All Forum Posts by: Brandon Vukelich

So many factors to properly answer your question.  Lender will want typically see your down payment as "seasoned" and borrowed last minute.  They won't loan you 75% if you have a private loan for 25%.  You can typically re-fi after 6 months but you will have to show significant appreciation in value in order to cash out your investor, assuming you borrow the full down payment for purchasing.  You may want to consider finding an investor to be your partner vs loaning you the funds.  But I highly recommend you search BP for commercial lenders or reach out to one in your area and have an in-depth conversation to help you "get your ducks in a row."  Best wishes on your investment goals!

Ditto to Guifre above. You'll need 25% or more down plus 3, 6 or more months of reserves. Commercial lenders also focus on DSCR (debt service coverage ratio), most want to see a min of 1.25 and only lend up to 75% LTV, some cases 80%. Other than the typical requirements, they probably will require an Environmental report Phase 1 or 2 and/or surveys. Both can be expensive. They will factor in 5% vacancy, even if fully leased up. They also prefer to see "management or landlord" experience, indicating you'll know how to manage a commercial property. Best wishes on your investment goals!

All very good notes already provided. My additional 2 cents. You're probably aware of the new NWMLS F22FM or CBA's FMA Force Majeure Addendum to address timeline delays based on the stay at home order. These are helpful. Be sure to ask for trailing 12 months of actual income. This helps verify actual collected income vs what SHOULD be collected on the rent roll. Cross check rent roll with leases. Also, some landlords like to cut back on expenses months prior to listing to help beef up the P&L, CAP rate, etc. I've read a good rule of thumb is to question any expenses that reflect a change of 5% or more from the prior year. Suppression of expenses could mean more deferred maintenance. Lastly, target closing between the 5th-10th of the month, so you are prorated more rents at closing (helps reduce cash needed to close). Best wishes on your deal!

Due to so many cancellations, we are renting our Airbnb to traveling nurses on a 3-month lease.  They pay a premium over typical, local 12-month tenants but not as much as if operating full Airbnb reservations.  From my limited experience, they expect fully furnished rentals as well.  Google or use the site @Bjorn Ahlblad mentioned.  Ours is located near hospitals so there is usually decent demand for temp nurse housing.  If you have hospitals and medical facilities nearby, you should expect similar demand.  Also, we just use a standard lease that we would if renting to a 12-month tenant.  Best wishes on your investment plans!

As noted above, if you plan to invest in Seattle, you will need to put A LOT down to make the property cash flow and cash on cash returns are lower. But very strong appreciation, jobs, rental demand, etc. I strongly encourage people to consider outside the city limits. The city council has a strong socialist mentality and is extremely anti-landlord. About an hour south is Tacoma, which is also one of the hottest markets in the country. Prices are about half and laws are not quite as crazy as Seattle. We have a saying around here, "Don't Seattle my Tacoma." The Puget Sound area has been very solid for years and there is no signs of slowing. The virus is bound to change things but properties are still moving very quickly, over asking. You should also consider areas like Bremerton, Lakewood, Puyallup, Everett, Kent and other outlining areas or go far east to Spokane. It really depends on the type of investment you are looking to acquire. Best wishes on your investment goals!

Listen to the Apartment Building Investing podcast with @michaelblank and episode 192 with @sterlingwhite. He talks about coming from nothing but eventually offering value to investors to help manage & maintain properties in exchange for sweat equity.  Also, as many others have mentioned, be a deal finder for investors.  Maybe your finder fee could be 5% or more equity to help get you started while you also help manage or maintain the property. Best wishes on your goals!

A lot of good advice, options offered here already. @Ivan Sarabia it would greatly depend on your short or long term goals, do you prefer to self-manage, play for appreciation or cash flow, etc.  So many options.  Yes, midwest is better for stability on prices, higher CAPs, lower appreciation.  In my area, the PNW, our returns are lower but strong appreciation.  I own property locally (Seattle-Tacoma) and out of state, in Idaho.  Personally, not a huge fan of owning more than an hour or so flight away.  But thankfully we all don't want the same thing. :)  You may want to leverage your local experience, knowledge and resources.  I'm guessing $100k won't go too far in SoCal. May be good idea to consider partners and scaling up.  But again, really depends on your goals. Best wishes on your investment journey!

Congrats, sounds like a great first step!  Tacoma has been super hot and isn't showing signs of cooling anytime soon.  Ditto to what Brian said above regarding RHA.  Best resource for WA landlords, worth every penny.  If you ever need a prop management referral, I have a friend that owns a company in Tacoma.  If you're going to self-manage (speaking from experience), be sure you are VERY familiar with all of the state and local docs needed and timelines when managing a rental. Best wishes!

Welcome!  Yes, as Michael mentioned, best to meet one on one with experienced investors.  A great place to start is the Rental Housing Association. A lot of excellent resources and experienced landlords as members.  If you're thinking about actually owning in Seattle (city limits) you better start learning about their Just Cause Ordinance and other crazy laws they're working on passing. Best way to learn about the market is to partner with an agent that watches the market daily and can give you expectations on prices, inventory, rents, etc. The market is crazy competitive.  If you're serious, make sure you have everything lined up to make a purchase when the right opportunity presents itself to you. Best wishes in your journey!

@justin frank - I can relate...panicked and sold a 6-unit apt in West Seattle for $500k that is easily worth over $1.8mil now. Lesson learned.