MEET, LEARN, BUY

As the housing market softens, membership in a local real estate investment club is growing.

"People are hungry for real estate investing advice," said Noel Schewe, who started the Minneapolis-based Real Estate Investors Association (Mpls REIA) in 2005.

Over two years, membership in the club, which offers networking meetings and classes on investing, has risen from five to 100 despite the fact that many others have turned their backs on real estate.

"Amidst all the doom and gloom for sellers, there are lots of opportunities to buy," said Schewe, an experienced real estate investor who also trains sales agents at Exit Lakes Realty in Wayzata.

Some members say that with 10.47 homes on the market for each active buyer, according to the Minneapolis Area Association of Realtors, and the median sale price in the Twin Cities metro area falling, now is a good time to be an investor.

"This is what buying low is all about," said Jason Cramer, a Mpls REIA member, who has turned his hobby into a career. He recently opened a business that buys and sells distressed properties.

But with market conditions changing and inventory at record levels, club members, who pay $150 to join, are learning that it's not as easy to rehab a home and quickly flip it for profit.

"Today you need a long-term exit strategy," said Schewe. "Plan to hold onto the property for a while and you'll make money in the long run."

But holding onto the property involves becoming a landlord, renting it out and maintaining it.

For many Mpls REIA members, who own anywhere from one property to several city blocks, the meetings are a place to network and learn from others' mistakes.

"Buying and selling real estate is a complex process, and people need mentors and fellow investors to give them advice," Schewe said.

And to spread some optimism, too. Like some industry experts, Mpls REIA investors are predicting the Twin Cities housing market will bounce back after excess inventory has been snapped up, and values will climb to realistic levels.

"It's the lure of potential wealth that keeps people in the game," Schewe said.

Here are profiles of several REIA members:

ANDY PRASHAD, EAGAN

Years he's been buying and selling real estate: 20.

Investment philosophy: Make sure the numbers work so you have cash flow to put toward the next purchase. Rent the property for five to seven years before you sell. The days of rehabbing and quick flips are gone.

First buy: A duplex in Minneapolis that he fixed up, lived in one side and rented the other.

Favorite type of property: Single-family homes because of their good rentability.

Recent buy: A good-condition 1980 Eagan townhouse. He will rent it for three years and then the current renter has plans to buy it. He bought it for $175,000 and forecasts a 3 percent appreciation when he sells.

Day job: Realtor for Counselor Realty in Edina.

Missed opportunity: "I wish I would have bought 10 single-family homes 10 years ago," he said.

HEATHER WOMACK, MINNETONKA

Years she's been buying and selling real estate: 12.

Investment philosophy: "Someone else's burden is your opportunity," she said, noting that prices are significantly lower than they were two years ago.

First buy: 1960s two-bedroom rambler in Richfield. She sold it seven years later for $48,000 more than she paid.

Favorite type of property: Single-family homes because renters take better care of the property than they might in a duplex or triplex.

Recent buy: A 1968 single-family home in Minnetonka. "I updated and upgraded what was a dive," she said. She plans to live in it with her family for two years, rent it out for three years before selling it for the tax benefits and a profit of $70,000.

Day job: Owns Condico Properties in Minnetonka and works with clients who invest in commercial and residential properties.

Missed opportunity: "I should have bought property in Florida 10 years ago," she said.

JASON CRAMER, CORCORAN

Years he's been buying and selling real estate: 15.

Investment philosophy: Buy rental property for a long-term hold and you can weather the storm of a slow real estate market. "Mortgages are harder to get, which will increase the demand for rental property," he said.

First buy: A northeast Minneapolis duplex. He lived in one side, rented the other and upgraded it over the years.

Favorite type of property: Single-family homes that are below the median price of the area. "It's the sweet spot of the market," he said.

Recent buy: A Plymouth condo for $70,000; did some cosmetic fix-ups and sold it for more than $100,000.

Day job: Owns HomeVestors in Columbia Heights.

Missed opportunity: "I should have bought every duplex for sale in northeast Minneapolis in 1994 and sold them 10 years later."

Lynn Underwood • 612-673-7619

Lynn Underwood • lunderwood@startribune.com