All Forum Posts by: Joe Patton

Thank you all for the replies - very helpful!

I am in the process of renting a few of our units out in Seattle and I've been hearing a few stories of potential renters losing their jobs or being on unemployment so not being able to show a proof of real income. In Seattle and in Washington we have an eviction moratorium in place for the foreseeable future. Does anyone have any ideas of the best way to tackle this issue?

Thanks in advance!
Joe

I am looking for some resources to help me find a good property management firm for a property of mine. It seems as if there is no "one stop shop" for finding a good manager after some preliminary digging. Any guidance on this would be greatly appreciated!

Hi KC,

There are some advantages and disadvantages to out of state rentals. Advantages can include better market opportunities, tax write-offs for travel to your properties, potentially more affordable deals than in your home market to name a few. Disadvantages can be needing a property management firm to take care of your investments which will take away from your bottom line, potentially not understanding out of state market trends as well as you know your home market. The landlord vs renter friendly areas vary from state to state and even from city to city so you may have some more freedom to choose a market where you have some more control over your asset.

@Thomas Mattausch the heat pumps have been a nice addition. The building is grandfathered in and the basement is not a separate unit so it is not technically an AADU (I misspoke). I am just improving the unfinished basement to more of a "man cave" which has access from one of the existing units to improve the value.

The list price was 659,000 and we beat out a few offers with an escalation clause. We were not allowed to tour the property until we had a written offer submitted due to COVID so that helped keep the amount of offers low in the first place.

Hi Lukito,

A good place to start is to figure out which type of investing you would like to get involved with: Single family, small multi, commercial, etc.

I started by reading as many books as I could get my hands on to learn about finding good deals, financing, the BRRR method, property management...the list goes on. Raising Private Capital by Matt Faircloth is a good start to learning the basic principles of investing and different forms of creative financing. It's a great time to learn as much as you can while you're still in school so that you graduate and start one step ahead.

Most important is to find a great deal. It's been said that you don't make money when you sell, you make it when you buy.

Thanks Jared! We were able to provide our tenant with an incentive package that included finding a new place, covering the cost of relocation, helping relocate and some gift funds to help cover the new damage deposit and first/last month's rent. It was the only way we felt was possible to have a somewhat win-win situation for all involved. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $717,500
Cash invested: $180,000

I purchased a duplex here in Seattle in July and have been renovating both units while converting an unfinished basement into a livable space.

What made you interested in investing in this type of deal?

I was looking for a buy and hold property to renovate, increase rents and cashflow after my debt obligation. I found a great deal and closed three weeks later.

How did you find this deal and how did you negotiate it?

I found this property on Redfin and sent it to my broker who took it from there.

How did you finance this deal?

Bank loan to purchase the property with personal financing to cover down payment and renovation costs.

How did you add value to the deal?

I re-sided a substantial portion of the exterior, added heat pumps to all units, new windows and finished out the basement.

What was the outcome?

To be determined

Lessons learned? Challenges?

We had an extremely difficult tenant situation to deal with. Tenant had given one month notice to move out before we bought the property but did not honor the notice when time came to move out. I learned that landlords have very little liberties when it comes to dealing with difficult tenants especially during COVID pandemic. Not even threats to personal safety or a family member needing to move in allow for eviction.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jon Wagher from Caliber Home Loans was an awesome person to have on my team. He was a trusted advisor, always available and cared a lot about making sure I got a good deal. Would highly recommend.