All Forum Posts by: Joe P.

Thanks @Annchen Knodt and @Alexander Felice...that was something I was considering as I hit my first BRRRR, but I think I will go the traditional route on this one. I assumed the quick refinancing comes at a cost to the investor and if there is no real need to cash out other than cashing out to get the money back, might as well wait. My goal would be to get that BRRRR "under control" during that period, see what I missed, lessons learned, etc., before I run off to the next one anyway...

@Laura Dantel what I've heard...take it with a grain of salt...is to ensure contracts are not 50/50 (e.g. 51/49 in terms of control, even if you split profit 50/50) as someone needs to be able to make the "final decision" when those are needed. A lot of disagreements come up because two entities cannot make a decision and have no recourse when an impasse comes up other than litigation and/or arbitration, which costs time and money.

You also want to have exit strategies you both can agree on. If X happens, we will do Y, unless Z, type of scenarios. Spending a few hundred bucks on a lawyer that can draft an amenable solution would be best.

Yes, I have a duplex and I'm working on my 3rd door as we speak. Nobody disagrees that this is theft. In fact if you read my post, you'd see that this type of activity essentially would work ONCE, if at all. A tenant that plays this game once, will never be able to again. Why? Because you would still seek damages against them, judgements against them, work to garnish wages until you were made whole, etc.

That was my point about my earlier posts. First, the law is probably not going to get enacted, as it doesn't sound like it has mayoral approval. Second, lets say it does become a law and someone tries to take advantage of it...again...this person, lets call them Tenant John Smith, is going to have eviction against his record, eventually. John Smith will have judgements against him for non-payment of rent. John Smith may be reported to credit bureaus, bringing down his credit score. So while John Smith *might* have gotten away with this one time, he certainly wouldn't again if smart landlords screened properly, which is something I assume most of us do regardless of this law.

So, a majority of tenants are good people who won't game the system. It comes down to proper screening, calling references, etc. This law is not intended to tell landlords to shove their own boot up where the sun don't shine...its intended to protect folks who shouldn't be evicted for a variety of reasons. I don't AGREE with the law at all -- but the reactions to it are asinine. This is still America; understanding why someone would propose that type of all could help to contrive an ACTUAL solution -- in fact instead of bashing the law, I proposed a solution that would be SELF-SUSTAINING, helping people who might need the help, when they need the help...but also funding (and re-funding) the program.

I personally have no problem helping folks when they need help -- but also protecting myself and other investors from scammers. In a world where people work together, don't overreact (like the proposed law does, and the people looking at the proposed law are doing), we can achieve a lot and maintain that balance.

Hope that makes sense and clarifies it. I'm not advocating for bad tenants or giving away the farm. And this law, as written, is poorly done, and shouldn't be passed. But I can understand where it came from. I wish I lived in Seattle and could try to work with them on a solution. It sounds like some of you do...instead of hemming and hawing, pay your representatives a visit and help solution problems. We spend a lot of time blaming the other side of the aisle on problems, but real value comes from rolling up your sleeves on a solution.

I did not intend on being the guinea pig, but I learned a very simple line-item that all new investors should consider, and I'm happy to share and expand on the mistakes I made. Any property you buy, have an "oh crap" budget set aside for things that will go wrong when tenants start using fixtures in the property. 5k to 10k ought to do it.

And if you can't afford and "oh crap" budget on a property, than you probably can't afford the investment. Things will go wrong and you need to be able to handle them somewhat comfortably. Not having any money is the definition of uncomfortable.

My duplex in NJ has yet to turn a profit. I've had it since August 2018. My biggest mistake was assuming there wouldn't need to be much done upon pickup of the property, but deferred maintenance killed my CAPEX/maintenance budgets, which were calculated at a "house is stable" rate.

Any property I do moving forward, I'll have a 5k to 10k deferred maintenance budget set aside for the first year. This way its more of a purchase expense -- if it gets used, ok, my initial COCR is lower than year 2, but I'm covered for any gotchas. If I don't use it, great, its money I didn't have to spend.

Obviously, I was a little discouraged, especially early on. But we've got the property stabilized, took care of most of the needs, and now on the road to black. All-in-all I'm down about $2,000 on top of my initial investment, which is not horrible. This doesn't factor in any tax advantages/appreciation/pay down of debt, which some of us overlook but is part of the long term plan.

Hey question for other investors...I've had my duplex for about 18 months -- 30 year conventional @ 5.625%, financing $77,150. Now down to about 75k.

Am I eligible for refinancing on an investment property? I'd love to get the payment down $50-60 a month. Add some CF back in my pocket, but don't know the rules.

I'm in the beginning of a BRRRR, financing purchase with cash and a HELOC on my primary for rehab; don't want to mess any of that up.

@Mo Muigai - please, please, PLEASE...shop around.

If you have a good credit score, reach out to some of the mortgage-specific banks, e.g. Greentree. They are typically more competitive with rates, easier to underwrite, less red tape, etc.

Banks like Citizens and Bank of America will execute mortgages for you, but they need their overhead from you so they can turn around and sell it to someone else. Big banks will always put their business overhead costs on everything. Its no different than buying something retail price at Best Buy, or using a big company for plumbing like Horizon -- you will pay for their "company costs" on top of everything else.

Also check in with any local credit unions if you can. They sometimes offer competitive rates with low/no fees to handle mortgage/refinancing. If you have a relationship with them already, they might be spectacularly competitive.

One final note, you said you were putting 20% down, I would assume to put down 25% (plus closing costs!), that is standard for investment properties.

If any of your moron investors are running to the hills over this law (which probably won't happen anyway), better sell to me for 30 cents on the dollar. Happy to take these off terrible, awful, no good, very bad, libtard properties off of your hands. :D

As always, common sense will prevail - screen well and you won't have turnover. Professional tenants don't need a law to game the system. Good landlords/investors know how to spot these folks. Even if the law does get enacted, and someone takes advantage of it, you can STILL. PUT. A. LIEN. AGAINST. THEIR. NAME. AND. GARNISH. THEIR. WAGES. AND. SEEK. JUDGEMENT. WHICH. IS. ON. THEIR. RECORD. SO. THEY. CAN'T. DO. IT. AGAIN. Say it louder for some of the supposedly brilliant investors in the back who are too busy watching slanted TV to know better.

Round and round the world turns. Like I said, if any one of you want to make me a multi-millionaire overnight, please, just sell your properties to me. My wife and I will surely appreciate it.

You are spot on. Goes to show you political beliefs have now transcended rational thinking, education, and intelligence.

Instead of taking a rational approach to this story, perhaps understanding the root of the law, how it would actually happen if rubber hits the road, how to counter the law itself or open dialogue from parties, or even how it might not even happen given the Mayor doesn't support it, people jump to conclusion, wrap it around 'Merica being great or something, and then hit send.

People are acting like every single tenant in Seattle will be taking advantage of this. The reality is, 99% (or something in the high 90s) of people are just good people, from all walks of life. They pay their bills, they go to work, they're good citizens. This law, even if it gets enacted, is not going to change that. IF someone takes advantage of it, the landlord has recourse. You still owe the rent. You can still have a judgement against you. Your wages can still be garnished. An eviction will still go against your record, thereby signaling to future landlords that you either failed or decided to pay your rent and were evicted and/or had judgement against you. There are repercussions to all actions, including refusing to pay your bills.

I'd like to personally write this information on a baseball bat and swing it at some folks' head, because I believe that's what its going to take to get it through their thick skulls. But now I'm venturing into Twitter land with comments like that. :)

For everyone losing their mind over this law, don't forget that eviction and liens still exist. So yes, theoretically, a tenant could stop paying you in November, and you can file for eviction, but can't actually evict anyone until April 1. Sure, it could happen. But we forget that these are people and that eviction, those liens, etc., still go against that person. You can still take them to small claims, they will still have judgements against them. They won't be able to do this over and over again. That constitutes fraud. There are still consequences in this country, except for some of the highest offices in the land ;)

Try not to look at everything from a liberal or conservative lens - 50% of the population is not responsible for everything bad in this world. A large majority of us all have similar moral beliefs, just different approaches to achieve it.

Where I think this councilwoman was going, and unfortunately, failed to achieve her initial desires, is to avoid putting at-risk families on the street with no recourse. She may have a few people in mind when it comes to this bill; maybe a family fell behind on a month or two months and got evicted. Sure, the human in me says that's horrible, but the landlord/property owner investor in me says I can't subsidize your housing when income is lost.

What might make more sense is to offer people who need assistance...actual assistance...repayable over time. If the city wants to truly help those people, have a rent assistance program that says the city will pay your landlord if you lose your income, up to 3 months. Get a job, and pay us back over the course of a year to two years, with extremely modest interest. This type of solution uses tax dollars to start, sure, but its a program that should refund itself over time, solves the need for an eviction for a short-term problem, gets the landlord their rent so they can pay their bills (and maybe speak to the tenant to move out if it won't work long term), and allows the tenant to pay back over time, which after a job loss...for any of us...would be tough to manage.

If there are any Seattle landlords here -- and I suspect there are and you don't like this program -- don't go and just blame "the liberals", obviously there are ENOUGH cases that prompted this type of legislature. Offer up an alternative solution and speak to your representatives about it.