All Forum Posts by: David Sweeney

Taylor, can you add me to your list? Thanks. I'm ready to make some purchases.

I'm primarily looking for multi-family properties outside the City of Seattle, but I must say that your description of the house above sounds interesting. I am interested primarily in buy and hold, but that sounds like a great flip opportunity.

You can find the things you require in a home in the greater Seattle area. I like the communities you mentioned. As others have said, the actual city of Seattle is pro-tenant, anti-landlord. It is expensive too, so look elsewhere. As an investor, start looking to the North of Seattle and you'll find lower prices (Lynnwood, Shoreline, Edmonds/Woodway, Mountlake Terrace, Brier, Everett). East of Seattle prices can be the same as Seattle or higher, depending on neighborhood (Woodinville, Kirkland, Redmond, Bellevue, etc.).

Here's an excellent article on the best schools in Washington State. Here's an article about the best school districts.

As for your last requirements, According to Zillow, the average price of a home in King County is $540,000. The average price of a home in Snohomish County is $394,000. Let's work with a nice round number of $500,000. If you put 25% down ($125,000) this leaves you with a 30-year mortgage payment of $1790 @ 4%. However, you need to add in taxes, insurance, and pay maintenance on your property. You also have to factor in water/sewer/garbage unless you have a situation where the tenant pays all utilities. Finally, you should have cash reserves for capital expenditures (CAPEX). So, you have to factor in all your costs and compare against the potential rental income (and don't forget about the vacancy rate!)

Are there houses out there that can still earn you $200+ per month? Yes, but it can take searching to find them. My last two strategies are to remember that you make your money when you buy the property, so make sure you are getting a good deal. Lastly, in order to verify the deal, I highly recommend the Bigger Pockets Rental Calculator. It is a great tool to use.

Let me know if I can be of any further help.

Hey guys. Just getting started in RE investing. I'm also getting my RE license. As a police officer for 30 years in Seattle I've seen it all. The dead body stories I could tell you! The smells, the stabbings, the hoarders, the drug dealers, the animal violations, poop, pee and garbage, shootings, hazmat scenes, etc. I could go on and on. In fact, bad tenants are probably my greatest fear after dealing with them for a large portion of my career. I'm always amazed some people can live in these types of conditions. I think the hoarders are among the strangest of afflictions - floor to ceiling junk, with tiny pathways/ trails to come and go. It is never fun when the piles collapse on the people. That being said, I'm sure Seattle is like other real estate markets. There are good neighborhoods and bad neighborhoods. If you invest in war zones, that is the type of tenant you will attract. Likewise, buying properties in nice neighborhoods is going to attract a nicer quality tenant who is looking for a nice place to live in a great community. The problem is, these neighborhoods are usually the most expensive as well. May we all attract the best tenants!

Thanks David!

OK everyone, here's the update. Thanks for the advice. Do I still have a good deal?

PURCHASE PRICE: $127,500

MONTHLY INCOME: $1350 ($400, $550 and $400. These seem low to me. Anyone agree or disagree?)

MONTHLY EXPENSES: $1259

MONTHLY CASHFLOW: $91 (Much less than before due to decreased rent and $266/mo. for expenses).

CASH ON CASH: 3.91%

CAP RATE: 5.72%

Personally, I don't like the deal nearly as well for $91 bucks a month. But what if I could acquire the property for less, and increase the rents? I guess there are no guarantees in life.

Great points Kristin Whitaker. 

• I'm going to run a property analysis again (Now that I'm PRO, I can do that!) I'll put in some new rental numbers. Nicole Page from The Spokane Home Guy Group tells me the rents are $400, $550 and $400. MLS shows utilities at $3192. Cap rate of 9.14%.
• Zillow and MLS both show baseboard heat. But I'll definitely remember that point about heat and Spokane winters. Brrrr!

Update to come...

Thanks Bryan Lynch. Excellent advice! I'm currently seeking a Spokane MLS broker to work with so I can do that important research.

I like that strategy. Now I'm even more curious. Thanks again!

Thanks for the insight Andrew Johnson. 

• T12 is great advice. I'll do that.
• I totally estimated the rents by averaging twenty 2 bed/1 bath and twenty 1 bed/1 bath in Spokane and used those numbers ($840, $672 & $672).
• I see what you mean about the rent rates in Zillow. I'll verify first.
• Great advice about the contractor.

I can use the information I get in order to negotiate, especially if rents are too low. Thanks so much!

Hey everyone, just upgraded to PRO today!! Can someone give me a quick eyeball test on this?

Last month, I found a 5-unit, but everyone talked me out of going commercial on my first deal. So, I found this triplex on Craigslist: 1007 N. Cannon St. Spokane, WA 99201.  According to Zillow, the owner listed it twice last year, pulled it off MLS and now appears to be selling it on Craigslist. Here's the particulars. I don't have a lot of experience analyzing costs, so if anyone has any suggestions I'd sure appreciate it.

PRICE:  $127,500

RENTAL UNITS:

• 2 bedroom/1 bath on main floor. (I estimate $840/mo.)
• 1 bedroom/1 bath upper floor. (I estimate $672/mo.)
• 1 bedroom/1 bath basement. (I estimate $672/mo.)

DOWN PAYMENT: $25,500

LOAN AMOUNT: $102,000

MONTHLY P&I: $516

VACANCY 5%: $109

CAPEX 10%: $218 (Is this somewhat accurate?)

WATER/SEWER: $50

INSURANCE: $100

PROPERTY TAXES: $53/MO.

REPAIRS 5%: $109 (Not sure about this number either. I'm probably low, right?)

ELECTRICITY: $25 (All units are separately metered. Does this just mean electricity? Or do they pay their own water/sewer too?)

GARBAGE: $50 (I have to pay this, right?)

MONTHLY INCOME: $2184 - MONTHLY EXPENSES: $1,231 = MONTHLY CASH FLOW: $952

What do you think experienced investors? Should I get the exact rent roll and utility bills? Is my repairs estimate too low? Anything else I'm missing? Thanks so much!