All Forum Posts by: John Barrett

@Scott Trench I think human nature makes it is easier for people to be more pessimistic than optimistic (survival bias).  COVID greatly impacted what people perceive and feel about their economic situation in general. This has been combined with reduced purchasing power and a run up in asset prices as a result of high inflation. People are still dealing with the challenges from COVID, government policy responses and the inflation that resulted.
 
Behavioral economics tells us people experience the pain of losses twice as much as gains. People are experience real pain but I think psychology is really what's driving the doom narrative.  No doubt social media algorithms are also making it look like this view of the world is more prevalent.

All I know is that you can bet on the end of the world, but you can only be right once and you can never collect.  As such, betting on the end of the world may be a popular narrative but, it's not a sustainable strategy. Acquiring knowledge boosts confidence in our convictions and enables you to invest even in the face of uncertainty.

John

@Aaron Knight You should look into joining the various Facebook groups (WAREI is one of the larger) as this will get you connected with others investing in the areas you are interested in.  Additionally, I would look into the various groups on Meetup.com.  They are not as active / robust as they were prior to COVID but there are still a number of people getting together.

John

@Gloria Gronka I think a great way to get started is to attend local meetups.  There are a number of them around the Seattle area as well as some different investor Facebook groups.

By meeting other investors you will be able to get information from different people utilizing different strategies that work in this area and determine which are the most interesting to you. Investing is very personal as it really depends on your skills, resources and challenges you want to take on. Once you have this figured out you will be on your way.

John

@Celine S. It's really going to depend on what your lease agreement states and likely what city your rental is located in as there are some city specific ordinances that could be a factor.  We use the RHAWA lease agreement, if you are not a member of that organization or WLA, I would recommend you sign up.

In the RHAWA lease agreement (not Seattle specific), it states that security deposit can be used all purposes including unpaid rent, damage, cleaning, late payment, utilities, keys and other charges.

It is never a bad idea to pay for an hour of an attorney's time to go over any of these concerns and then you can be confident you are following the law.

John

Quote from @Sanjai Ganesh:

Hi Julien, Thanks for your response and the wishes. Yes. It does seem like it. But I am just starting out and hopeful to find someone :).

 Hi Sanjai, I would argue against finding a "investor friendly" contractor.  In every project you are trying to achieve a balance between cost, schedule and quality. You can optimize for whichever one you want but it will affect the other two. As investors we all try to manage to the contractor costs but my personal experience has always been much better when using the best contractor I could afford. Time to completion is often the most critical variable in determining the success or failure of the project.  The "investor friendly" contractors tend to be available for a reason.

Start with attending local meetups in the area you want to invest in and network.  That is where you will find out which contractors do a good job and are good to work with.  

John

Quote from @Thuan Nguyen:

This is more of an ejectment case, rather than eviction. How was your experience in working with attorneys in general? I have found a local attorney who is willing to handle the case but difficult to get a hold of. He seems very busy and maybe slow/lack of communication to keep client in the loop. Is this common practice when you're working with an attorney?

Unfortunately, I think this is more a symptom of the level work currently on the attorneys working these types of cases.  It was very common for attorneys to not take on any additional cases following the eviction moratorium due to the increased workload. This is in addition to the new rules, processes and legal shenanigans by the "free" legal representation provided to tenants.  

Worst case you can look into other attorneys who maybe able to better serve you but know the grass isn't always greener.

Best of luck as you resolve this situation.

John

Quote from:

Thanks for the guidance. I will reach out to them.

We have also worked with Rob Trickler at WA Landlord Association to handle an eviction for one of our units. The process is different in each county so I don't think our experience in Snohomish County would be exactly applicable for your situation.  The cost really depends on how aggressively the tenants fight the eviction.  Additionally, a lot of tenants are utilizing free legal assistance to delay the process.  While frustrating, ultimately all the stalling and delaying tactics will only delay the process, not stop it.

My best guess is that it will take 1-3 months and cost anywhere from $1K - $3K in legal fees.  The loss of rent will likely be the biggest expense.  This is why a lot of people recommend cash for keys.  Just remember, no payment unit they are out and you have changed all the locks.

John

@Keng Fong I would suggest you start by looking for meetups (use both Facebook & Meetup.com) to start networking.  At this point I don't think you need a mentor but to find people who are investing in your area.  This will allow you to meet a group of investors doing different things in your area. 

From my experience, pretty much all the investors love talking about real estate.  Meet people, learn, ask questions and save your money.  Then when you are ready you can ask people you in your network for input about any investment you are interested in making.

Hope this helps.

John

@Lawrence Walcott without cashflow your choices are limited. Anything you do leverage wise will make a no cashflow situation a negative cashflow situation.

I would really think about why you want to keep the property as a rental? There is a natural bias to overvalue things we own. What could you do with the equity you have in the property? Thinking about this as a question of opportunity costs might help you see what other options you have for the equity in this property to grow your assets.

Best of luck,

John

@Scott Trench I agree with the higher for longer view of mortgage rates.  The Federal Reserve has also been reducing it's balance sheet (~$730B) since March of this year.  This has an additive affect on keeping rates higher / potentially increasing from here as borrowers compete for less available dollars from lenders.

Good reminder to make sure you are comfortable with your financing term and ability to service the debt.  If the rates fall you are in a great spot to capitalize, if they stay elevated you are not at risk.  Having a solid defense does not make for very exciting social media posts but no one ever seems to be posting about how their portfolios blew up. :)

John