Archive for the 'Buying A Duplex' Category

Why That Minneapolis Duplex Is So Cheap

said on December 19th, 2011 categorized under: Buying A Duplex

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abandoned minneapolis duplexWe’ve all seen duplexes listed for sale on web sites like Realtor.com or Zillow and thought to ourselves, “Wow, that’s a really good deal!”

And yet, that duplex doesn’t seem to sell. It just sits there, week after week.

Many first time duplex buyers are certain if they call their Realtor and rush right over to the property, they’ll be able to snap up an opportunity they’ll be able to brag about to their friends for years to come.

The trouble is, most of these buyers don’t realize there’s a reason it hasn’t sold. If the price is low enough, odds are the duplex has already been passed on by experienced buyers and Realtors.

Why?

More often than not in a real estate market filled with duplex foreclosures and short sales,  it’s highly likely the reason is the condition is so bad that the price isn’t justified.

As in, making this duplex right is going to take more than stripping some wallpaper and picking up a paintbrush; which are exactly the kind of repairs and improvements most first time home buyers are willing to take on.

Now this doesn’t mean this duplex is hopeless.

There are financing options for duplex repair like an FHA 203k loan or a Rental Rehabilitation loan from the Minnesota Housing Finance Agency.

However, it’s important to know your appetite for projects before you shout to the world that you’ve found the Holy Grail.

I realize there’s not a lot of duplexes for sale in Minneapolis right now.

Be patient. The right one will come along.

Would You Pay $500 To See A Duplex?

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

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realtor retainer feeBy now, you’ve probably heard it’s a duplex buyer’s market.

You’ve also probably heard there are so many houses and duplexes for sale that it’s difficult to make a decision. So, as you consider buying a duplex, you want to see everything that’s on the market– so you’re sure you find the very best one.

So you look at 20. Or even 30.

Then you change your mind and decide you want to move in with your girlfriend and see how that goes before you buy a thing.

Believe it or not, this happens a lot.

And that’s why many of the Realtors I know are requiring clients to put up a retainer fee before they take them out to look at duplexes. In turn, the agent agrees to give them a credit for that amount when they purchase a property.

Realtors are independent contractors. They are not paid a salary, nor are they reimbursed for their expenses. They earn a check only when one of their clients successfully buys or sells a duplex.

Now, buyers don’t usually have to pay a Realtor a thing. Their agent is compensated through a commission that comes from the seller’s real estate broker.

However, because there is the perception that there is so much on the market, and so much more coming, buyers are less motivated and committed than they’ve been in the past. And they’re costing Realtors much more time and money; especially if they change their minds.

What do you think? Would a retainer fee keep you from buying a duplex?

Why A Duplex Realtor Can’t Tell You About Crime

said on December 5th, 2011 categorized under: Buying A Duplex

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fingerprintWhen a duplex buyer asks me about the crime rate of a neighborhood, or what the quality of a school system is, I have a standard answer…

“I don’t know.”

While I realize this isn’t very helpful,  Federal Fair Housing  laws prohibit me from discriminating agains a number of protected classes, or disclosing anything even remotely related to those classes.

I’m also not a policewoman. I truly don’t know the crime statistics of a neighborhood.

Even if I did, what I personally find to be an acceptable level of crime may not be what yours is.

I’m also neither a parent nor a teacher, meaning I am equally unqualified to render an opinion about the quality of a neighborhood school or school system.

If you’re new to an area, or are thinking of moving into a new neighborhood, don’t despair. There are people who can help.

To determine the “safeness” of a neighborhood, feel free to call the local  police precinct. If you’re in Minneapolis or St Paul, you may ask to speak with the “safe” officer, who is in charge of sharing that information with the public. They can tell you down to the block what the criminal activity (or lack thereof) not only has been historically, but was last week.

You can also scroll down to the useful links section on this web site and get Internet access to both Minneapolis and St Paul’s online crime reports.

If a neighborhood clears your personal safety threshold, but you’re unsure about the educational standards in the schools, you can get the latest statistics, personal reviews and test scores on web sites like greatschools.org.

It’s packed with all sorts of great information that I couldn’t possibly know.

Of course, I’ll always try to answer questions about duplexes themselves!

Comments Off on The Pros And Cons of Buying A Duplex On A Contract For Deed

duplex contract for deedLet’s face it. Many of us would love to buy a duplex.

That is, if we could get a loan for one.

Tightened lending standards, however, mean a lot of us can’t qualify for a bank loan.

And that’s why we’ve begun to see the re-emergence of the contract-for-deed.

A contract for deed or CD, which is also known as a land contract, carrying a note, or owner financing, is a duplex sale where the present duplex owner acts like the bank for the buyer.

While I wrote about this a while back, it certainly is worth revisiting.

So what are the advantages of buying a duplex using seller financing?

  1. There are no loan origination fees.
  2. The sale can close quickly.
  3. There are no limits to the number of duplexes you can buy this way.
  4. Owner financing doesn’t show up on your credit report.
  5. The seller may be willing to accept an offer from a buyer with less than perfect credit.
  6. The seller may accept a higher down payment.

Of course, there are disadvantages to buying using owner financing as well, including: Read the rest of this entry »

Let A Duplex Put Your Kid Through College

said on October 27th, 2011 categorized under: Buying A Duplex

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duplex funds collegeMany duplex buyers I work with are first time home buyers who intend to start a family in the near future.

Their goal is to live there until their family is of the size that a single family home is more suitable for their needs. At that time they will buy a house, and keep the duplex and its cash flow as the college fund.

So what if your kids are already in junior high or high school and you’re lookiing down the barrel of college tuition without a duplex in your portfolio?

What about buying a duplex near a university now?

Many parents know in advance their children are leaning toward a specific college, or, that they can only afford to help with tuition at a local university.

And yet, regardless of the cost of tuition, one of the most expensive components of higher education is on or near campus living.

What if you already owned a property with enough bedrooms for your children to have rent-paying roomates, allowing your child to live rent free?

University communities have not been unscathed by the foreclosure crisis. Whether it’s a duplex by the University of Minnesota or a condo just blocks from Arizona State University, there are many distressed property opportunities for forward-thinking parents and investors alike.

During the boom, these university duplexes tended not to cash flow.

And now?

Not only do they pay for themselves, but the cost of a Golden Gopher sweatshirt or Sun Devil window sticker or two as well.

Why I Can’t Tell You How Much That Duplex Offer Was For

said on October 20th, 2011 categorized under: Buying A Duplex

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duplex sales price confidentialWhen I tell a duplex buyer we can’t see a property because the seller has already accepted an offer, I am often asked how much it sold for.

My answer is always the same.

 “I can’t tell you.”

I’m not trying to be secretive or evasive. It’s just that even if I know the answer, the law prohibits me from telling anyone until the sale of that property is complete and title has changed hands.

Realtors who list duplexes for sale have a responsibility to the sellers they represent. And that is to act in their best interest at all times.

Imagine for a moment that the duplex agent and seller have agreed to put a property on the market for $200,000. The seller is extremely motivated, and so when an offer comes in at $150,000, he accepts it immediately.

The buyer has a few contingencies, or conditions, that have to be met in order for the contract to be fully executed. He has, essentially said to the seller he will buy the duplex provided everything checks out OK in an inspection, and of course, provided he can get a bank loan.

While the buyer and seller are negotiating any issues that may have come up during the inspection, you tell your Realtor you love the duplex and would pay $200,000 for it all day long.

Read the rest of this entry »

Comments Off on What You Should Know About The Duplex Realtor Whose Sign Is In The Yard…

duplex realtorIf you see a “for sale” sign in front of a duplex you like, how do you get in to see it?

Probably just call the agent whose sign is in the yard, right?

But here’s something you should know when you do. That agent represents the seller.

As in acts in the seller’s best interest in all times.

Not in your best interest.

Who’s looking out for what’s best for you, the duplex buyer?

Well, unless you have a Realtor representing you, no one but you.

Most buyers who are just getting started think in order to see a duplex that’s for sale, they need to call the Realtor who has it listed.

The reality is, however, any agent who is an active member of the Multiple Listing Service can show you the property. And if you’ve signed a Buyer’s Representation agreement with that agent, they will be charged with giving you a more objective opinion and acting in your best interests.

This is in addition to hustling and trying to find you a duplex that’s a great fit for you and your needs. This includes alerting you to properties the minute they come on the market, drop in price, and networking with other Realtors to find you something before it even comes on the market.

And those services don’t cost you a thing. Buyer’s agents are paid as a result of the sale of a duplex; usually out of the proceeds of the transaction.  You don’t have to write a check, pay an hourly wage, or even reimburse the agent for gas.

So what if you’re working with a Realtor who’s a duplex specialist to find the right property, and she either has one either actively on the market or unlisted that’s absolutely perfect for you?

Well, in that case, the agent needs to work in both the duplex buyer and duplex seller’s best interests. In Realtor-speak,this  is called “dual agency”, where the agent has to try to find a win-win solution.

If you’re in the market for a great duplex, the best way is to have a Realtor working hard on your behalf.

Minneapolis Duplex Sellers Stick With Tradition

said on October 11th, 2011 categorized under: Buying A Duplex

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Duplex and Stacks of Money Isolated on a White BackgroundThank goodness for traditional Minneapolis duplex sellers.

You know who they are. They’re the ones who have equity in their duplexes and as a result, don’t have to get a bank’s permission to sell them.

Those sellers were responsible for 43.5 percent of the duplex sales in the Twin Cities the week ending October 1.

They also contributed 56.25 percent of the newly listed duplexes, triplexes and four unit buildings.

Compare this to the same week one year ago, when traditional sellers were responsible for just 15.35 percent of the duplexes sold and chipped in 48.27 percent of the new listings.

Because of these equity duplex sellers, the week saw an average off-market list price of $132,021. Although this figure will likely drop when those duplex sales are closed, this number is nonetheless up considerably from last year’s sold price of $111,646 for the week.

The single family home market continued to see inventory shrink, with a 21 percent drop of new lisitngs week over week.

Meanwhile, pending home sales saw a weekly spike of 32.7 percent over last year’s mark.

In all, there are 22.8 percent fewer homes on the market at this time than there were one year ago.

As these reduced numbers may well be a result of the bank foreclosure freeze, it’s promises to be an interesting winter.

Why Your Realtor Won’t Buy You A Duplex

said on October 10th, 2011 categorized under: Buying A Duplex, Selling A Duplex

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duplex dollarIn the last several weeks, I’ve had several buyers and sellers ask me to give up all or part of my previously agreed upon commission on a duplex sale so they can either pay less or net more.

My answer was “no”.

Yes, real estate commissions are negotiable.

And I realize every get rich quick real estate seminar or web site encourages you to ask your Realtor to financially contribute to the sale. After all, the thinking goes, you’re going to be giving that agent “so much business” they’ll be glad to trade hundreds or thousands of dollars for the opportunity of your continued loyalty.

Besides, Realtors make so much money, they can afford to give up some or all of their commission, right?

Wrong.

In 2010, the average income for a Realtor was $34,100. This was down 4.5 percent from the average Realtor income in 2009.

Compare this to 2002, when the average Realtor earned $52,100; 34.7 percent than they do almost a decade later!

And that figure includes agents who’ve been working selling duplexes and homes for more than two years.

Realtors who’ve been in the business two years or less earned, on average, $8900.

Out of that income, Realtors pay for gas, car insurance, desk fees, errors and omissions insurance, marketing of their listed properties, mandatory continuing education, MLS dues, cell phone and Internet bills, open house signs, the installation of signs in yards, and a thousand other expenses associated with running a business.

All of this in the worst housing market in decades.

I absolutely love what I do. And I am happy to work long hours for clients who see the value in what I do; whether it be finding them a non-MLS duplex that suits their needs, or guiding them through the complicated process of a short sale.

But unfortunately, Duplex Chicks have bills to pay too.

Pumpkins Mean It’s Time To Call The Duplex Chick

said on October 6th, 2011 categorized under: Buying A Duplex

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buying a duplex PumpkinI know the holidays seem far away – but once Halloween gets here, well, you know how fast time flies.

What does that have to do with Minneapolis duplexes?

Well, many of my clients are ex-Minnesotans who are thinking of moving home for all or part of the year. As a result, they want to look at duplexes over the holidays.

The trouble is, especially in a market where duplex inventory is down, there isn’t very much to see.

Now I wish it were as easy as just running down to the duplex store, finding one in your size, trying it on and buying it. But right now, it takes a lot more leg work than that.

Given enough warning, I can probably find exactly what you’re looking for -whether it’s currently on the market or not.

So if you’re coming home in the next several months, drop me a line or call, Soon.

That way, when you get here, I’ll have duplexes to show you.