There’s No Free Lunch With Minneapolis Duplex Ownership

nudelkäseauflaufAmong the many advantages of being a Realtor with a national and internationally known company like Coldwell Banker are the networking and educational opportunities available as a result of having a presence in so many diverse locations.

For example, today Coldwell Banker Burnet brought in Jon Swire, a multi-residential investment agent from Coldwell Banker, Beverly Hills, Calif., and author of the book, There’s No Free Lunch In Real Estate.

An income property owner himself, Swire stressed time and again in the day-long seminar why now is one of the best markets in years to get started in real estate investing.

First, interest rates on mortgages are at historic lows, meaning the cost of the debt on an investment property is cheap.

Second, due to the foreclosure crises and overall meltdown in the real estate market, prices are low.

Finally, Swire reminded us that all the money the federal government borrowed to fund the stimulus package will ultimately result in inflation. Inflation will cause the prices of everything to increase; including rent and the purchase price of the properties themselves.

Granted, after the binge and purge of the market the past few years, it’s easy to experience a loss of appetite for real estate investing. What if property values continue to decline?

However, many of today’s foreclosed duplex properties are the result of speculative buyers who failed to do adequate cash flow analysis at the peak of the market.

Remember, a property with a negative cash flow is a liability, not an asset. As long as a duplex, triplex or fourplex generates enough income to cover its debt and expenses, you can hang on to it indefinitely; regardless of what the market is doing.

If you’d like to learn how to do the numbers, drop me a line.