All Forum Posts by: Alex Chin

Hello @John Cohen, and welcome the south Puget Sound real estate investment community!

You've already discovered the podcasts, I recommend downloading a couple and listening to them in your car as you go about your day, being an agent, I'm sure you spend a lot of your time on the road, may as well get some serious use outta that right?

As for other ways you can continue to build your education while working a full-time job, I would first look to start narrowing down both the investment path and geographic area you plan on focusing on. Broadly speaking, most REI will fall under one of the following: Wholesaling, Flipping, Buy-Hold, Notes. I recommend deciding which will best suit your life-work balance and diving into an education there.

There is also an informal Meet-Up on Monday in Lakewood, great way for you to get out and start building a network of local investors. @Kevin C., @Troy Fisher, and @Tiffany Plovie run the local meets, hope to see you there!

@Grace Wang - I don't know off the top of my head how much carpet/paint will cost, but the number of $20K just feels a bit too high. Quick search of Home Depot shows carpet should be under $0.90/sqft., installation shouldn't add that much to it, I would expect to be able to carpet the entire building for under $4k, I don't believe that painting it would then cost you $15k+. Don't have hard experience on this one backing me up, it's just that intuitively, that number feels too high unless the property is high-end, or each unit is 1,100+ sqft. or something like that.

Most investors that I know don't really pay any attention to Zillow estimates. Take a look at the last 12 months of sales of small multifamily units in the area and build your own comps. Or, if you have a real estate agent friend, buy them lunch and ask them to build a comp for you.

With the loan, what I did was call about a dozen banks, both small local ones and the big players like BoA, Key, Wells Fargo and just compared rates for NOO (non-owner-occupied) loans. If rates have shifted and that's the best you can expect currently, then what is reasonable will be defined by your expectations of return and cash flow numbers.

@Grace Wang - I would echo @Greg Cooksey, where is the property located? That, and the unit specifications (sqft., bd/ba., amenities) is going to play a HUGE role in determining how much rent you can expect per month. I.e., if...say, all four were 1bd./1ba. with 600sqft. in Hilltop, you cannot consistently expect $750/unit/month at this time. Maybe 5 years down the road.

I also would NOT trust what the current owner says rents, vacancy, and utilities are. I would make it a point to put in research as to exactly what I could expect in rents for that size unit, and get more conservative with my expense estimates: 8% vacancy rate, 10% property management fee, 10% maintenance costs initially, $75/month/unit insurance. If the numbers still meet your investing criteria at that point, you may just have a deal!

I don't really like the 30% down, you should easily be able to find a lender that will do 25%. Contradicting myself a bit though, you can also just write off the difference if you expect to put in significant improvements and then re-finance. New paint and carpet will not typically constitute significant improvements (I am also a little surprised at the cost hitting $20k for paint/carpet), but if you believe the property is worth in the range of $320k or so, then a 75% LTV refi will put you in a position to recoup your rehab money. Make sure there are no early payment penalties in your loan if this is your plan.

Yeah, long story short: location location location is still king; this feels like it could be a good investment, but it's better to be conservative and have a pleasant surprise than live on the edge.

@Dan Krupa - I have only ever looked at deals in the Puget Sound region, so I can't really make any sort of comparison to how easy it is via-a-vis other metropolitan areas around the country.

Keep in mind that I come at this from a cash-flow, long-term perspective.

Deals in Tacoma are several orders of magnitude easier to find than in Seattle where I live. I can pull up the MLS or even one of the aggregator sites like Redfin/Zillow/Trulia and find something that I would be willing to make an offer on (with appropriate inspection, financing, and disclosure contingencies). Will this deal fit what you are looking for? I don't know your metrics, so I can't say for sure, but I'm typically hunting a multi-unit property that will generate a minimum of $100/unit/month in cash-flow after accounting for expenses and PITI, and has solid appreciation potential. For me, that can mean multiple distinct units like my duplex, or if it is within walking/biking distance of TCC or UW:Tacoma, at least 3 bedrooms or potential to have 3Bds.

I am not interested in SFRs at all unless the meet the aforementioned criteria, so I can't really comment on inventory status. It has been getting thinner as the Puget Sound heats up thanks to Seattle, I know that much.

@Dan Krupa - Yep. I have a single duplex, soon to be a 4-plex (long story short, bought half of a 4-plex, purchasing the other half later this year) in the Hilltop neighborhood of Tacoma.

I intend to significantly expand my portfolio in that area over the next few years.

@Troy Fisher is a highly active member of BP, also runs (with his partners in crime) the local Meet-Ups in Tac.-Sea.-Bellev. He is also a home inspector and real estate investor himself.

I would also recommend Timothy Pierick. Charges $350 flat for a house, $450 for a duplex. call him at 253 2610129

Good luck, cheers!

I am not a big fan of buying in a rising market because then you're either trying to flip as rapidly as possible in order to minimize the chance of missing the top of the market, or you're holding for a moderate period of time and trying to time things. Either way, you will be forced to make a heavy investment in the form of your own time.

If REI is your full-time profession, then that's a bit of a different matter.

@Troy Fisher - the only other way I could maybe see making a large purchase like that work is for tax purposes. Getting to write down $140k/year of depreciation might make a difference for a very wealthy investor? Either that, or if you're a buyer for a major REIT like Essex or Equity, you get to look at things based on a 20-yr timeline and having the resources to buy sufficient market share to start defining the high-end rental market.

I'm really just stream-of-consciousing right now, I'm in agreement that there isn't much on the market that is a worthwhile investment in the Seattle/Bellevue.

Looking forward to the meet up tomorrow! @David Kirtman, you should know that Troy is hosting an informal BP Meet-Up tomorrow at 7pm at the Wilde Rover in Kirkland. Should come out, have drink, and start connecting with local investors.

@Holly Jackson "Is there anything that would sway the "no pet" people to consider a truly lovely dog in their rental? If so, what would it take?"

First off, remember the Bigger Pockets is a landlord-oriented website. Most member will offer advice and opinions from that perspective.

Generally speaking, landlording is all about risk management. Admission of a large pet such as a dog or a cat, regardless of the temperament and training, is an additional risk. Smart landlords will understand this and permit pets with addition of a calculated pet deposit and monthly premium on rent that will, over the long-run, recoup damages and generate extra income. However, this is not an easy process and may not cover the true worst case scenarios (off the top of my head: dog decides to maul a passerby on the property and lawsuit loveliness ensues, cat works their claws into a water line and hey-presto! flooding!). Thus the situation you find yourself in: most landlords, in order to minimize their risk and level of effort put into their business, simply choose the path of least resistance and deny pet owners.

I'd say that your only shot might be to proactively make your willingness to pay a pet deposit and additional "pet rent" known to a landlord BEFORE that subject comes up for discussion when looking at the property. Understand though, that this is a bit of a long-shot and you have to mentally prepare yourself for, as mentioned, a landlord taking the path of least resistance.

I suggest researching pet deposits and pet rental premiums for the type of house you are looking to rent beforehand so that you have an idea of what the going rate will be.

Cheers, and good luck!

If was me, if the tenant is becoming belligerent, my first step would be to retain a lawyer and inform her/him of the whole situation. Probable second steps would be issue a formal 30-day notice to vacate and notice that you will not permit a second tenant, they have guest visitation rights but under no circumstances are they permitted to move in.

Unfortunately, without a written lease of some kind, this situation has a lot of potential to get really ugly, really fast and your friend should strap in and mentally prepare herself for the worst, this is why renting to tenants without screening or a lease is so dangerous.

By the way, I would go to a lawyer like, NOW.

Two groups I know, Tran Law Group and Spectra Law, do not specialize in evictions, but should be able to refer your friend.