All Forum Posts by: John Barrett

@William Kulow the market for multifamily properties is incredibly competitive at the moment.  I haven't seen a lot of difference in pricing for the properties on the market vs those off market.  This is especially true for any properties in the 2-4 unit space.

You could start by looking up properties that are currently listed and see who the brokers are.  Reach out to these brokers and introduce yourself.  In this way you can start to build relationships with the brokers in the area you are interested in.

John

@Tunui Torres-Borabora I would suggest you start by finding local meetups that you could participate in. You can use Facebook & Meetup.com to find these groups. This will get you in contact with investors in your local market.  These investors will be able to provide you the best information about the current market and what opportunities are available.  

My personal preference is for investing in your local area.  I like knowing the specific areas I am investing in and being able to oversee my properties.  Starting out I have found this method helpful as you have the option / opportunity to use sweat-equity to help control your costs. 

Define your goal and then match up your resources / skills / strengths.  From this you will be able to see how your specific resources support the opportunities you have found by networking.

John

Quote from @Scott Mac:

I noticed they left so much behind when they left--(seems to happen a lot).

I noticed that this was an affordable housing unit.

Taxpayers gross up the renter to afford to live in a better dwelling than they can afford.

Leaving them extra expendable income from their earnings.

Nice program, but so many seem to accumulate a lot of consumer goods and just fill the unit with them.

Not all, because I have entered units that are military clean looking and decorated tastefully.

The thing is, when they leave, they seem to leave behind all of the consumer goods they bought.

It just seems strange...leave everything out on display and live a jumble of things vs put them away, and then leave them.

And I have seen some very substandard housing situations with the same situation.

What did the haul off and cost and did you have to bug bomb the place?

Any thoughts on this (???)

 @Scott Mac In this situation, the tenant had significant substance abuse issues that were the source of the problems.  She had others "living" in the unit with her and I think a lot of the items left there were "acquired" via less than legitimate means. I suspect that potentially contributed to why they walked away leaving all this stuff.  

The cost to completely clear out the unit (all garbage, remaining stuff & appliances) was roughly $3,000 with taxes.  I was going to do the work myself to save the money but my wife was concerned about safety due to the drug use in the unit.  In the end it was smarter to have professionals due the work as it was done quickly and safely. During the junk out of the unit, the company found a loaded hand gun. Once all garbage was removed I was pleasantly surprised there were no pest issues to deal with.

John

Quote from:

Thanks for the informative post.    I have also had good tenants with iffy backgrounds and a couple that didn't work out,    but fortunately for me so far I haven't had that worst case scenario of a nonpayer who would not engage or leave.    I'm in the middle of turning the biggest unit I have (a detached house on shared lot with a couple duplexes) in SnoCo (my new favorite home away from home for investing - the best tradeoff between investing close to home and keeping out of the deepest blue areas of WA IMO)   The tenants in this unit were inherited when I bought the property about 2 years ago and had been allowed to move in by the prior owner as they were friends.   However this tenant had multiple large dogs,  substance abuse issues preventing him from holding a job,   and a habit of coming off as friendly but in reality lying and trying to intimidate everybody around them to get what they wanted which as directed toward me boiled down to letting the dogs do their business whereever they wanted to and not clean it up.   The only good news is they managed to keep paying rent,  and the prior owner had put pretty strong terms about the dogs in the lease.   The tenant also gained a girlfriend/fiance' who had her own issues but I credit her with keeping their household from completely spiraling towards the E-word.   Anyway they finally left, and surpisingly left the house empty but not surprisingly with zero cleaning and wrecked carpets and a few other damage issues.   The house needs a lot of systems updates and other repairs too but thats not their fault,   and I am working through all of it.  In fact after I write this, its off to Everett for the day.

Keep at it and maybe I'll bump into you up there sometime.

WLA   (for those outside seattle)  or RHA (more seattle focused) are great resources for smaller to midsize landlords.   Anybody with rentals in WA should join one or the other.

  

@Brian Hughes Thank you for the encouragement and I am glad to hear you didn't end up with a situation like we did with our unit.  While we have increased our screening criteria, I still like being able to give people a chance.  Fortunately, the majority of the time things workout well.  Unfortunately with the changes to the rental regulations when they do go badly, the costs add up quickly.  We actually use both WLA & RHAWA.  They are a wealth of information and very helpful organizations. 

I am a big fan of Snohomish County and from the sounds of it you have a great investment there. Hope all your renovations go well and think you will be very happy with where market rents are when you are ready to rent.

John

@Hamp Lee III We are will be keeping this property.  Our strategy is buy and hold.  Between the interest rate and earning potential on the property it wouldn't make sense to sell unless there was a really attractive investment (more units, higher cash flow or large equity gain).  While we are always looking for other properties, so far we haven't found anything worth moving for.

John

@Ran Iarovich My experience you will need to market to a lot of potential sellers to find those that might be interested in doing a seller financed or a sub-to deal.  We have written few different offers on properties recently that included a seller financed option but at the end of the day the sellers were not interested in using seller financing.

Additionally, in WA State you need to make sure you don't do anything that could be considered "equity stripping" as that is a sure fire way to get into a mountain of trouble.

Best of luck,

John

@Allan Smith that’s awesome and amazing you are able to rehab a unit for $4k. I don’t think we ever achieved a cost per unit at that price. When you are rehabbing units do you keep it to just paint / lighting or do you also do flooring?

If you have any suggestions on ways to improve our process for turning our units, I would love to borrow from your best practices.

John

Quote from @Princella Griffie:

We are in the process of trying to get a squatter out of our property in Detroit. It’s one of the most stressful experiences ever! This is the last property we were trying to sell before someone created their own fake lease. Now we wait.

We wanted to do a 1041 with the proceeds from the Detroit property and buy in Texas where we live, but with these high rates, I’m not sure, but it seems the rates are only getting higher. Thinking maybe we rent in Detroit until rates go down or am I being crazy to keep my property in Detroit.

@Princella Griffie I am really sorry to hear you are having a similar issue with squatters in your property in MI.  If I can provide any advice it would be to make sure you have professional legal representation as you navigate the process of removing them.

As for your strategy of moving funds via 1031 exchange from this property to one in Texas, to me that does seem like a good idea.  Current interest rates are certainly higher than most would like but remember you always have the option to renegotiate the interest rate on your mortgage.  If you find a property in TX that you like and fits your long term plan, I would be inclined to make the trade. 

I know at the moment dealing with squatters is terrible but know you will get through this. Ultimately, this will be a story about what you learned and the hardships you endured on your path to success.

John

Quote from @Greg M.:

Seattle should be a business school case study of what not to do.

2022 Seattle Office of Housing report gives an update on their 7 year goals. Exceeded goals by 31% supporting the creation of over 2,735 new affordable rental homes and the preservation of 530 existing rental homes. Cost of $290 million.

Create anti-landlord laws and during second half of 2021, 3050 rental properties containing over 9,700 housing units were removed from the rental market. 

The vacancy rate is going up, no doubt as landlords contemplate selling or wait for the right renter knowing they are screwed if they rent to the wrong person.

The city states it needs at least 30,000 more rental units just for low income people. That doesn't take into account the homeless. 

Imagine what they could accomplish with rental units if they had fair laws and promoted building...

Seattle seemed to pride itself on pushing anti-landlord legislation over the last few years.  Unfortunately, the results of these policies (decrease in available housing stock & increasing rents) speak for themselves.  The challenge is that elected leaders often ignore the facts that do not align with their agenda.  Everyone wants a simple answer and it's easy to blame landlords.

I am hopeful that more transparency around these "tough conversations" will allow us to come to the logical conclusions about how to actually increase the quantity and quality of housing in our communities.  I might be naive but I still believe we can actually fix things when we choose to acknowledge reality (what the data shows us) and implement solutions accordingly. :)

@Jeff S. It never feels like you are getting off easy but completely understand your point. I hope people will take away the need keep

more capital on hand. I view it as a necessary insurance policy. I agree with your assessment that lending (HELOC's or otherwise) are likely to become harder to access.