All Forum Posts by: Jack B.

I ask because I'm looking at commercial investing next to shelter capital from the eventual real estate crash, but am also having a hard time with the commercial sector vs the ease of assessing single family homes as investments, managing, etc. 

I've considered cashing out equity and going to a cash flow market for a while, but of course, if the houses there also go down in value....

In my personal opinion, if you don't have 20% to put down and reserves, you are not ready to buy. Statistically, that's why you pay PMI/MIP when you put less than 20% down; you're more likely to default due to poor finances. Sounds like you need to grow your career a bit more before investing. I'd rather buy a four plex and live in one unit than buy a house and rent out rooms. Same noise issues, but much more privacy. And usually people who rent rooms from people are the most low income, uneducated people out there. A friend of mine rented rooms in his house ONCE. ONCE! My gf's sister is a middle aged loser and rents rooms out of peoples houses because she makes such low wages she cannot have a car or an apartment, or even a cell phone...There are exceptions to every rule, but I wouldn't want to have to live with boarders unless I had to.

 Yeah, tell me about it. I avoid buying there and in other anti business/landlord regulation areas. Are you still doing the condo thing? Do you own any condos in the Seattle city limits? Any plans to do anything with your condos? 

 Yes, that's true, that's why I intend to use the money as a 25% DP on two houses slightly more expensive.

 Finding another two houses to replace this one with (huge profit, 2.5 year holding period) in this market will be tough. I always buy for cash flow and in this area that is next to impossible right now or the margins are very small. I'd like to invest in Nevada and Florida, recently took a trip to Las Vegas, but didn't stay long enough to get a good enough tour of the area. Went to Florida long ago but time to go back and do some recon. I like the fact that I can buy a nice paid off house with the profits from one of these sales here. Heck, a few years ago that was when I was going to pull the plug. Appreciation has been so good that I can now sell them all and buy several paid off houses in Nevada or Florida and have 4 times my living expenses coming in every month while I live in a paid off house down there...But I'm still in the grind. Five more years, another mil.

I buy prehab houses and do minor repairs to them while living in them, renting them out then selling them a few years later (have yet to sell one but that's the plan). I started out with a small, old house in a C area and have gradually bought bigger and better houses to the point where right now I'm living in a 4K square foot mansion, lol. When I now go to my lower end rentals that I used to live in, I find it difficult to stomach moving back in other than the low cost of living compared to where I live now. 

Looks like it's about 1K per transaction, but the 45 day limit of getting something under contract seems really unrealistic, almost pushing people to buy the first crappy deal. It takes time to find deals and since you make your money when you buy, I almost feel like the 1031 can put pressure on you to take lesser deals. 

Also, I like having the option to not buy right away at what could be a peak.

I actually already sent them a little note not long after I posted (they are not a very good tenant, spend a lot of time dealing with this crap with them) that basically said I wasn't trying to be a dick but that they have over $800 in unpaid bills now and they are making me nervous enough to want to give them notice. At this point, I've written them off as a problem tenant anyways so if they feel I'm coming on too strongly after all my lenience then either pay your bills or tough cookies.

Last I checked (October) the house was just like I left it not counting all their junk (huge spenders). I'm hopeful I can sell it without anything other than a deep cleaning hence why I figured end of March. It's a 12 year old house so not a ton to do to it. Plus I will finally be rid of the HOA! YAH!! April is the best time to sell a house in this area based on Zillow's statistics.

This tenant has a bankruptcy from 6 years ago. Has lived here 8.5 months. They take great care of the house BUT, recently racked up an HOA fine after 4 repeat warnings from the HOA, and today I find out there is an outstanding utility bill from when they moved in April 2016 that they have not paid in the amount of $600. Luckily I asked for a huge deposit from them, and although they are communicating to me about the issue, I feel they are just not addressing it and giving me lip service.

On one hand I don't want to be heavy handed, though doubt they can find another place to live with the bankruptcy in their background very easily so they have no where to go, but on the other hand, they clearly just brought the same habits from their previous lifestyle with them. Were late on rent first 5 months in. Only once in 9 months but between the bills, the HOA, and their past credit, I'm hesitant to continue this relationship anyway, would just like to time it for sale in Spring. They do take good care of the place from my 6 month inspection visit, but this has become my most time consuming rental despite being a high end rental. Why? Because of these tenants.

So what say ye? Hash it out with them via email/text, post 10 day notice to cure or just give them notice I will be selling at the end of March? 

I bought my first house paid in full for well under that near the bottom of the market just south of Seattle. Now I have A LOT more than that. I spent all my money to buy a paid off place to live, still to this day, one of my wisest moves. Alas, lot's of deferred maintenance coming up, so going to have to flip eventually and repurchase elsewhere.