All Forum Posts by: John Barrett

@Myles W. Welcome to BP.  We all start investing when we are ready and that time is different for each investor.  Focus on your goals and the actions you need to take to reach those goals and you'll be fine.  It's easy to spend time thinking about what could have been but it's never a good use of your time and energy.

In non-covid times there are a few different meetups in the north end.  I think most have been on hold for the last year or so.  I am hopeful these will come back when people are able to gather in larger groups.  Feel free to reach out if you have questions.

John

@Pritam Karmakar The local laws governing landlords can be very impactful on the operation of your rental property.  In Seattle, there are more restrictive landlord tenant regulations than in other cities in the region.  Some of the cities surrounding Seattle have chosen to adopt similar rules to Seattle.  A couple examples are the winter eviction ban and limitations on some tenant screenings.  While none of these rules / regulations are necessarily a deal killer, they do increase the risk for the landlord.  This is something that I would recommend you check and take into account when you are making your investment decisions.  

Hope this helps.

John

@Pritam Karmakar The majority of my investment properties are in the north end.  Lake Stevens school district is certainly a big plus but I found the recurring costs for things like utilities and taxes were higher than either Everett or Marysville.  As others have said, I think you should prioritize based on where you are able to get the best deal. 

Another thing to consider is whether there are any differences between the local laws governing landlords between the cities.  I have heard that Kent and Auburn tend to mirror the laws in Seattle, but I don't have a rental in either city so I could be completely off base.

Best of luck with your next purchase.

John

@Chen Tong you really are not going to be able to use the 1% or 2% rules of thumb in the Seattle MSA.  Seattle and the surrounding markets have experienced very high level of appreciation over the last few years. Those rules are more applicable for markets that are centered on cash flow (generally low appreciation). 

You can still find deals that make sense on the MLS though you will need to be patient (wait for the right opportunity) but prepared (ready to submit a strong offer on a property that meets your criteria). Given the low level of inventory there is a lot of competition for every property. At some point it will change and become a buyers market, however that appears to be a ways off.

As such, this likely means you will need to change your investment strategy.  Look for ways you can use what's currently available on the market to generate higher returns (greater income or lower operating costs) or offset your living expense while capturing market appreciation. This could be via house hacking or renting by the room style models.  Regardless of what's going on in the market, you always have choices.  Choosing to save money and wait for a better opportunity is also an equally valid choice.  Just focus on what will work best for you and move you towards your ultimate goal.

Best of luck,

John

@Kosh Vokter When we fix up our properties, we generally replace the gutters if they are not in good shape.  The last thing you want is a lot of water around the foundation of your property.  Gutters are relatively inexpensive to have installed and it is really easy to get a quote for a price per foot if you have a relatively simple roof. 

If this is an investment that you are planning to be keeping longer term, I personally would get proper gutters installed and make sure the water is being moved away from your foundation. The Pacific Northwest gets a lot of rain and few things can cause as many problems as water that's not properly managed.

Best of luck.

John

@James Stayton I would suggest looking at a multifamily property just as @Tanner Sherman suggested.  While a triplex or fourplex will likely make the best long term investment, you need to consider what will work best for you and your daughters living arrangement.  If you would be more comfortable living in duplex with only 1 tenant, then that will be a better than trying to force a fourplex to meet your needs.

I would start by searching the listings in the area you are interested in for 2-4 units as well as the local rental groups.  This way you'll be able to compare prices & expenses with rental rates.  This will allow you to determine your budget, area and best financing options.

Best of luck,

John

@Malika McCoy we have used Cabinets To Go out of Kent for our last few units. They are Ready to assemble (RTA) cabinets. They are more expensive than what you can find in Lowe’s or Home Depot but the quality is much better (all wooden boxes) and they look great. That said, the cabinets from a big box store do look good installed and we haven’t had any problems with ones we have installed in other units. So in a lot of ways it will depend on your budget and availability of the cabinets which has been an issue lately. Cabinets To Go Was able to source your cabinets in about 10-15 days (this was over the holiday so shipping could be faster now).

Personally I would add a dishwasher as it’s a feature that tenants seem to appreciate and it should make your unit easier to rent. Is there any other area in the unit you could add additional storage space? Just a thought.

Regards,

John

@Justin Goodin We own both small multifamily as well as a larger commercial multifamily property.  While both are great investments, I think the financing available  (rates & terms) for the smaller 1-4 unit properties are much more attractive at the moment than commercial loans.  Asset prices have run up significantly in the last few years (cap rates have compressed) and I do think that those who are looking at doing shorter term holds (shorter loans) are at a much greater risk when cap rates expand.  Beyond this, the purchase price of commercial (5+ unit) multifamily is another major hurdle for investors to get the capital to purchase.

Regards,

John

@Jacob Radawick We have been currently finding our multifamily properties on the MLS more often than not. There is a lot of competition for smaller multifamily properties currently (1-4 units) but there are still good buys available. The key is having your criteria very well defined, relationship with an agent in the area your are targeting and your financing lined up. This is not to say you must have a loan ready but find a mortgage broker and get them all the stuff they need so you can get financing line up quickly.

This will allow you to quickly filter through all the properties and target just those ones that meet your criteria, make competitive bids and have a good shot of your offer being accepted.  Whatever you do, figure out what your goal is and make sure the actions your are taking are moving your closer to your stated goal.  In my opinion, people get distracted by what others are doing and it only serves to limit their investing or lower the returns on their own investments.

Best of luck,

John

@John Powers Based on your post, it seems like long term you would like to live in WA state.  If that  is the case, I would be looking to narrow down what part of the state you would like to live as this will greatly impact the purchase price of the property you are looking at.  A duplex in Spokane is roughly $275-$400K vs $500-$700K in the Seattle area.  In both cases purchasing as an owner occupant, you will be able to use first time home buyer programs and lower down payment options.

Best of luck,

John