Criteria around Grays Harbor Co, Washington

[David Stone]

Hey, I have been getting a ton of calls from my yellow letter campaign with owners who need to sell their homes. I have been focusing primarily on absentee owners.

Investors in Aberdeen, Montesano, Elma, or McCleary... What is your criteria when accepting a deal from a wholesaler. (Location, cap rate, equity %, minimum cashflow... are you open to lease option or subject-to or only cash offer??)

I am hoping to gather a solid set of numbers/criteria to help me structure the best deals for those looking to pick up some cash flow properties out here in Grays Harbor specifically (for now). 

Thanks!

[Brandon Turner]

Hey @David Stone- good question. So, it's hard to say exact, buy here's a few things I look for: 

- For a potential rental property, I want to see at least 12% ROI and $100 per month/per unit after all expenses, including at least $150 set aside for repairs/capex, 5% for vacancy, and 10% for management.

- For a potential flip, I want the 70% rule to make sense. In other words, take the After Repair Value (conservatively), multiply it times 70%, and then subtract out the rehab costs (and those are ALWAYS way higher than you'd think.)  That's the price range I'm looking in. For example, if a deal could sell for between $120,000 and $130,000 in Montesano - I'm going to shoot for the $120,000 mark x .7 = $84,000. Then subtracting out repairs, let's say $35,000, I'll end up wanting to pay around $49,000. Then you'd have to work in your wholesale fee as well. 

Furthermore, I'd want to see details that these numbers make sense on paper - preferably through the BP calculators (You'd likely use the Wholesaling Calculator and send over a PDF report of either the flip or rental version.) Though a good spreadsheet could work also. 

As for location - anything from B street to F street is rough and I likely won't pursue unless it's a killer deal on a multifamily. I love Southside Aberdeen for rentals, because no flood insurance is required. Montesano is, hands-down, my favorite location for flips or rentals, and Elma/Central Park/McCleary/Cosmopolis are also great for either.  Aberdeen and Hoquiam, especially the cheap crappy houses, really depend on the individual street it's on and what the houses around it are. Flood insurance is the silent killer of cash flow in Grays Harbor - so be sure to look out for that. 

Hope that gives you a little bit of insight into what I look for in a property in Grays Harbor! 

cc: @Kyle R. Turner