Fixer Upper vs. Townhome investment? (Minneapolis, Duluth: for sale, foreclosures, renter)

[mnswerin]

Is it possible to buy a home with a $140,000 budget which meets these requirements:
-30-40 minute commute to Minneapolis, MN
-safe, family friendly neighborhood
-3 bedroom, 1.5 bathroom+
-2 car garage
-access to shops, parks
-good location for younger couples (twenty-something)

Should we focus on townhomes or fixer uppers? Which is a better 5-10 year investment for couple looking to expand family within a few years?

Thank you!

[Beenaroundabit]

I don't know what the prices are like now, but the last time we lived in MN, we bought a townhome in Burnsville for 120K. This was in 1998, so that's probably increased quite a bit, but with interest rates low and a depressed market, you still might be able to pick one up close to or even within your budget. Burnsville is also well within your commuting range.

There are a couple of older townhoome communities in Burnsville where the homes are well-taken-care of and are quite large (because the houses were built 30+ years ago). We looked really hard at one - Walden - then ended up buying in a community called Birnamwood. Both were nice communities, but we just happened to like the one home that was available at the time in Birnmawood better. Our 3br, 2ba townhouse had over 2600 SF, which is huge by today's standards.

If we were headed back to the TC instead of Duluth, that's where we'd buy - probably wouldn't even look at any other community. Ours was well-kept, good snow removal and landscaping, and accessible to everything - yet still a bit private due to the mature trees and shade.

[golfgal]

A single family home is going to be a better long term investment for a young family. Townhomes are way overbuilt right now so resale on them isn't great-not that the housing market is great for anything right now. Where in Minneapolis are you commuting? That can make a huge difference. Yes, you will be able to find what you are looking for especially with some foreclosures and whatnot happening. It won't be easy but there are options.

[Robert P Stewart]

As of 11:37AM CST, there are roughly 50 single family homes that I would say meet that requirement. Too, there are about 110 townhomes that meet that set of criteria.

The homes are out there for sure. As far as investment, there are only a few reasons to purchase a townhome and investment potential is not one of them. Single family homes will always have a higher resale value simply because they are a) more desirable, and b) don't have the economic disadvantage of association fees. A $140,000 townhome with $150 monthly association fees will feel like a $160,000 home financially.

Robert

[Robert P Stewart]

OK - too quick - there are indeed reasons to buy a townhome for an investment - it really comes down to your financial goals and your expectation of return of investment.

In my practice, I don't typically recommend townhomes as an investment for numerous reasons.

[dscurlock]

I would think he would want to invest, fix up, and rent out...it is easy to find a renter then it would be to actuall turn over a sale. I actually rent from someone that owns this townhouse, and the one next door. I live in a 3 story townhouse in MN and pay $1165/mo for rent. I really do not need all this, and I am thinking about downgrading into a trailer park and my rent would be half that. I have to start thinking about my future, not the future of the townhouse owners.

[Slig]

Originally Posted by mnswerin

Is it possible to buy a home with a $140,000 budget which meets these requirements:
-30-40 minute commute to Minneapolis, MN
-safe, family friendly neighborhood
-3 bedroom, 1.5 bathroom+
-2 car garage
-access to shops, parks
-good location for younger couples (twenty-something)

Should we focus on townhomes or fixer uppers? Which is a better 5-10 year investment for couple looking to expand family within a few years?

Thank you!

There are single family homes for sale in my neighborhood that meet all of those requirements. In fact I purchased a house in that price range with all of the above except the bathroom last May (we're adding a half bath very soon so then it'll meet every one of your requirements ). There are always more kids outside and playing in this neighborhood than any of the suburban neighborhoods I've lived in, so I would not shy down from calling it family friendly.