Archive for the 'Buying A Duplex' Category

What? I Need More Insurance On My New Duplex?

said on October 3rd, 2011 categorized under: Buying A Duplex

Comments Off on What? I Need More Insurance On My New Duplex?

Sign your name here on the mortgage applicationOne of the most common things I find duplex buyers confused about at closing is title insurance.

After all, most have already had to buy an insurance policy to protect the property in the event of a catastrophe.

So why do you need title insurance?

Title insurance is usually purchased the day you buy the duplex and involves a one time fee that’s part of your closing costs.

It protects you as the duplex owner in the event there are any problems with the property’s title that weren’t discovered by your title company or escrow officer prior to closing.

What kind of problems could those be? Well, let’s say one of the property’s previous owners had some construction done on the property but didn’t pay the contractor; who was slow to put a lien on the property.

Or, perhaps a previous owner failed to pay property taxes, or there were heirs to the property who only now discovered they’d inherited it.

In each of these cases, you could find yourself having to hire an attorney to defend you and your property from these claims.

An owner’s title insurance policy would cover those expenses for you.

And those expenses can be significant.

I had one buyer whose $700 title insurance policy covered almost $100,000 in legal fees and settlement charges.

For what? A litigious neighbor who simply liked to sue people for money involving a driveway easement.

And just this morning, a duplex seller I was working with, was glad he was protected by the policy he’d purchased with the property. It seems the previous owner hadn’t notified anyone his sale was part of a divorce.

As a result, his ex-wife could have a claim to the duplex, even though he no longer owned it!

I realize buying a duplex can be an expensive endeavor. But title insurance is something you should never be without.

Where Do You Want Duplex Investing to Take You?

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

Comments Off on Where Do You Want Duplex Investing to Take You?

station wagon duplex tourWhen I was a kid, every now and then my parents would say, “let’s go for a drive”.

They never seemed to have a specific destination in mind. They’d just load us all in the station wagon and take off.

 Gas was cheap, so I think it was their idea of inexpensive family fun.

Of course, nobody can afford to do that today.

Every now and then, some of the real estate “investors”  who call me on the phone remind me of my parents in those early days.

They don’t seem to have a particular plan or destination.

For instance, when I ask them what kind of cash on cash return they want on their money, I am greeted with silence.

This is usually because they have no idea what I’m talking about.

Cash on cash return is simply the amount of money you take out of a duplex investment every year compared to the amount you put in.

For example, if a duplex has a positive cash flow of $5000 a year, and your down payment on it was $50,000, then your money is earning a 10 percent cash on cash return. (5000/50,000 = .10 or ten percent).

Now, if that same $50,000 was earning $10,000 a year in some other type of investment, like stocks, a money market account, or business investment, it would be earning a 20 percent cash on cash return.

So why would you ever move it into something that makes you less?

Conversely, if that money’s generating a lowly 2 percent return for you in a savings account, why on earth would you leave it there?

What’s your ideal return on your money– provided there’s not too much risk?

If you know that before you begin, you’ll never end up financially lost.

3 Facts About Minneapolis Duplex Sales

said on September 26th, 2011 categorized under: Buying A Duplex, Selling A Duplex

Comments Off on 3 Facts About Minneapolis Duplex Sales

three reasons to work with a duplex specialistI went out of town for a few days last weekend.

While I was gone, I managed to help two clients write offers on Minneapolis duplexes.

Neither was  an active listing on the Multiple Listing Service (MLS).

In fact, one was a property where an accepted offer on it was about to be cancelled. The other duplex was not coming on the market until next year.

This proves three things I’ve been saying for months.

1. It’s a great time to sell a duplex.

2. If you want to buy a duplex, working with the right Realtor will help you get access to properties you either won’t find on your own, or would be missed by an agent who doesn’t specialize in duplexes and small multi family properties.

3. If you’re thinking of selling, but aren’t quite ready to stage your property or leave the duplex for showings, letting a Realtor who’s a duplex specialist know, and/or agreeing to do a “pocket listing” with her, may help you avoid the inconveniences altogether.

Let me know if you’re either in the market to buy a Minneapolis duplex or sell one. While values are nowhere near where they were in 2005-2006, the market is better than you think.

Why You Won’t Find A Great Duplex By Looking For A Sign

said on September 22nd, 2011 categorized under: Buying A Duplex

Comments Off on Why You Won’t Find A Great Duplex By Looking For A Sign

Property and duplex for sale If you’ve come to the realization it’s a great time to invest in real estate, and want to buy your first duplex, how on earth do you go about finding one to buy?

Should you drive around the neighborhood looking for real estate signs?

Check Craigslist?

Pick up one of those free Real Estate guides or look on Realtor.com?

Since I’m a Realtor, you could argue I’m biased.  And yet, I truly believe if you’re serious about duplex investment, it is the best way to find the right property to buy.

With the limited inventory in today’s Minneapolis duplex market, many buyers working on their own call because they’ve recognized a duplex with my “for sale” sign in the yard, or they saw in an ad, is a great deal.

The trouble is, by the time they’ve “found” the duplex, it’s already sold.

Read the rest of this entry »

How Walkable Is Your Duplex?

said on September 21st, 2011 categorized under: Buying A Duplex

Comments Off on How Walkable Is Your Duplex?

walkability of a duplexAs going green has become increasingly important, I’ve suddenly had some of my duplex buyers  me they didn’t like the “walkability score” of a prospective property.

What’s that?

Well, it’s a score that’s calculated by the web site Walkscore.com.

They’ve designed a system where they rate properties according to their proximity to things like neighborhood restaurants, grocery stores, public transportation and recreational activities.

Needless to say, duplexes located in more heavily urban neighborhoods tend to generate higher scores than, say, a duplex planted in the middle of a corn field.

Not only does the site rate specific properties, it also ranks neighborhoods and major metropolitan cities around the county.

It’s no surprise that New York is the nation’s most walkable city. However, Minneapolis is ranked 9th; ahead of Los Angeles, which didn’t even finish in the top ten.

In Minneapolis, duplexes in the Calhoun, University, Seward, and many of the southwestern neighborhoods ranked among the most walkable.

If you’re considering buying a duplex, a walkability score be something you factor in your decision.

Odds are your prospective tenants are doing just that.

The Ups And Downs Of Duplex Styles

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

Comments Off on The Ups And Downs Of Duplex Styles

duplex for saleOne of the many questions most first time duplex buyers ask is, “Which is better? An up/down duplex or a side x side?”

This is usually followed by, “And which duplex is worth more?”

Well, unfortunately, the term “better” is subjective. What’s better to me might not be to you, and vice versa.

Some people think the disadvantage of an up/down duplex is the first floor tenant is subjected to the noise (mostly footsteps) overhead.

Trouble is, side by side duplexes aren’t free of noise either. I once lived in a 1920’s built side x side, and I could always hear my neighbor walking down his hall.

Sure, carpet would eliminate noise in either case. But most tenants today seem to prefer hardwood floors.

How about value? Is an up/down duplex worth more?

Read the rest of this entry »

What’s The Catch In Refinancing Your Duplex?

said on September 9th, 2011 categorized under: Buying A Duplex

2 Comments »

what's my duplex worthWith many mortgage interest rates below 4 percent, it’s a great time to think about refinancing your duplex.

But there’s a catch to refinancing; beyond the requirements of having a job and good credit.

The duplex needs to be worth more than you owe on it.

For some duplex owners, this is a real problem.

So how do you find out what it’s worth? Well, the bank’s going to hire an appraiser on your behalf to offer a professional opinion of the duplex’s value.

And you have to pay for that appraisal whether you get the loan or not.

Yes, I suppose you can go to Zillow and get a Zestimate. The trouble is, they’re usually not very accurate.

But guess who can give you an accurate measure of value — absolutely free of charge?

A Realtor.

Now, I do like to be paid for what I do, and my time, like everyone else’s, is spread pretty thin.

However, I’m always happy to do what I can for a duplex owner thinking of refinancing.

Most of the time, I actually want to see the property. This helps me become further acquainted with inventory, which makes me a stronger resource for my clients.

It also helps me get a read on the challenges and opportunities duplex owners are facing, and an early read on rental market conditions.

If you want to know what your duplex is worth, call me. Even if I’m not in your area, I’d be happy to refer you to an agent who can lend a hand.

Are Minneapolis Duplexes About To Get More Expensive?

said on September 8th, 2011 categorized under: Buying A Duplex

Comments Off on Are Minneapolis Duplexes About To Get More Expensive?

minneapolis duplex valueYou might have noticed there’s a bit of a media buzz about the Twin Cities duplex and apartment vacancy rate.

In fact, Marquette Advisors, the local company that tracks such things, reports at the end of June, the vacancy rate was just 2.4 percent; the lowest it’s been in a decade.

Perhaps that incredibly low number is why people who want to buy a Minneapolis duplex are having such a hard time finding one.

And perhaps that’s why local developers have proposed building as many as 8,500 new market-rate apartments across the metro area.

Remember all of the condos that were built downtown? Well, they’re filling in for apartments at the moment. In fact, Joe Grunnet, of Downtown Resource group, which rents out apartment units, recently told Finance and Commerce they’re renting out about 33 units a month; at $1640 a pop!

Low vacancy rates always result in rent increases. Rent increases always result in higher duplex sales prices; because values are driven, in part, by the amount of rental income.

In other words, if you’re thinking of buying a Minneapolis duplex, waiting to do so might cost you more money.

Duplex Owners Get The Smoke Out

said on September 7th, 2011 categorized under: Buying A Duplex

Comments Off on Duplex Owners Get The Smoke Out

No smokingThere are few things that will cost you more money on a duplex rental turnover than a unit that’s been smoked in.

Yes, I know. Pets inflict their share of damage too. But at least with those you can get a security deposit to help mitigate your losses.

Smoking’s another matter entirely.

Cleaning a smoker’s unit to the point where it no longer smells can be time consuming and expensive; requiring repainting, carpet and blind replacement.

So, is it legal for a duplex landlord to prohibit smoking in the first place?

Yes, because the landlord has the right to set limits on how a tenant may use the rental property– which includes things like pets, noise, and guests.

The easiest time to establish a no-smoking policy is when a lease is first written, whether upon move-in or when an expired lease is up for renewal.

A landlord may also prohibit smoking in common indoor areas, such as laundry rooms, entrances and hallways.

While duplex owners in some parts of the country may also restrict or designate outdoor smoking areas, some states, including Minnesota, limit a landlord’s smoking jurisdiction to indoor spaces. Therefore, be sure to check your local smoking laws.

If a duplex owner is concerned, it is important she do what she can to control smoking in her building.

This can be accomplished by posting “No Smoking” signs, asking people who smoke indoors to refrain from doing so or leave, and using lawful methods for removing anyone who refuses to comply.

Minneapolis Duplex Market Stops And Goes

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

Comments Off on Minneapolis Duplex Market Stops And Goes

duplex sales stop and goThe Minneapolis duplex market sent mixed signals during the week that ended on August 27.

The average list price for a duplex, triplex or four-plex that left the market due to an accepted purchase agreement was $166,932.5. This represents a healthy increase over the average sold price of $111,286.64 for the same week one year ago.

In all, 20 duplex owners received and accepted those purchase agreements. A whopping 50 percent of those duplex sellers did not have to consult with someone in a bank in order to agree to sales terms.

In contrast, while there were 28 pended duplex sales for the same week in 2010, just 17.86 percent of those duplex owners were not selling short or due to foreclosure.

A robust 45 new listings came on the market the last week of August.

While this is up dramatically from 2010’s 32 new listings, I do not perceive this as bad news. In my experience, there simply isn’t enough good inventory for the active duplex buyers  in the marketplace right now.

Of those new 2011 duplex sellers for the week, 45 percent were traditional or equity sellers. This sounds great until that figure is compared to the 59.4 percent of the new sellers last year who had equity in their duplex.

While the data for  the week of Labor Day will be skinny at best, we may yet start to see a market pattern as we round the bend for fall.