All Forum Posts by: John Barrett

@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

@Ryan Lam are you just looking for this to be and investment property or could you look at doing a house hack?  If you have the option to do a house hack, that could be a good way to buy an ugly property in a good area and force appreciation.  After two years you can claim your tax free gains and move to the next one.

You are trading the cash flow in the short term for growing the equity which could be far greater in a couple years.  This also gets you out of having to deal with the worst of the landlord tenant laws.  Obviously it's not for everyone but just a thought.

John

@Ana Vhan I would follow the previously provided guidance of using an attorney to handle all the notifications of the non-renewal with your tenants.  My understanding of the law is that you do not need to provide a reason for non-renewal on a term lease that does not roll to month to month when proper notice is given.  That said, you should never take legal advice from strangers on the internet. :)

So spend the money and have your attorney to make sure everything is done in compliance with the current rules and you can move on from this tenant.  It's not fun spending the money but your are buying yourself peace of mind.

John

@Saravanar Boopalan I would strongly recommend using the either of the standard RHAWA or WLA lease agreements.  Having an established and consistently applied screening criteria is also a must.  You will want to determine this prior to advertising your property for rent.

As for working with the Section 8 program, your experience will really depend on the tenant you select and the case manager for that tenant.  In general, we have had more good experiences than bad with the program and have tenants currently who receive this support.  Just make sure you account for the time it will take to get per-inspections of your property prior to a tenant being able to move in and the program issuing payments to you.

John

@Tina Lee I most often order lights from Home Depot.  I think they have a number of good looking designs and you can actually go see them in the store.  This will allow you to better visualize what the actual light will look like once it is installed.

Everyone's preference / style is different, so it is difficult to provide specific recomendations.  If you need inspiration, just use Instagram or google ceiling light fixtures and you can quickly see what others are doing with a similar space.

John

@Jay V. I personally would return the funds if there are no damages and another tenant has already been found.  You have almost nothing to gain and potential for a number of headaches / frustrations by not returning funds.

Bottom line, treat your tenants the way you would like to be treated.  In my opinion, dealing with people in an equitable way is always a good policy.

John

@Nina B. I wouldn't be concerned with the fact that you are getting interest from roommates.  As others have suggested, just screen them both per your normal rental criteria and have them on the lease.  We also have in the lease that any new roommates or swapping of roommates requires them to pass our screening. 

We have had more issues with tenants who were married and then separated than from the roommates we have had.

RHAWA & WLA are both good organizations which have information that can help you if you need support with your lease agreement.

John

@Mark Weins I think you should start by doing some networking with other investors who are operating in this space. I believe there are city approved designs that could help save cost on the plans for a DADU / ADU, but the $100K estimate seems very low for construction in Seattle. I see a lot of people throw out construction numbers that are closer to $250 -$350 per sqft (depending on finishes). This range matches more what I have seen.

Besides the cost of construction, don't forget to account for holding cost and entitlement costs.

John