The 1928 Deco Powder Plex
Meg and I were ready to dive into a banana nut waffle at St. Paul’s “Black” Waffle bar on a cold, November morning when Steve’s call came through. “The seller accepted our offer”. A tinge of exuberance immediately followed by a flow of anxiety, and correlated loss of appetite.
Prior to an offer being accepted buying an investment property was well thought out, but still just a concept. The chase for the perfect property felt like a fun challenge - an addicting game even. Once the offer was accepted, however, the emotion ran dry and the mind quickly shifted to the “how”. To pile on, I vividly remember the markets of 2008, and I always told myself I would patiently sit on the sidelines of this crazed, “inflated” market waiting for the perfect time to strike. But here we were… about to invest at the ”top” of the market in a somewhat unfamiliar neighborhood: Powderhorn Park.
From the onset, we partnered with Rare Form to find a classic property to pour our time, money and efforts into. This was a family play… one that would lead to financial freedom and pride-of-ownership for years to come. Minneapolis is not short of quick-hitting apartments full of stale, trendy finishes, and monotony madness. We wanted something different. Something that carried the potential to have a lasting impact, get better with age, and be forever relevant. A Perennial.
Thanks to our no-nonsense, experienced, assertive guide in Rare Form Properties, Meg and I realized we found something special in the Brick, Art-Deco Quadplex of Powderhorn, one in which we now affectionately call “PowDeco”.
Walking up to PowDeco you quickly notice the permanence of its brick structure. Traditionally, when I approached brick houses they felt cold and stately. This building, with its soft Art Deco lines and decorative features, felt classic and welcoming.
Walking through each of the four units was akin to stepping into a polished antique store. Structure and components nearly all original. Farmhouse sinks, crystal door knobs, floor-to-ceiling birch cabinets, arch separating dining and living rooms, radiators, cast-iron bathtubs, etc. However, the presence of neglect lingered. The building, although functional and charming, wreaked of a complacent landlord. The type of owners who likely had the building paid off for 20+ years. This complacency is frustrating to see, but it does create opportunity.
Opportunity, however, doesn’t just happen. Especially for two novice investment property owners. In our case, the pursuit to seize and add-value took shape over multiple sessions with RareForm Design. RareForm isn’t a broad-focused shop. They are in the market EVERYDAY and this is what they do. Restore classic homes to their original glory. They know what matters, they know what future residents will value, they know which laborers to trust and they know how to sequence a complex remodel, and execute. In short, they were the leader that had the ability to see the forest for the trees.
Launching into demolition was relieving. The work had started. Then..dust, grime, surprises, improvisation, revised design decisions, long-nights, 50+ trips to Home Depot, hunting for lights, insanely hard work by the crew, more design decisions. To boot, this 2-month span would be what my wife and I will forever refer to as our “babymoon”. It’s popular for pregnant couples to travel to exotic locations prior to taking on parenthood. For us, we threw ourselves into a 1928 Art-Deco remodel. We (mostly me) wouldn’t have it any other way.
I’ll let the before and after pictures do most of the talking. Refinished millwork galore. Fresh appliances. Custom Cabinetry. Honed Granite. Refinished Oak Floors. Hand-Made Tile. Glitzed-Out Radiators, and of course, Custom Lighting throughout. Couldn’t be happier with both the space results and the residents that appreciate their new homes.
We are still in the infancy of this journey, but so far, I wanted to take you through my big learnings. I hope some are helpful. Hindsight and 6 months passing helps with perspective...
Financial spreadsheets belong in the garbage.
I am a self-confessed finance and investment nerdball. Specifically, I am a recovering MBA grad and have worked in commercial real estate investment and finance for 11 years. This experience did not serve as a plus. Returns from properly restoring a classic don’t necessarily manifest themselves in the form of Year 1 Net Cash Flow. There are, of course, all the positive emotional returns. Additionally, there are a variety of non-tangible financial returns. For instance, how do you put a value on the ability to find tenants, quickly, who passionately care for your space treat it like a home? Financial returns are the byproduct, not the aim, and will happen over time if the RareForm process is followed. Budgets and game-planning help but shouldn’t rule the roost.
Deets and Quality.
The go-to mantra in real estate is location.location.location. Clearly important. However, in creating Perennial spaces, via a remodel, what matter most is details.details.details. Painstaking Details. This is where Rare Form’s Design and Execution team glisten. In hindsight, it’s clear all of these details make the entire process fall-into place. It’s not fun in the moment, but it is worth every ounce of energy. Detail-oriented and quality spaces allow one to ignore all of the rental comps your appraiser identifies and create your own market. People appreciate quality. It’s scarce.
Shatter the Rear-View Mirror as you embark.
Forget the low-prices that were available less than 8 years ago. I didn’t buy any investment real estate from 2010-2016 purely because it was tough to stomach the fact that I would have paid more, in comparison to the baseline prices of 2008-2010. A fear-based strategy. Really, how silly? Imagine your parents or grandparents paying for property at the basement prices of 2009? Most wouldn’t have because they have reference points and prices dating back 25-50 years. Times change. Preferences change (more renters now more than ever), inflation occurs, interest rates change, incomes change. The market is ever-changing and if you intend to buy and properly hold your investment for the long-term it will likely solve the timing dilemma. Plus, perfectly timing the market is impossible.