Everett Duplex - Feedback Needed

7 Replies

Hello!

My goal is to build a real estate portfolio. My first goal is to purchase an owner-occupied duplex/tri/quad. I am having difficulty locating properties that pass the 50% rule. Honestly I feel a little jealous when I see different areas with much lower prices!

I have a few months to continue looking, however I this is my possible scenario: There are few options which I lose ~$100 per month per the 50% rule. Since this would be owner occupied, is this still acceptable? I would manage my own property etc.

I will be working in Mukilteo and wife will be at University of Washinton and we are looking at any place that is <40 minute travel time during rush hour.

Am I going about this the right way? A duplex makes a lot of sense to me, but the Puget Sound market sees quite high.

Its harder to meet the typical "rules" here or the west coast for that matter. Home prices are just too high in proportion to the rents. Although its not prudent investing on the west coast does offer more upside in appreciation, but that gambling.

Medium  logo zoom inLane Kawaoka, Simple Passive Cashflow | [email protected] | http://simplepassivecashflow.com/tag/podcast/

@Chris Cantrell you would have to post the actual number before we could give you any real feedback on whether or a deal is a good one or bad one. Prices and return rates do vary a lot by location. Feel free to look some up you are interested in and run the numbers by us. Good luck

@Chris Cantrell

I invest in Everett, WA, right around the corner from Mukilteo. I own a pair of duplexes and a fourplex. You will be hardpressed to find 2-4plexes on the MLS that meet the 1% rule, let alone the 2% rule. However, this is much better than Seattle where properties hemorrhage money according to the 50% rule.

I would say that paying $100/mo mortgage sounds like a decent deal.

@Grant Fosheim

Thanks Grant, that is really useful information for me. Can you help me understand how paying $100/month is a good deal?

Consider this example duplex: $1200 mortgage, each room rents for $1000, and 50% rule estimates upkeep costs at $900 a month. This is a made-up property because I don't have the numbers with me.

Income: $2000

Expenses: 1200 + 900 = $2100

Loss: -$100

If this is seen as a good deal to you, what makes it that way?

Thank you in advance.

Are you including the management fee in that $900? I realize that you are self-managing, but if you are using the 50% rule, you should account for that out of the right 50%.

Originally posted by @Richard C. :
Are you including the management fee in that $900? I realize that you are self-managing, but if you are using the 50% rule, you should account for that out of the right 50%.

I think I understand you. I am including the management fee in the 900. Does this make sense?

@Chris Cantrell

My apologizes, I misunderstood you initial post. Your example below is not a good deal:

$1200 mortgage, each room rents for $1000, and 50% rule estimates upkeep costs at $900 a month.

Income: $2000

Expenses: 1200 + 900 = $2100

Loss: -$100

I thought you were indicating that your income - expenses would equal -100 and leave you with a unit to live in, essentially resulting in you paying 100/mo for your rent.

Sorry for the confusion.

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