What kind of properties are we seeing bidding wars on?

Usually aggressively-priced Minneapolis and St Paul duplexes located in popular neighborhoods that are in good to very good shape.

Most of the time they’re owned by the bank, Freddie Mac or Fannie Mae.

And most of the time, there’s a feeding frenzy of buyers, making the sale of the duplex an awful lot like an auction.

So what kind of properties are being accepted on these properties? A winning bid may have one or more of the following characteristics:

  1. It was the highest offer. Remember, banks lent the previous owner far more money to buy the duplex than they will recoup selling it. 
  2. It had the fewest contingencies. While it’s always wise to have an inspection done, you may find doing one, without your offer being contingent on being satisfied with the results to be more appealing to an institutional seller.
  3. It had the biggest down payment. Sellers often view the down payment of an offer on a duplex to be an indication of the financial strength or weakness of the buyer. Right or wrong, the thought is the more someone has saved for a down payment, the more apt they are to be financially healthy.
  4. It had the biggest amount of earnest money. Similar to the down payment amount, a larger sum of earnest money conveys a similar message of strength.
  5. It was all cash. In a volitale duplex market, sellers often fear their property not appraising for the amount they either have it listed at or have accepted a purchase agreement for. In the event that happens, they will find themselves either having to renegotiate a contract with the buyer, or relisting the property all over again. A cash offer is not contingent upon an appraised value, and is therefore, more of a “sure thing” to the seller.

Now I realize it isn’t always possible to employ any or all of the tactics above. However, knowing them may help you understand the “why” of losing out in multiple offers.



Duplex Owners Prepare For Winter

said on July 28th, 2011 categorized under: Multi-Family Property Investing

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duplex owners prepare for winterOne topic duplex buyers and I have been talking about lately is the seasonality of rental property.

See, as much as we all hate thinking about it, winter isn’t too far over the horizon.

And guess what?

Nobody wants to move in the winter.

I don’t know if the same can be said about cities with extreme heat, but in the areas where extreme cold and icy sidewalks are, at minimum, psychological barriers to heavy furniture lifting.

In other words, if it can be helped, nobody wants to move during the winter. In fact, for the most part, they don’t want to move during the holidays either.

What’s the first “holiday” of the season?


Working backwards, with an eye toward having a duplex fully occupied before the holiday season, means at latest, duplex owners want do all they can to get leases signed before then.

If you’re thinking about buying, consider this: it’s going to take anywhere from 3 weeks to a month to get a loan funded, get through escrow and officially close on and own a duplex.

And if the investment property you’re buying needs some repairs, you need to allocate some time for that too.

This is true if you already own a duplex and presently have a vacancy as well.

As a result, it’s probably a good idea to start moving a little faster as we head toward fall.

Comments Off on There’s More To The Minneapolis Duplex Story Than The Headline

more to duplex story than headlineYou may have heard of this thing called the Standard & Poor’s Case-Shiller index. The media would have you believe it’s the nation’s most important source of information when it comes to duplex and single family home sales.

The report, which was released yesterday,stated for the second straight month, average prices for homes and duplexes sold in 16 of the 20 major metropolitan markets included in the survey were up. Granted, it was an average of just over 1 percent, but up is, after all, up.

So how did the Twin Cities fare?

Dead last.

As in experiencing a double-digit decline in sold prices of 11.7 percent; the largest drop in the nation.

This was a huge surprise to not only me, but the other Realtors in my office as well.

We’ve been incredibly busy, with offers coming in on listings that have lingered for some time and buyers having difficulty finding good property to buy.

In fact, to us it seems like the market’s improving.

And all the data coming from the Regional Multiple Listing Service in our area backs us up.

Yes, prices were down in May. But so were a lot of other things.

And that’s good news.

The Months Supply of Inventory dropped 1.6 percent to 7.9 months worth of housing. A balanced market is when there is a 5 month supply.

New listings were also down 5.5 percent between May and June, with the total amount of inventory for the year down 15.9 percent

And get this. Pending sales were up 48.1 percent.

Guess it pays to read the rest of the story.

Minneapolis Duplex Market Looks Younger

said on July 26th, 2011 categorized under: Twin Cities Real Est

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duplex market looks like joan riversIf the Minneapolis duplex market were a person, I’d suspect it either had some Botox injections or a face lift.

In other words, there’s something different about it; it looks better somehow, but I can’t quite put my figure out why.

And I probably won’t be able to until it’s gone all Joan Rivers on me.

For the week ending July 16, 2011, 29 Minneapolis duplexes and small multi family property owners received and accepted purchase agreements. Of these sellers, 34.5 percent were did not have to get permission from anyone at a bank to sell.

Last year during the same week, 21 properties had offers written on them which were accepted. Only four of them (19 percent) were owned by equity sellers.

The average sold price for these listings was $91,462. Compare that to the visibly different off market figure of $121,548 for the week this year. Granted, the average off market list price is always higher than the sold amount. But when these properties have closed, I suspect we won’t see that much sagging.

And check out this face lift…

There were 34 new listings for the week. Almost half, at 44.1 percent, where brought to the market by traditional sellers.

One year ago, 43.4 percent of the new listings were traditional sellers. Nothing too different about that. But, get this. There were 53 new listings a year ago. Just 34 new opportunities presented themselves during the same stretch this year.

That’s a drop in new inventory of 35.8 percent.

I guess it wasn’t my imagination that inventory was getting a little tight.

A similar fad seems to be happening in the single family home market. There were 8.7 percent fewer listings than last year for the week, while buyers signed 59.8 percent more purchase agreements.

Overall, inventory is down 17.2 percent over last year.

Whether these shifts are due to lenders liposuctioning foreclosures off the market or represent a new fitness trend in the Minneapolis duplex market, only time will tell.

But for now, the market does, in fact, look better with a few less wrinkles.

Why The Default Should Make You Buy A Minneapolis Duplex

said on July 25th, 2011 categorized under: Financing

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credit card background

Sometimes all the political noise about a US default is easy to tune out. But have you ever stopped to wonder how it might impact you as a duplex buyer?

One of the fears economists have about a default is the impact it would have on interest rates. As the U.S. is already projected to spend $1.5 trillion more than it takes in, our nation would be forced to borrow money to cover the deficit at higher interest rates than before.

It’s kind of like missing a credit card payment and seeing an interest rate of 21 percent on your next statement.

Sooner rather than later, this would trickle down to consumers in the form of higher interest rates on things like credit cards, car loans and duplex mortgages.

If you don’t think it will have an impact, consider this. With an increase of just 1 percent interest on a $200,000 loan, the annual payment would jump $2000, or almost $200 a month.

That’s enough to keep some duplexes from cash flowing.

If you’re in the market for a duplex right now, there is one way to lock up a low interest rate, regardless of what happens with the federal budget on August 2. How? Get a purchase agreement.

The minute you have a signed purchase agreement, you can lock an interest rate. That is, if that purchase agreement is signed before the ceiling for the deficit is raised.

Think about it.

It could make all the difference in your cash flow.

Comments Off on Now Offers Guide’s To Buying And Selling

duplexIf you’re thinking of buying or selling a duplex now or sometime in the future, you may want to click on the “Home” tab for

On the Home page, you’ll find a number of boxes, or areas, with text in them. In about the middle of the page you’ll find one that reads “Considering Buying” and another that says “Thinking of Selling”.

If you click on either, you will get either my Duplex Buyer’s Guide or Duplex Seller’s Guide. I don’t need your phone number, or any of that stuff; just a valid email address so I can send back a copy of the articles.

The reason I send them as a PDF is they’re long. And, if you’re even remotely green minded, it gives you a way to use them as a reference guide without having to print them out.

Feel free to download them. They are absolutely free and I put a lot of work into creating basic duplex buying and selling guides that were easy to read and understand.

I hope you find them helpful.


Comments Off on How Good Manners Can Get You A Great Deal On A Minneapolis Duplex

thank you for calling about that duplexAt the risk of repeating myself, if you have asked me to find you “a great deal on a Minneapolis duplex” and I call, or the Realtor you’re working with calls, please call back.

Even if you’re not interested, call, text or email and say just that.

Not only is the polite thing to do, but, you see, you’re not the only one looking.

There are other agents with other clients who want great deals too. As a matter of fact, we also have other clients who would just love to steal that duplex out from under you.

If you procrastinate, it will cost you money because you will find yourself in a multiple offer situation.

Yes, even in an allegedly bad real estate market, there are a lot of people looking for great deals on duplexes. And the great ones are still few and far between.

Realtors work very hard to unearth opportunities for my clients. And few things frustrate us more than working hard for someone who can’t be bothered to respond.

In fact, it makes us want to quit working for those people and take those great deals to people who get back to us.

Whew. I feel better now. Thanks for letting me vent.

Minneapolis Duplex Sales Go Up North

said on July 19th, 2011 categorized under: Twin Cities Real Est

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duplex buyers stayed up northThe Minneapolis/St Paul duplex market took an extended holiday over the week of the 4th, with most buyers apparently choosing to stay “up north” at the cabin for the week instead of purchase property.

However, it was nothing like the vacation they took during the same week last year.

While only 20 duplex owners accepted offers on their property for the week, one year ago, only 8 did.

Thirty percent of these sellers had equity in their property this year. That’s down from the 37.5 percent of them who did one year ago.

New listings were on a bit of a holiday break as well, with just 32 new duplex opportunities coming on to the market. This is down 5 from last year.

Of these new listings, the banks increased their market share by 2.6 percent over the same week in 2010.

The single family home market created the illusion of recovery, with pending home sales up 40.2 percent from a year ago. However, this number is skewed, as most people last year purchased homes before the April 30th tax credit deadline.

The good news in this market sector is inventory is continuing to decline. In all, there are 16.1 percent fewer homes on the market than there were at this time last year.

As inventory continues to tighten in both the single family and duplex markets, the theory goes that prices should start to go up. 

Time will tell.

What Not To Do With Your Duplex’s Positive Cash Flow

said on July 18th, 2011 categorized under: Buying A Duplex

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Whitehaven Beach, AustraliaYippee! Now that you have positive cash flow from your Minneapolis duplex, you can take that long overdue trip to Hawaii, right?

Not yet.

Your investment property budget is subject to the same winds as your personal budget. In other words, before you spend your monthly cash flow on fun stuff, you should probably make sure you have enough reserves to weather any storm.

How much is that? Some experts say you should try to have enough saved to cover six months of mortgage payments.

Others focus more on having enough saved to cover any major repairs you might face; like the air conditioning going out on a day when the heat index is officially ridiculous.

And what happens if you have to evict a tenant who’s trashed the place? How much does that cost?

While there is no concrete rule of investing to determine how much you should have in reserves for a duplex investment, it’s probably wise to have the equivalent of several months of the amount of rent your property grosses on hand.

And enough cash to not have to use credit cards to cover major repairs.

Look at it this way — if you never have to use your reserves for a repair, eventually, you’ll have saved enough to buy another property.

After that, maybe you can go to Hawaii.

Duplex Chick Gets A Facelift

said on July 15th, 2011 categorized under: Buying A Duplex


web duplex chick avatarYou may have noticed things look a little different around here.

Well, at least if you go to my home page at, they do.

In May, Duplex Chick was three years old. In Internet time, I think that’s roughly the equivalent of being 50, so it was time for an update.

I have a lot of visitors to and readers of my site who aren’t from Minnesota. And while I certainly have some geographically specific information, most of what I share fits duplex owners everywhere. So, my main home page reflects that.

For example, if you click on my Thinking of Selling or Considering Buying links, you can register to have my basic guides to either sent to your email account. The information in each is true nationwide, and I hope you find it helpful.

However, if you’re interested in more Minneapolis and St Paul specific information, you can either click on the Minnesota link or favorite this address:, you’ll arrive on a page that will allow you to access more Minneapolis and St Paul flavored information.

I hope you understand if there are some glitches here and there. This revamp has been underway for more than a year and in spite of all my best efforts, I’m sure I missed something.

Anyway, I hope you like it. And, as always, if you have any duplex or small investment property questions, just ask. I’ll do my very best to find an answer.

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