All Forum Posts by: John Barrett

@Rickie Patterson Jr I don't have a lot of experience with skip tracing as the majority of the properties I have purchased have been from the MLS or via an agent. I have played around with the Deal Machine App and it seems pretty good and user friendly but I do not have any relevant success story from using it.

My general impression is that whatever source you are using to find absentee owners, it is going to require a lot of effort on your part.  That will mean making phone calls, sending letters and chasing down all possible contacts for the property owners.  The majority of which will yield very few results.  Ultimately, to be successful it is a numbers game and a willingness to persevere overtime.

There are a ton of different strategies you can use when investing in real estate.  The key is to find the one that matches best with your talents, interest and resources (time or money).

Best of luck,

John

@Rickie Patterson Jr there are a number of real estate investing groups in the Seattle area.  The vast majority can be found on meetup.com.  The key is searching for a meetup that aligns with the type of investing that you are interested in doing.

I like the Cascadia Investor Alliance meetup which is normally in Marysville but they have multiple other locations.  There was also another group that started meeting in Snohomish just before everything closed due to COVID-19.  The challenge currently is that most of these groups have not started the in person meetups and I think it will be a while before they do.

Best of luck,

John

@Cindy Rule It will really depend on what your plan is.  If the goal is to sell the property to a home owner (as opposed to an investor) gas could be a good option.  Renters do not seem to pay more for gas than electric so the additional cost and risk don't make a lot of sense.

Regards,

John Barrett

@William Curry While price certainly does not always equate to value, be careful not to get overly hung up on the cost.  For me, accountants, attorneys and doctors are not places to look for the most affordable option.  Rather find the very best option you can afford.

I would start by networking with other investors in your area and find out who they use.  There are also a lot of tax professionals who work remotely who could also be a good fit for you.

Best of luck,

John

@Shain Cannon Everett is a great market to invest in and the area directly East of Boeing has a number of multifamily properties which can tend to work well for a house hacking if you wanted to look at doing another owner occupied type of situation. 

I would caution you about quitting your W2 job.  Lenders love stable (2 years) W2 income and it makes getting approved for a loan much simpler and less expensive.  While this is not a deal breaker most of the time, getting access to low cost financing does make your first investments easier.

Best of luck,

John

@Page Trip The market is extremely competitive at the moment in desirable neighborhoods.  This is due to the fact that there is historically low inventory on the market currently as many people who have houses are not interested in moving due to COVID-19. Combine this will historically low interest rates and the fact that many renters who can afford houses are looking to get out of apartments is leading to rapid price increases.

While not necessarily the popular opinion, have you thought about waiting until further into next year before purchasing a home?  Based on the information the Fed has released, it seems likely they are going to continue to hold interest rates down.  You do take the risk that prices will continue to escalate but it could also go the other way as more people list their homes for sale.

Best of luck,

John

@Jordan Workman In a house hacking situation, my opinion is that the goal is to minimize your monthly housing expense.  If you can eliminate it entirely, that's great but it is not required.  The reduction in monthly expenditure will create space in your budget for increased savings and investing.

With all things in investing, there are trade offs.  Washington in general has higher priced real estate but has also seen greater rent growth and higher property appreciation.  While this makes generating high monthly cash flow challenging, appreciation gains "can" (no guarantee it will continue) grow your wealth quite quickly.  Also the cash flow generated monthly will be subject to your rents and level of debt you are carrying on your property.  Low down payment (good for ROE) or low rents will make it hard to cash flow monthly.

Your first property doesn't need to be a home run to be valuable to you.  Your returns in experience, education and confidence to do your next deal are almost always more meaningful than your cash flow.  Just my thoughts.

Best of luck,

John

@Natalie Wells You should reach out to @Nghi Le with Certain Lending as they have a bunch of asset based loan programs.  Given the amount of debt you for this project, you may need to look at doing a hard money or bridge financing to close and complete the repositioning of the property.  Once that is done you would then be able to move into more traditional longer term financing. 

They host financing office hours with other lenders who can walk you through your options a nd help you figure out the pros & cons of various scenarios.

Best of luck,

John

@Doris Moore As others have stated, I prefer purchasing properties where the tenants are either on month to month leases or their current lease will soon be expiring.  Additionally, we use 6 month leases to start with that automatically become month to month following the initial period.  This allows either parties to end tenancy should it be a bad fit.

Additionally, now with COVID and WA State's eviction moratorium many landlords are letting leases revert to month to month. This is being done to provide more flexibility should it be needed once this has been lifted.

John

@Brian Glasspoole You have two questions to figure out: 1.) How to resolve the current situation with your tenants? 2.) What is your long term investment goals and how does this property fit into that plan?

With regards to your tenants, what communication have you had with them? Do you know what is causing them to no longer be paying rent?  My first recommendation would be to reach out and find out what they are dealing with and make a plan.  There are still rental assistance programs available and sometimes it is as simple as connecting people with the resources available to resolve the situation.  Eviction moratorium will likely continue to be extended bu this will be an issue for all rentals.

With regards to your long term strategy, this really depends on what you are looking to do (long term goal) and what level of effort you are willing / want to put forth.  This will be heavily dependent on your investing philosophy as well as expectations for the future. I personally like trading up, but if you are confident in the continued appreciation that could provide a greater return with far less effort.

John