"There's A Real Estate Gold-Mine On The Iron Range!"
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I've recently returned from a 300 mile 'round-trip drive to the Iron Range in northern Minnesota - where I met a very interesting guy named "Sunny" - who rehabs and manages investment-properties that cash-flow $200, $300, $400 or MORE each and every month!
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Erik "Sunny"
Sundquist is his name - and he's a 28 year old real estate-developer
and owner of the biggest property management company on the Iron Range.
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I met Sunny through another investor/friend, and after talking to him on the phone for quite some time I realized that he's doing something extraordinary in the real estate market of northern Minnesota by buying undervalued houses and turning them into cash-flowing investments.
So I didn't hesitate to take him up on his offer to visit and see first-hand how he is simultaneously transforming his community AND building wealth with real estate!
Sunny's the kinda guy you'd want on your team. He walks a bit like a "bull-dog" and speaks humbly with a bit of a "ya you betcha" Minnesota-accent - and when he greeted me (and my investment-partner) at his office at 9am - he looked us straight in the eyes and immediately began explaining the story of the Iron Range to us - with his clear, concise and no-nonsense presentation.
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"Little Cities Built Around BIG Holes"
The Iron Range (about 60 miles north-west of Duluth and Lake Superior) began to develop in the early 1900s in northern Minnesota when large deposits of iron-ore and taconite were discovered - giving rise to a mining-boom. "Our community consists of several little cities (that range in population from 3-7 thousand people) that are built around BIG holes", says Sunny, who told us that 75% of the iron-ore produced during World War II, came from the mining-communities of northern Minnesota.
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Aurora Biwabik Buhl Chisholm Eveleth |
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Gilbert Hibbing McKinley Mt Iron Virginia |
"There's a lot of pride here in our blue-collar mining community" says Sunny, who also owns a popular restaurant (called "Bullfrogs") in Virginia. "Most people who live here are either miners, or work in an industry that serves the mining community".
Most of the houses were built in the 20's, 30's and 40's during the peak of the mining industry - but recession and a reduction in the production of iron-ore caused a collapse in the Iron Range's economy in the 1980s at the rise of the information age.
This change in the economy and jobs caused many homeowners to simply leave the area starting in the 80's, walking away from their houses, or selling them dirt cheap (as values fell) to whoever would buy. Many of the children of mining family's also moved away - off to "the city" for more opportunities.
However the community still continued to survive, many of the renters receiving section-8 assistance from the state, with mines still producing jobs mining taconite (a lower-grade ore). "We have A LOT of old-timers here", says Sunny, "and when they pass away, their kids usually just want to sell their house as quickly as possible - and we (Sunny and his wife have a team of 5 employees) acquire a lot of inexpensive properties this way".
Being a management company as well - Sunny also finds a lot of good places that were just poorly managed by other people because they just didn't know what they were doing. In these situations he's able to assume properties for cheap, fix 'em up, and turn 'em into money-making rental units!
Eureka! - Copper, Nickel, and Zink
Very recently (within the last few years) NEW deposits of Iron Ore (as well as Copper, Nickel and Zink) have been discovered - giving rise to a $2 BILLION new mining project - and 1.5 billion dollars of this endeavor is subsidized by the government.
"This new mining project will create 700 full time jobs and 1200 temporary jobs that will pay $40k-$50k per year with benefits - plus all kinds of spin-off jobs too.", says Sunny, "and this is why I believe we are on the verge of the next big real estate boon here on the Range".
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Sunny began purchasing and managing properties on the Iron Range back in 2003. He gets up every day at 5AM and then drives around town inspecting his properties, looking for new opportunities, talking to people, and making sure that everything is on the up and up. "We do a monthly-walk though of each property to make sure there's no funny-stuff going on. I want this community to be a safe home for my own children, as well as the children of my renters.", says Sunny. |
Having this intimate knowledge of the area and how the real estate market works there, has positioned Sunny in the middle of what he says is a "real estate gold mine".
"I get about 10 calls per day of people looking for a place to rent - and although the economy is improving, 60% of all the calls that I receive are still Section-8, which is great for real estate investors.", he says. "We're gonna be the first group to step up to the plate and take advantage of this extraordinary-opportunity here!"
Enter the BIG BOX Retailers...
There is already a Target store in Virginia as well as a Walgreens store in the area - and a SUPER-WALMART and MENARDS are slotted to come in in 2009. These "Big Box" retailers will create many more jobs, and Sunny says that having places like Menards in town will encourage people to start reinvesting in the upkeep of there homes again - which will help to raise the values.
Sunny drove us around for a few hours - between these small cities (while taking calls and checking on properties) - to show us several of the houses he owns and/or manages - as well as many that he is considering as future investments.
What's interesting about the Iron Range is that there did not appear be much of a difference in the quality of the neighborhoods, I mean, ALL of the housing looks a little older. "They ain't always pretty, but they're sure good money-makers", says Sunny, who says he won't touch a property unless he knows he can make at LEAST $200 a month in positive cash-flow from it.
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Sunny - Checking On A Property |
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Sunny finds duplexes, triplexes and quads (he even has a 10-unit apartment) that he rehabs and turns into safe, drug-free, warm and affordable-housing. "We thoroughly screen all renters with background checks - and I won't rent to anyone with a criminal history.", says Sunny.
What Does All This
Mean For You The Investor?
Generally, for new (and experienced) investors alike, there are typically 3 things that are usually considered to be important when buying investment properties - they are:
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1. Cash-flow 2. Appreciation 3. Management |
I will address each of these subjects in order below...
The Cash-Flow
We've already discussed that Sunny's Iron Range-properties produce an almost unheard of amount of cash-flow ($200 and UP per month). This in itself is an amazing and unique opportunity in the world of real estate investing!
One of the reasons that these investment-properties produce this level of cash-flow is because Sunny scours the MLS daily - looking for good deals - undervalued homes that he can purchase cheap, rehab and keep rented. He knows what to look for and has a highly effective system for bringing it all together so that the TENANTS are paying down the mortgage (not you).
Sunny's grandfather (who Sunny says has "a ton" his own investment properties as well) is a VERY well know builder who has built numerous recognizable-developments through out Minnesota, so Sunny grew up around the construction and contracting industry.
He still has close-ties in the lumber and building-materials industry and is able to get all or most of his rehabbing-supplies AT COST from the distributors!
This nice benefit really helps to "tip the scales" on the investment-end of things, because it means that Sunny can bring all his properties up to code for a fraction of what another developer would have to pay (passing the savings on to the investor, i.e. YOU).
This savings is what makes Sunny's Turn-Key rental-units so appealing! Depending on what type of investment you want to purchase (a single family home, duplex, tri, etc.) you can get these units starting as low as $50,000! (which is currently almost impossible to find anywhere else).
Appreciation
Another very important factor to investors (of course) is appreciation...
Given the fact that there is another BIG resurgence in the mining-industry coming (with the 2 BILLION DOLLAR project) and the addition of the big retailers (Target, Walgreens, Super Walmart, Menards, etc.) and Sunny says that there's gonna be an EXPLOSION in the value of housing over the next 4-6 years!
So in true investor-fashion, our goal is to buy low (hold indefinitely with cash-flow) and sell or refinance at some point in the future - moving that money into more wealth-building opportunities. This is why NOW is the time to buy - especially in the Iron Range!
In addition to cash-flow, the tax benefits you get, AND the appreciation that's available to you - Sunny's Turn-Key properties come with one more special benefit for investors - and that is...
Great Management!
After meeting with Sunny and spending the day with him, it became clear to us that he's a dependable and trustworthy guy who takes his role in the community SERIOUSLY.
...And given the fact that his Turn-Key properties come with rock-solid property-management built right in - makes this opportunity a NO-BRAINER if you want to successfully own money-making investment property!
The properties that Sunny manages have a 95% rental-occupancy at any given time - this means that as an owner (for the usual management fee) - all YOU have to do is sit back, collect the rent checks, and pay your mortgage on time - and make money - while Sunny and his team take care of literally EVERYTHING else for you!
"We do a complete background check which includes their credit history and an income verification before renting", says Sunny, "Any potentially good tenants that have a credit score that's below 580 are required to get a co-signer on the lease - this helps to ENSURE that all rents are paid on time!"
Sunny pointed out that if someone's debt-to-income ratio is insufficient for a particular property - rather than turning them away - he strives to find them a property that is more appropriate for their budget. This is just another example of his commitment to the community.
* Available Iron Range Investment Properties * |
"We strive to provide properties that have tenants already in them", says Sunny, "And I won't sell a property that isn't a good home - because I know that I'm the one who's gonna be caring for it.".
OGK="Only God Knows"
If you will take a look at the available properties above (click on their images) you will notice that along with providing a solid Turn-Key investment property - Sunny also includes what he calls a "Cash slush-fund for OGK".
My partner and I were perplexed by this term and asked Sunny for an explanation...
Sunny chuckled and said, "I know it's kinda corny, but I call it "Only God Knows" because rental-units (just like anything else) need repairs from time to time - and only God knows what that could possibly be."
The beauty of this concept became clear to us shortly there-after when we realized what a "blessing" this feature actually is for us investors! Instead of the worry of having to pay for unexpected-repairs or fees out of our pockets - Sunny contributes a HEFTY cash fund with his properties for us to use whenever it's needed. - This is awesome!
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"I just think it's a great way to take the worry and stress out of the equation for investors", says Sunny, "if anything ever needs fixing - they can simply use the slush-fund and still maintain their cash-flow."
Let's Recap...
There's a great guy named Erik Sundquist (whom we call Sunny) that lives on the Iron Range of northern Minnesota with his wife and kids.
Sunny owns owns and operates the single largest property management company on the Range and buys undervalued housing - fixes them up - and turns 'em into CASH-FLOWING rental units.
He provides these "up to code" properties as Turn-Key investments (for you and I to buy) - complete with renters, management, a cash fund that's reserved for unforeseen repairs and/or upgrades AND can produce $200 or MORE per month in CASH-FLOW!
Sunny cares about his community and says it's his mission to help EVERYONE get rich - one property at a time - while providing safe, warm and affordable housing for the people of the Range.
The Iron Range is currently entering into a resurgence with a $2,000,000,000 (2 BILLION Dollar) project which will create hundreds (if not thousands) of well paying jobs in the community.
"Big Box" retailers such as Target, Walgreens, Menards and a Super-Walmart are entering the community (creating MORE jobs, as well as a projected increase in property values).
Sunny says that this is the opportunity of a lifetime for investors!
I like numbers because numbers don't lie - they make it possible for people like you and I to make money in real estate. The numbers on these investment opportunities tell it ALL - if you buy these - you will be *making money*!
But you must take action for this process to work...
Follow these steps and I will walk you through the process to becoming the proud new owner of a cash-flowing investment property Minnesota's Iron Range! Steps To Purchase
To your success,
~ Alex Anderson
Investment Property Specialist
1-888-253-1193
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