Archive for November, 2011

Minneapolis Duplex Market Better Than Rock Climbing

said on November 8th, 2011 categorized under: Twin Cities Real Est

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duplex sales offer thrillsWorking as a duplex Realtor in this real estate market is a lot like being an extreme sports junkie. There are plenty of challenges, moments of fear and then, exhilaration.

I have to confess that I got an adrenaline rush this morning when I realized during the week ending October 29, 2011, 39 Minneapolis duplex, triplex and four unit apartment building owners accepted purchase agreements.

After all, for the week ending October 22, that number was 16.

And one year ago, during the same week, there were just 19 duplex sellers who accepted offers.

Especially encouraging, was that 47.2 percent of these sellers were of the traditional variety, and did not need a lender’s permission to sell.

This is a healthy gain from the 15.8 percent of duplex sellers one year ago who walked away from closing with a check in their hand.

The trend we’ve seen in recent weeks of less and less new duplex and small multi-family inventory for buyers to purchase continued.

One year ago, there were 38 new duplex investment opportunities.

This year there were just 28, which represents a 26.3 percent decline in inventory.

In the single family market, there were 14.5 percent fewer new listings than there were the last week in October one year ago. In all, there are 21.6 percent fewer homes currently listed for sale than there were last year.

Meanwhile, pending sales were up 40.3 percent.

It might not be quite time to say we’ve conquered the mountain. But we can see how far we’ve come.

Buy A Duplex, Own The Lakers

said on November 7th, 2011 categorized under: Multi-Family Property Investing

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real estate investment buys sports teamsI must admit, never would have thought about using duplex investing as a way to buy a professional sports team.

I might have had I known the history of Los Angeles Lakers owner, Dr. Jerry Buss.

Now I’m a long time Laker fan. But I just assumed he made his money as a doctor. You know, the kind that tells you to open your mouth and say “Aaahh.”

Turns out he made the money he used to buy the team as a real estate investor.

It seems when he was a chemistry professor at USC, he thought he needed something to supplement his income. So, in the 1960s he took $1000 and invested in a West Los Angeles apartment building.

Over time, he was doing so well as an investor that he gave up being a professor.

When it comes to professional sports team ownership, he’s not alone.

Minnesota Vikings owner Zygi Wilf is known as a real estate developer. However, after a brief stint as a used car salesman, he and his brother Harry started buying apartment buildings.

Today, they own over 100 commercial properties and over 30,000 apartment units.

Owners of the Miami Dolphins, St Louis Rams and Denver Nuggets, among others, also made their fortunes investing in real estate.

In a down real estate market, with single family homes, duplexes, triplexes and apartment building selling at clearance sale prices, can you think of a better time to start investing?

Can you imagine owning the Lakers?

Got A Duplex Question? Ask!

said on November 3rd, 2011 categorized under: Education

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duplex questionsWhile most of the time I think I’m pretty good at guessing what Duplex Chick readers want to know about buying or selling a duplex, I’m not always sure I’m on track.

So, if you have something you want to know, don’t hesitate to ask!

If I don’t know the answer, I’ll do my best to find it; and we’ll both learn in the process.

Just click on one of the “contact me” links on this page and let me know what’s on your mind!

Why A Duplex Isn’t Worth What You’ve Got Into It

said on November 2nd, 2011 categorized under: Selling A Duplex

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minneapolis duplex sales shouldn't be based on what you have into itNo matter how long I work in the real estate investment and duplex sales, I am always surprised by duplex sellers who want to price their property according to “what they’ve got into it”.

They’ll say things to me like, “Well, I paid $300,000 for it ten years ago, and I put new boilers in last year. That cost $12,000. And I put a roof on the year before that, which was another $7500. And I’ve gotta pay the Realtors, and, well, I’d like to put a little something in my pocket…so adding it all up, I guess I’d want $375,000.”

Duplex pricing just doesn’t work like that.

After all, when’s the last time you bought a duplex without a roof? What’s a duplex worth that doesn’t have a source of heat?

Pricing a duplex according to what you’ve got into it is a little like replacing the alternator on your car and tacking the cost on to whatever the value is according to the Kelly Blue Book.

You would just never do such a thing.

After all, the Blue Book values are determined by what the market has been willing to pay for cars comparable to yours.

It’s assumed all of those vehicles came with things like alternators, transmissions and tires.

Kind of like duplex values (unless a condemned or seriously distressed property) are determined by similar properties in the neighborhood that have sold– and included the cost of shingles and heat.

A duplex isn’t worth what you’ve got into it.

It’s worth what the market says it is.

Minneapolis Duplex Market Headed Toward Balance

said on November 1st, 2011 categorized under: Twin Cities Real Est

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minneapolis duplex sales move toward balanceBalance, in a real estate market, is when there is a 5-6 month supply of single family home and duplex inventory available for sale in a given market.

When this happens, both home and duplex buyers and sellers have equal leverage. In other words, a buyer can no longer beat desperate sellers up on price.

And, of course, sellers can’t crank up prices on buyers simply because there’s nothing worthwhile on the market for them to buy.

Heads up, those of you looking for a Minneapolis duplex deal…

Buried in today’s market report from the Minneapolis Area Association of Realtors was the following statistic:

  • for the month of September, the Months Supply of Inventory decreased 21.9% to 6.8 months.

In other words, in the Twin Cities, we’re .8 of a month from a balanced market.

In the duplex sector, there were 16 sellers who accepted purchase agreements during the week ending October 22, 2011.

Of these, 25 percent were traditional sellers who will leave the closing table with a check to spend on something else.

All of the other sellers will watch proceeds of the sale go to a bank.

Last year, there were also 16 sellers who accepted offers during that week. Of those, however, just 12.5 percent were going to have money left over.

Most of the duplexes this year left the MLS at an average list price of $106,982. This is up from the average sold price one year ago of $92,156.

Here’s where things get interesting. One year ago during the third week of October, there were 44 newly listed duplexes, triplexes and four unit apartment buildings for buyers to chose from.

The same week this year?

14.

There were also 110 property owners who received Notices of Default in Hennepin and Ramsey counties alone this morning. This is up significantly from the daily averages of the last 8-10 months.

Looks like it’s going to be an interesting winter for Minneapolis duplex sales…

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