All Forum Posts by: John Barrett

@Ana Vhan While I understand your frustration at this situation, I would encourage you to just write the $400 off and take this as a lesson learned.  Ultimately, this is not worth the time nor aggravation to pursue.  

All landlords experience situations like this (experience through pain/expense).  The ones that are successful use these experiences to alter their process/procedures/systems to ensure they do not happen again.  Just don't allow your frustration with the situation to cause you to make any other potentially more expensive mistakes.

John

@Jake M. just curious about your stance on not utilizing mortgage brokers?  I have worked with few different banks and mortgage brokers to secure loans and I have consistently done better on rate/terms via a mortgage broker.  I am more than happy to pass on contacts of both if you would like to reach out to them.

With regards to the loans originated by brokers, they generally get sold within 30-90 days.  While it is a slight hassle to setup the new online payment, I have found the lower rates more than make up for it.  With regards to the fees to originate the loan, I don't spend an excessive amount of time worrying about those so long as they are a small part of the cost.  If I get an excellent rate and the broker who secured it for me makes an extra $300-$500 on the origination, I will be more than happy to pay them.  Long term, that cost will be a very small compared to the savings a really good rate will provide me.

Best of luck,

John

@Gabe Storm I would suggest you start reaching out to some local banks (credit unions are great) regarding getting a HELOC on your existing property. I have been hearing that banks are being much tighter with issuing new HELOCs at the moment. As such, I think you may find it difficult to access much of the equity in your property.

Also, you will need to understand how pulling whatever money a bank is willing to lend to you will affect your DTI ratio. While not a deal breaker, it could make getting financing on whatever it is you are looking to purchase more difficult.

Best of luck,

John

@Ethan Daniel Dacar I think there are more ways this could go wrong for you than there are ways it could work out well.  Just be really careful when getting into partnerships with others. The transaction costs on real estate are very high and if you were to have to sell the property before you are ready it could really mess up your numbers.

I generally recommend that people start by house hacking and utilize smaller down payment loan options & roommates to get started. If that could be an option for you, it would allow you to better control your own destiny with this investment.

John

@Davinder Singh There is no requirement to have a lease notarized that I am aware of but you can check to see if there are any city specific requirements for where you are renting.  With regards to your current lease, I would ask for a copy that has the landlords signature but the critical element is that you have signed it and have been performing to it for the last year.

I would read your lease & state RCW's with regards to what rights and obligations the owner has with regards to the sale of the property.  Also, the tenants Union is another good source of information to understand both parties responsibilities.

As I understand it now, with proper notice the owner has the right to sell the property and show it (viewings / inspections).  That said, in order to limit potential exposure I would propose that a detailed video walk through could be made for the property.  While a buyer will likely still need a home inspection a video could help reduce the need for multiple showings.

Best of luck,

John

@Joel Martinez I got my nephew to read The Millionaire Next Door when he was in high school. The original book is a little dated but I wanted him to see that almost everything you are seeing on social media is basically about wealth and success is wrong.

Another book that depending on his maturity level could either be inspiring or too much is Extreme Ownership. I loved that book and wish I had read it when I was younger.  It really helps you see where you are not taking responsibility for your life and outcomes.

John

@Lamar Washington I didn't start investing with a mentor but I did read a lot of books and do research on properties online. This is not to say I did not have people I asked advice from. However, by doing the research I had a more confidence in my decisions. While I likely made more mistakes this way, I do feel I benefited from having to figure things out.  

As @Connor Nellans mentioned, I have used podcasts and books as my mentors along with local REI groups. All of these things expand your current way of thinking and expose you to investment ideas / methodologies / tactics that you might not have otherwise thought of. Often people think a mentor is going to give you all the answers but rather a good mentor (person, book or podcast) will simply help you determine the right questions you need to answer.

John

@Daniele Locke I would look at joining either RHAWA or WLA both are organizations that support Washington Landlords.  The costs vary between the two organizations but they both offer all the documentation that is current with all applicable laws.  Additionally, they advocate for landlords both with the legislator and bring legal challenges against the cities and state for regulatory overreach.

Beyond that, you can also join local groups on Facebook & Meetup.com.  This will put you in contact with investors in the markets you are interested in and provide relevant information about how they are dealing with actual situations.

Final piece of advice is to treat this activity like a business from the start.  I don't mean being uncaring towards your tenants and only focused on the return. Rather use the numbers as your guide, be disciplined and do not letting emotions get the better of you.

Best of luck,

John

@Jacob Emens Apologies, I didn't realize you had finalized this purchase.  Anything you can do to lower the amount you are spending every month will benefit you. You can find a lot of information online about the returns for various upgrades which should help you decide what projects to do in each unit.  This will also help you to not over improve the property.

I would start by living in the smaller unit and renting out the larger one.  It should generate more in rent and will give you time to upgrade the smaller unit.  Not sure if you and your finance would be willing to have a roommate even for a year it would allow you extra income to finance your rehab.

John

@Jacob Emens Unfortunately, I can't tell you what you should do in this situation as we all have different investment goals, styles, strengths and weakness. 

What I can tell you is that I would not purchase this property as It doesn't fit my model for investing.  When looking at projects, I like ones where I can identify where and how I will add value to the property, while generating a return on my investment.  In this way, I can force the asset to appreciate rather than relying on market appreciation.  Ultimately, I want projects where I have more control over the outcome (no guarantees but better odds).  Based on layout, this house seems like it would work better as an adult family home or possibly rent by the room.  Both those options will be greatly impacted by COVID-19.  With no end to the pandemic in sight, this house seems high risk to me.

John