Unlocking Minnesota’s Tiny Home Market: 5 Strategies for Success

Michael Stansbury (00:04.062)
Hello everybody and welcome to the Real Estate Pros Podcast. My name is Mike Stansberry and today I have a special guest from Minnesota. Is that how I say Minnesota? That’s it. Megan Sorensen, how are ya?

Megan (00:13.57)
Absolutely. Good Michael, thanks for having me. My name is Megan Sorensen from Minnesota like you said and we’re here to talk real estate and investing.

Michael Stansbury (00:24.76)
That’s right, that’s right. Well folks, before we do that, let me just get this out of the way. Investor Fuel is a mastermind where we help real estate investors, service providers, and real estate and entrepreneurs, two to five X their businesses to allow them to build the businesses they’ve always wanted and allow them to live the lives they’ve always dreamed of. Megan, tell me the origin story. How did you get into real estate? What were you doing before real estate and what piqued your interest to dip your toe into this wild world?

Megan (00:51.82)
I think I’ve always had a niche for, that house is for sale down the road, know, who has it? And, well, I think we were growing up to say, do what you’re good at and stay in your lane. And then I was a dental assistant and I’m like, well, I was a kid, I didn’t want that grown up job. So I became a flight attendant and…

from, it’s like, now is the time to be a real estate agent because I have had all these connections. There’s a reason why they say, find people that know, like, and trust you. And I’ve kind of dabbled in all over the world, so to speak. And my slogan is, you know, I can service Minnesota, but I can help from Minnesota to Zimbabwe.

Michael Stansbury (01:36.289)
Yeah.

Megan (01:36.557)
You know, like you can be a referral agent, you can help people that aren’t in your niche, so to speak. So I’m put here for a special reason to help people and find them the place that brings them serenity.

Michael Stansbury (01:51.458)
Yeah, that’s awesome. So, and what is your market in Minnesota exactly? Are you in the Twin Cities? Are you close to there? What does that look like for you?

Megan (01:57.557)
I service the Twin Cities. I’m in Southwest Minnesota, Austin, Minnesota. I service Southwest towns that have been forgotten about and the value needs to come back and we need to say real estate agents and investors are very much alive and we’re here to help you.

Michael Stansbury (02:19.07)
Awesome. do you work with, so first time home buyers, who do you work with investors or who, who is your clientele currently?

Megan (02:26.464)
I have some of everything. I had a land investor that wanted a section of land, 160 acres, so I can do anything from a first time home buyer and all the way up to commercial. You don’t have to really specialize when you’re in this area. They’ll take a chance on you like the Abba song goes.

They’re going to hire you if they like you and you know, you don’t really have to worry that you’re going to get fired. But some of those, I’ve been hired and fired, you know, in record timing, like in 24 hours. So anything does happen. And you know, if you go out there and try, you’re going to have some stories to tell.

Michael Stansbury (03:02.542)
you

Michael Stansbury (03:09.742)
That’s right, we all have those moments where we fail and those are actually good things. They teach us things if people don’t learn from those. I was reading in a podcast, not reading, a podcast, listening to a podcast where this guy who’s very successful says, you know, I fail nine times out of 10 and I thought, oh, well, how is that? And then he explained it and it made sense to me, but most people just can’t deal with the no and the failure.

Megan (03:36.419)
I know.

Michael Stansbury (03:37.346)
But you’ve got five years into the business and how do you deal with it?

Megan (03:42.248)
you know, sometimes it’s defeating, you feel defeated. And then sometimes there’s that Glenda Baker that you listen to on a podcast that says, you are good enough and you have to tell yourself you’re good enough. And, you know, you have to redirect versus quit and help the people that want to be helped. Not everyone wants to work with you and you might not want to work with everybody, you know, like.

At first you might just say any business is good business, but still picking and choosing is important and getting to the root of their want and need and getting into a house, getting out of a house and having the connections that I do have a lot of people in the commercial world that are experts. if you are doing someone that just wants the 30,000 for their

commercial building, that’s one thing, but someone that wants three million dollars wants an expert and in that sense I’m going to refer it out there and request that I’m kind of your shadow so I can get in the game and get some experience from my spear.

Michael Stansbury (04:51.896)
Yeah, not afraid to take that risk of, I don’t know a lot about this, but I can connect you with somebody that does, then put that as something that you learn by it. Megan, that’s a really good nugget for our audience. So Megan, so the other jobs that you talked about before, real estate, so you were a dental assistant and a flight attendant. Did you fly international, and maybe how did those two, when you worked in doing those two vocations, how did they teach you, or what did they teach you

Megan (04:57.425)
Absolutely.

Michael Stansbury (05:21.55)
that you’ve transferred into real estate and being a broker.

Megan (05:25.678)
Well, flying international entailed flying to Canada. So all sorts of Canada and in Canada they don’t have fair housing, you know, and one of the first leadership classes I went to was Chris Leder and he’s from Canada and he comes to the United States and he’s like, you are so lucky that there is fair housing here, that people can live where they want to live and

not be subject to this is where you have to live.

Michael Stansbury (05:57.081)
That’s interesting. don’t know how much I didn’t know that they didn’t. Obviously we take advantage of it or we take for granted. But what kind of what are they discriminating based on? is a typical Canadian problem with regard to fair housing? yeah, how would yeah, if you could describe that for me, how did he describe it as not fair?

Megan (06:03.082)
Riot.

Megan (06:19.897)
The fact that if you were Latino, you lived in this section, you know, they had highlighted areas that these are these group of houses that you can buy. So that really limits you into, you know, having the person that you might want to be your neighbor or, you know, like, I think this is the land of the free and that’s a huge reason why people want to live in the United States. So.

Michael Stansbury (06:30.115)
Wow.

Megan (06:47.359)
The connection in my other jobs have taught me, you know, sitting next to a dentist that expects perfection. Don’t we all expect perfection start to finish and when the going gets tough is when you bring out your turbo charge and you get going even better and stronger and you start thinking outside the box and we’re problem solvers so we don’t have to get hung up on problems. We solve them or help them.

Michael Stansbury (06:47.459)
Yeah.

Michael Stansbury (07:15.79)
Yeah, so tell me about kind of a deal, and it doesn’t have to be the most recent deal, but a creative deal where you help solve a problem for your client and maybe one of the most creative things that you’ve done or just a problem that maybe the client thought this is going to be really hard to solve, but you helped them through it.

Megan (07:35.059)
Yeah, one of my first deals was a million dollar deal. So it was a condo in the gallery in Edina. And so, you know, when you’re talking a hundred thousand or a million, people still care if there’s a scratch on the floor, you know? And if there’s nothing to complain about, there is still something that aesthetically or safety, like there is something that someone’s going to say, well,

Michael Stansbury (07:50.89)
They do.

Megan (08:01.298)
I paid $800 over list price, know, so that’s, I deserve that to get taken care of, so to speak. And yeah, I think there’s nothing too short, too much for what I can do. can help them help that scratch on the floor if I can’t. A good real estate agent has good vendors on their side, so they can call in someone that they know and like and trust. So you can.

Michael Stansbury (08:08.557)
Right.

Megan (08:30.322)
know a good lender, a good contractor, a good handyman, and that makes you a good real estate agent. know, like when you have a lot of tools in your toolkit, like you were saying, and just, it doesn’t just start, you know, all together, but it starts with you and you have to weed out the people that might want to work with you and you might not want to hire them either. And it’s not easy to work with homeowners and

how they have their hierarchy of expectations, but it’s a good challenge and it holds to a lifelong friendship that, you know, this is a good career to get you into knowing people that you would have never bumped into on the street or made an impact in your life. So I helped them and they helped me in this different way and the same results.

Michael Stansbury (09:23.566)
Yes ma’am. Well tell me about your, your, your market there as far as rents and, and housing and you know, what, what is the ratio for, um, like a three bedroom, bath, 1500 square foot house. What is the price for that in your market and in what are those rent for? Cause I’m curious in different markets, what those look like just, and again, you know, your market just throw speed at the wall. You don’t have to be too specific, but on an average.

Megan (09:49.097)
Right. Depends on some how a lot of properties are in distress so you don’t get top dollar for a three bedroom two bathroom but if it is good enough to move into one I’m working with right now is priced at a hundred and fifty thousand and real good like twenty three hundred square feet totally outdated. So say that you come in making it turnkey I think that property could hold above two forty.

245 ish and there’s a local business Legion is selling and started out at 170,000 and it’s down to 100,000 and that blows my mind that they’re gonna give you the liquor license and every kitchen accessory and you know people just I don’t think know enough that you don’t have to work this business to be the investor into it but you know

Michael Stansbury (10:28.022)
wow.

Megan (10:45.683)
What can you buy for $100,000 these days? Sometimes not even a Toyota 4Runner, some kind of big vehicle.

Michael Stansbury (10:47.47)
Exactly.

Right, they’re real expensive now. That’s right, everything’s, but that’s interesting. I assumed your market was similar and had prices like that, so I’m glad that you kind of verified that. So Megan, what’s it look like? What does real estate investing look like for you? Kind of what’s your vision for it? What are you doing now and what are you looking for in the future? Are you gonna be in your market investing mainly or, yeah, tell me what that looks like.

Megan (11:15.615)
think I’m in this market to have this as my stepping stone as the investor since you can’t hardly find a duplugs for $30,000, but you can here and you get it good enough that you can have it renter ready and that could be the start of my portfolio. I’m really targeting multifamily, two would be the least obviously, but four and eight.

And I have 21 lots for sale around Lake Geneva. And to get a builder to build on it, the seller would say, you could pay me after you sell the house even. People don’t want to build it. it’s like, I would love to take that and build like a tiny home community. You you’ve seen on like TikTok that you just…

Michael Stansbury (11:47.574)
Okay, cool. Yeah.

Michael Stansbury (11:56.58)
wow.

Michael Stansbury (12:03.212)
Right?

Megan (12:07.006)
start with a piece of land and you start with your vision and if you’re waiting for someone else to do the vision you want, it’s probably never going to happen.

Michael Stansbury (12:12.984)
Well yeah, let’s have fun with that. So what are the lots priced at over there?

Megan (12:18.461)
Uh, 24,900, so 25,000 for .4.

Michael Stansbury (12:23.512)
the lot and do they have utilities to them? Okay.

Megan (12:26.876)
Yeah, all utilities plugged in and it’s just ready to dig a hole for a basement or start a slab on grade house. know, aging communities, they’re always looking for one level living and that’s tough to find.

Michael Stansbury (12:41.806)
Yeah, okay, so but you mentioned tiny homes. Is it is there restrictions on that lake?

Megan (12:49.561)
No, actually this cellar, it’s his farmland. So it’s right within city limits, but the city doesn’t have any restrictions. They’re usually like, that’s his land. He gets to do what he wants and he just wants it sold. So he’s like, if you want to do something that just gets it sold, like who cares? Modular houses, like he’s not picky.

Michael Stansbury (13:03.202)
He just wants it. just…

Michael Stansbury (13:11.574)
Yeah, well, and tell me about the community there or the people there. And you said how many lots were there?

Megan (13:20.413)
I have 21, 20 of them are Lake View property and that one is Lakefront property that you can build a house and walk down to the lake.

Michael Stansbury (13:29.198)
Yeah, so if you just parked 20 tiny homes on this, and how big are the lots? 0.4? Okay, 0.4. Yeah, not bad. But what’s the demand like for that?

Megan (13:37.341)
0.4, almost a half an acre.

Megan (13:45.979)
Next to none, if someone’s going to buy it, they’re going to live in the house. And these people that I’ve gotten as leads, they say, well, it’s so close to the water. Are you going to have flooding? And, you know, they don’t want to do those extra 17 steps before they get the house. know, like a builder needs to take a chance on it to do something and they’re easily sold. The houses that are already built there.

Michael Stansbury (13:47.35)
Yeah. Right, yeah.

Michael Stansbury (14:12.866)
Right?

Megan (14:15.364)
And on those cell, eventually everything does.

Michael Stansbury (14:17.462)
Yeah, right. Everything does eventually. that’s interesting. Yeah, it’d just be interesting to, it’s always an interesting, you know, experiment. What would be, what is the average days on market? So I always like to this. So if you, if you bought the lot and you did some improvements about 10 K per lot and you’re at 35,000 and then you put a tiny home on there and the tiny home was, let’s say that you parked something there on a trailer.

like not necessarily a mobile home, but a really nice tiny home and it was 65 or 70,000. So you’re looking at maybe 105, but for a tiny home, would you be able to sell it on terms? So it’s super interesting. there, for 24 lots, there, and could you sell out in two years? So here’s my question.

Megan (15:11.675)
I think so.

Michael Stansbury (15:12.716)
Yeah, what’s the average day on market for $150,000 house that’s nice?

Megan (15:17.942)
Nice, so that goes quick. There was a 15 year old house and the person that was going to build on it then said, there’s that. And that was priced at 275. She was ready in the right spot in the right time. It got all settled. was signatures were written on the dotted line and seven days. So.

Michael Stansbury (15:20.045)
Yeah.

Megan (15:42.63)
We made an offer on day zero, it took seven days for them to do their open house and say, yep, you’re the person that was interested. We were probably the only people that were interested. Because off of that listing, the seller’s agent got another listing in that town and it has been sitting, it’s on a half an acre. It’s a decent property, but it was just kind of timing that I had a buyer to make that sell within seven days.

Michael Stansbury (16:09.006)
How about that,

Megan (16:10.012)
That’s almost 300,000 and so is this other house, you know? So if you’re saying 150 to 220, that would go like a hotcake.

Michael Stansbury (16:18.83)
Yeah, okay. Well, it’s interesting. The lots seem reasonable if they’re on a lake at $24,900. It’s just trying to thought experiment. So something to think about. Are there any kind of tiny home communities near where you’re at right now?

Megan (16:34.074)
I think the town of Wells, they are notorious for tiny houses. There’s someone putting on like a RV, kind of long tiny house. And I don’t know what the price is going to be for that. But if you could master these empty lots that are just waiting for, to make the city tax money, know? I mean, the city benefits by having an extra property in town and

brand new, there aren’t a lot of brand new properties if there are people living on themselves and that’s not helping the 4 million housing crisis shortage.

Michael Stansbury (17:09.294)
Right.

Michael Stansbury (17:14.2)
That’s right. And so in this part of Minnesota, what is the, so it’s south of Minneapolis, kind of north. Okay, so I’m trying to see where the area is. So what is the, so what’s it like in the wintertime? When does winter start? And you know, how do people manage the winter there? Is it pretty tough? What’s that look like for you?

Megan (17:37.876)
Yeah, I say we come from the land of ice and snow like the Vikings. So it could start in October and it could not stop until March. the fortunate ones get to have the snowbird life and they have a place down in Florida or Arizona. And for those people that I know, I’m like, why don’t you let me rent out your place like an Airbnb, you know, like.

Michael Stansbury (17:41.997)
Yeah.

Michael Stansbury (17:45.59)
Yeah.

Michael Stansbury (18:05.71)
Yeah.

Megan (18:06.435)
You could make money while you’re in Florida. So there’s so many angles and people just need that light bulb idea and to be able to trust you to run with it.

Michael Stansbury (18:08.866)
That’s true.

Michael Stansbury (18:16.066)
They do, yeah, and it doesn’t hurt to drop that on them as an option. Well, awesome, I always love thought experiments with that, Megan, that’s really cool. So where can people find out more about you and your information about real estate on all the social and the internet? Tell us about that.

Megan (18:38.519)
You can find me on Facebook, Instagram, Twitter, all the platforms. That’s meganthorne.relator. My website is www.meganshorne.relator.no.com. Must be the new age that my email address doesn’t have a dot com. It’s meganthorne.relator. people are like, where’s that dot com? No dot com.

Michael Stansbury (19:04.992)
Yeah, No dot com anymore. Yeah, that’s cool.

Megan (19:07.8)
Maybe that’s what makes me unique. So yeah, check it out and maybe we could work together or have some light bulb ideas together. It’s fun to collaborate and find new spheres.

Michael Stansbury (19:21.432)
Yes ma’am. Well, thank you Megan for being part of the Real Estate Pros podcast. Folks, you can find out more about Megan’s show notes are down below. Thank you for watching and remember, like and subscribe and we’ll see you next time.

Megan (19:33.219)
Perfect. Thanks, Michael. Bye-bye.

Michael Stansbury (19:34.691)
You’re welcome, see ya.