All Forum Posts by: Michele Fischer

Wesley, I took a quick peek at your numbers. I don't proceed if my prelim numbers can't get to 10% CAP, FYI. I only use 5% vacancy, our places are rarely vacant for more than a few days in our market. The insurance looks high to me, might be your market. Are you sure you can get that mortgage rate for a non-primary residence? We learned the hard way that we can't. Cash flow looks good to me. Rent to investment ratio is a little high but within my range. Doesn't look overly compelling or discouraging. Location seems good, except is it a busy street?... Does it have rent-able features, or same as market? You've been inside and the floor plan makes sense? You could make a low ball offer, maybe include all the things you'd need to do to it, and realizing you may offend them, which is OK unless you really really want it.

If you raise rent one unit at a time, the first tenant to have it raised could have a great discrimination claim against you. If the units are comparable and in similar shape, it is hard to justify not raising them all the same at the same time. I'd probably step shift the rent increase over several months and hope they hit their move out threshold at different times. It sounds like the work that needs to be done is not extensive, though. We've had multiple vacancies at the same time, doing the work ourselves after full time jobs. Not fun, but great incentive to work smart, keep the to do list pared down, and work extra quick; it's not the end of the world.

Most of our units are pet friendly, they only aren't when the duplex doors are close together or the units are on top of each other. I have to personally meet the pet during the application process, and we photograph the approved pets. We have a refundable pet deposit, and charge $25/month more in rent per pet. Most are fine with that, the others keep looking. The pets always trash the yard. When we catch unauthorized pets, which I often do by driving by, we are really stern with them (comply or quit) and they lose a lot of credibility with me.

The more appliances included, the more that can break. We include stove and fridge, and when they break down, we buy used from a local used appliance store right away. I would encourage garden areas, it can raise values and increase rentability, we often install raised beds in our yards and annually provide flowers to the tenants who like to garden. I've been asked about a fire pit and I always say no, blaming insurance. What is reasonable use to us may not be to our tenants, I don't want to go there.

Michael, this deal sounds similar to my market and would be one I'd consider. Have you been inside to see the floor plan and condition? Is the rent at market? Stable tenant is great, just realize that future tenants may be more problematic in a "not great" neighborhood; it could be more of a roller coaster ride than a higher rent property, especially if you manage yourself, as we do.

I'm similar to Stan. Our clause reads:

The tenant is hearby advised and understands that the property of the Tenant is not insured by the landlord for damage or loss of any kind (action of third party, fire, water, theft, etc.), and the Landlord assumes no liability for such loss. The Tenant is advised that, if insurance coverage is desired, the Tenant should purchase a renters’ policy of insurance.

Since we are in the low income market, we do not assume or check that they follow through.

Hola, Ryan, wekcome to the group!

I lived in Federal Way for a bit (first house, in fact), near Tacoma.

I have no idea how to rate myself on the knowledge scale, but getting more than enough experience with 8 low income tenants. I discovered bigger pockets after purchasing our portfolio, darn it.

Take care!

I'm guessing you are going to end up closer to the $300/month than $700/month cash flow, but my eyes could be very jaded by my low income focus. For example, I can't imagine paying that much for a duplex, and 2.5 bath seems palatial! Do you know what kind of neighborhoods they are in? Shelton is rural and off the beaten path, which could be good or bad. Where's the property management fee? WSG and electricity looks low to me, but maybe if they are shared lines. Ah, I'm jealous, love the excitement of chasing new deals... trip up may be worthwhile if there are three in consideration.

Hi Erica!

Agree that this cash flow seems too high. Markets are different, but I'd expect about $4000 per year earnings on a triplex in my market. The college crowd is a unique market.

I had the opportunity to buy a large four bedroom for $40k and walked away due to the old wiring. That is a big undertaking.

Is college your only tenant option? Can you offer month to month to bridge your vacancy timeframe? Or ask for delayed closing date.

Sounds risky to me as an early deal.

Emerging market of Longview TX... darn, wish that read Longview WA!

Welome to Bigger Pockets and congrats on appreciation.