All Forum Posts by: Jack B.

In an area like you describe, that is to be expected. Did you think you were going to be dealing with Harvard educated millionaires?? Of course they are low quality tenants, look at the ratio of renters to owners. That in and of itself screams ghetto, low income and uneducated tenants is what you're going to get. They don't show up to appointments? Shocker, didn't see that one coming. Sorry to be so blunt but you made a poor investment decision buying where you did...

It is the slow season which I'm sure is making it that much tougher but you're going to have all kinds of problems with this rental and tenants. Do not hold...

I bought most of my properties in the Seattle area at the bottom or near the bottom. They've doubled in value since then. Trouble is, with a market 5 years into recovery, not even most of the multi family places I look at cash flow worth a damn. Cap rates at 4-5%!

So I'm debating sitting on what I have now, taking care of deferred maintenance and pooling cash ready for the next dip. Anyone else in the same boat and doing the same? Next summer I'm looking at taping equity in my houses and sitting on the cash waiting like I did last time, for the right buying opportunity to arise...

You are speculating on appreciation, and as others have noted, your cash flow is honestly mediocre for the amount of assets and risk you hold. I make more cash flow just from four rentals worth a fraction of what your portfolio is worth. 

The only way I'd speculate on appreciation is years after a market crash. Not immediately after, but years after because it takes years to bottom out. In your shoes, I'd sell the rentals in Vegas and reinvest the cash into higher flowing MF apartments or put some of the cash into your highly leveraged California properties so that they cash flow AND gain appreciation.

Personally I'm not taking on more debt right now. I was tempted but ran the numbers and it's too risky to. Properties at these prices don't cash flow worth a damn right now and gambling on appreciation is exactly that. At least my properties rent for well above the expenses so I can hold them for a long time if the market did tank plus I could always begin dumping them and still make money from their years of appreciation, as they don't instantly drop by 50% in value overnight. 

I think the play right now is to stack money for when there's another market bust. In your case, I'd also rebalance the portfolio to have cash flow positive properties in California that also appreciate. Much less risk. The first rule of invest: don't LOSE money...

Adrian, are you still focused primarily on condos? What has been your experience with condo HOA's. I have an HOA for one of my SFH's and they suck. Glad I backed out of buying another place in an HOA.

 All a matter of your personal opinion with no credible data to substantiate it. Just like the people who claimed Obama being elected affected oil prices. It didn't. The timing was not even congruent with his election, but the data showed oil prices had actually changed due to a shift in the supply curve as well as the demand curve, due to OPEC output cuts and slowing demand in China, India, etc.

The market appears to have much more up side. Other than the occasional slow down, it should be fine, and although it's good to be thinking about where we are in the cycle, you rarely lose when you buy for cash flow, and consider appreciation a bonus. I own a number of SFH's in the Seattle area and always bought primarily for cash flow. Much less risk if the market turns against you and you're still making 10K a year per property from rents...

A way to mitigate your risk is to just consider it an investment in free housing. Buy a four plex with 3.5% down and rent out four units, live in one. You should still see appreciation for years to come, but even if not, living for free and making money off the side as inflation raises rents (beware Seattle rents have been down 12% this year) and your profit increases despite your expenses staying mostly fixed (taxes and insurance will go up, as will maintenance costs).

Feel free to PM me with any questions.

 tenantbackgroundsearch.com, but no matter how hard you vett (sp?) you can end up with a professional tenant. Some people just know how to game the system and keep from having an eviction on their record. And who knows who you are talking to on the other end when checking references....You can try to pry info about the house to see if it's the actual landlord, but even then scammers are pro's and have this down pat...

I JUST went through this a couple months ago. Lived in the house myself, had a long term tenant, got a new tenant, who immediately complained of bed bugs. Inspector found NONE, not even eggs or poop. Sure enough, they became a huge hassle, demanding more bed bug inspections each time I tried to get them to pay their rent, follow lease terms, etc. Luckily I only do MTM leases and just gave them notice to move after that (I had already had a chat with them about their accusations and attitude toward me and gave them a chance). 

Had another inspection done after they moved out, just in case, since they lie at every turn, claiming I said this, and promised them that, and that the house was infested with bed bugs and they were moving out early and that I told them I would give them a refund, etc. Except no such thing was ever said and all their claims are easily proven as lies.

Funny thing the tenant claimed they were staying at a hotel/motel and called them and they said they had no beg bug infestation, etc. Too bad it turned out they were actually living in another rental house and stated so on their application. Suffice it to say, bed bug inspections from two different inspectors found no bed bugs. 

Be warned, lot's of scammers out there who try to get out of paying rent until their imaginary problems are fixed. Bed bug heat treatment is expensive, as already noted. Since they are complaining 8 months into their tenancy, I'd make them pay it or kick them out. Even after they move out I would take the cost of heat treatment out of their deposit as no reasonable person could claim the bed bugs existed the whole time but they are only now complaining about it 8 months later. They brought the bed bugs into your house....

 This is exactly what I did when a recent tenant/scammer complained of bed bugs. Inspection while they were living there and after I kicked them out, showed no signs of bed bugs at all. I even had two different inspectors do the inspections and got the written receipts and all of it on video with their permission.

Are they on a month to month lease? Once a problem always a problem has been my experience. If you give in now, it WILL be something else in a few months or weeks. I'd give them notice to vacate. I recently did this with a tenant when they kept making more ridiculous demands.