All Forum Posts by: James Lusk

I have been investing in the greater Seattle area for the last 3 years with my wife and have accumulated 29 doors across 3 properties (and sold another 6 doors). We are now looking to invest in the Cleveland market and are underwriting 10+ unit multifamily for BRRRR. We are just diving into learning the market and the little nuances like point of sale inspections and snow. (I hear it’s white and fluffy and you shovel it?) One thing I have found is that 10+ unit apartments appear to be a rare breed. I would love to hear from other investors in the are who currently own 10+ unit multis in the greater Cleveland area as to what your experience has been with operating in Cleveland and anything in particular to look out for. We are looking into Garfield Heights, Lakewood, Brook Park, Brooklyn Heights. We will be flying into Cleveland the morning of Friday 8/10 and staying until mid day 8/12. If any multifamily investors in the area would be willing to meet up and chat, we would love to share our experiences and pick your brain over a beer or coffee. Thanks in advance!

oh man! Wish I could make this one. Love Kathy Fetke! Unfortunately we are out of the country. I’m sure this will be great.

Hi Sisee! I use NRB Property Management for our Lakewood and Tacoma properties. We have had them in place for about 7 months now and they have been great. PM me for contact info.

Hey Pete. I would be glad to share. PM me and I will send it over!

For an example, we purchased our 12 plex for $500k. This seems cheap, but based on the income at the time of of purchase, this was about a 4.5 cap. Nothing to brag about. We put 240k into a rehab, and raised rents from 375-450 up to 750-800 a unit. We also bill $50 per unit for utilities which the previous owners did not do. Now, we gross right around 10k and at a 7 cap (which is conservative) it is valued at over $1M. If we looked at  it at the beginning strictly from a cap rate perspective, we most likely would have been stuck in a stalemate with the seller and missed out on an great opportunity.

We had it calculated with a positive cash flow from the get go. Not great but still positive. Most the leases were month to month so we would be looking to increase rents right away. Month to month leases are good. They give you as the landlord, a lot of flexibility in terms of increasing rents or eliminating problem tenants. Then, we lock in year long leases.

I believe that people get too caught up on what the cap rate is, and you should only pay what the going rate is. Well, if someone else will pay more than that, then I guess that means that cap rate isn’t very accurate, right?! If you can find off market deals, you will have more control in the negotiations. Like I said before, I go for the lowest price I can, but know what my top end is to still hit my desired returns and don’t go above that.

Hopefully that all makes sense.

Hi Pete.  I’m with @Curtis Bidwell. My wife and I actually put an offer in on this yesterday and just got word they went with another offer. Our offer was actually above asking. We have done a couple properties with this model and in each scenario, the purchase cap rate was not stellar, but you have to look at how much money will it take to get the property operating at peak performance. If you are able to raise rents with little rehab, and reduce costs without much money invested, you may think about being a little more competitive with your offer. We just look at what our all in will be, and if that will produce the returns we are looking for.

As for the Lakewood market, we have a 12 plex in the other side of I5 in Tillicum. This is definitely not the best area but we really like the way things are trending. We have many military tenants who are great. Since we went through our renovation, we have had great demand for our units from really solid tenants. We do get a lot of applications from less than favorable tenants, but we just hold out until we get the solid ones. So far, things are going great.

Best of luck!

I’m assuming that Peter was maybe referring to Greenwood as you get closer to highway 99. Greenwood as you move further west is great (as I’m sure you know living down there).

MLT is a nice area to get a home for a bit cheaper but have great access to 5 and 405. They have a great area around the new Diamond Knot Brewery with a dog park nearby, and an indoor public pool with racquetball courts and kids activities. Lots of little block homes around 1100-1400sf in the 400-475k range.

Welcome Gabe! The BP site is an incredible resource from the forums to the blogs and podcasts. If you are logged in on the BP homepage, there is a section on the right hand side of the page titled “local events”. You can find meetups there. Also, you can find meetups on meetup.com. 

I would recommend that you set up keyword alerts for the cities you are interested in. You will get notified whenever those cities show up in the forums. This will let you see who is actively investing or working those areas. Just reach out to those folks and BOOM

For Everett, you may talk to @Account Closed. He is very knowledgeable and helpful.  

Best of luck!