All Forum Posts by: Brady Winder

Hi All.

I just got a fourplex under contract in Puyallup and will be performing an inspection this week.  I was wondering if anyone had any recommendations for a good home inspector. 

Thanks in advance!

Brady

Goodvalley,

I sympathise with your situation. I currently live in Texas, but I am originally from the Seattle/Tacoma area. I became interested in real estate investing about a year ago and have read book after book since then. I also love reading the forums on this site.

I have been monitoring the market in Southeast Texas, and it is not all that difficult to find deals that cash flow. We have rental rates comparable to the Tacoma area, but home prices are ~ 1/3 relative to Tacoma. It is not uncommon to find homes in my area for less than $40K, but it is impossible to find homes in the Seattle/Tacoma area that cash flow. Landlords in the Puget Sound must have either purchased thier properties a long time ago when RE was less expensive, or they ignore the traditional guidelines for REI. I have a feeling that most investors in the Puget Sound are more optimistic about appreciation than those in the midwest and the south.

I would love to hear from experienced investors in the Puget Sound area on the cash flow debate. Maybe four-plexes are the way to go?

I'm afraid that when I move back to the Puget Sound my money will go into the stock market or I will have to become a long-distance landlord.

I agree. I would feel much better about going into a house with a + cash flow than bank on appreciation. If I could predict the future I would invest more heavily in the stock market. Hopefully, for my sake, the real estate market will continue its downward spiral, so this time next year there may be some real deals that actually cash flow with a reasonable down payment.

How are historical appreciation rates for a given area tracked, and where can that information be found?

Brady

I'm not saying that is my strategy, but I bet the ROI for a property in WA purchased 10 years ago would be much better than that of a property in OH.

I think winners (properties that cash flow) are a lot easier to find in Ohio than in Western Washington. I am guessing the upside to Western Washington is that appreciation rates are historically better than those in OH?

kpm.austin,
I like your idea about cash flowing properties in Texas to help offset losses in Washington. I am going to have to think more seriously about keeping the Texas house.

Thanks John. I think I understand the strategy, but I am not sure I completely understand the second paragraph of your response. Are you saying that in a high priced market you can flip some homes to generate enough capital to put down a large enough down payment so that properties you want to hold will cash flow?

I am almost tempted to keep my current home in Texas as a rental when I move to Washington, because I know it will cash flow. On the other hand it would be nice to pull the equity out so I have a healthy down payment when returning to WA. I'm not too thrilled about managing the property remotely either.

I guess there is significant upside potential if the market continues to appreciate in Tacoma, but I know you cannot count on that. Funny what you say about Tacoma. I remember growing up nearby, and nobody wanted to live there. Now the downtown area is beautiful and every home has doubled in value. Thanks for your insight!

I am a new investor interested in buying and holding single family homes. I currently live in Southeast Texas, but I anticipate moving to Tacoma, Washington within a year. All of the real estate investing books I have read emphasize the importance of generating a positive cash flow. This seems relatively easy in Southeast Texas, but very difficult in Washington where you would pay almost double for the same home. The rent in Washington is not that much higher than in Texas.

By purchasing a property well below market value you can make money, but you still may not be able to generate a positive cash flow. Do investors in these higher priced areas just live with negative cash flows?

Is there anybody from Western Washington that thinks I am way off base?

Thanks for your help!