All Forum Posts by: Jonathan McKay

Hello, I'm looking at purchasing a 10 unit apartment in Spokane Washington, but it has three shared water-boilers for all of the units. In order to make this deal work, I would need to be able to charge back the hot-water costs to tenants. Does anybody have experience with RUBS in washington state? Is it allowed? What contract language have you used / RUBS company did you go with? 

Thank you all!

Wow, you're right. Mostly deals in surrounding towns, but seems worth keeping an eye on for my market at least. 

I want to set up a list of sources I should check every few days for multifamily listings to see if there are new listings on the market. I've found that Loopnet, individual commercial brokers, bigger pockets, and realtor all have different sets of listings. Are there other resources that people use for on-market deals? 

I'm currently looking for deals in Spokane and Cleveland, and here are the sources that I have. 

1. Commercial Real estate database (Spokane link)
2. Loopnet (Spokane Link)
3. Realtor (Spokane Link)(Cleveland Link)
4. Bigger Pockets (Spokane Link)

I know that off market deals are going to be more likely to yield profit, but I just want to get my searches set up for things as they come on the market. Any feedback appreciated! 

@David Clinton III I'd love to meet up! I'll send you a text tomorrow when it's a more reasonable hour.

Hello BP,

I'm an investor in the Spokane area but live in San Francisco. So far I've built a portfolio of 15 units in multifamily and I'm looking for more deals if I can find them. I'm going to be back in town for Bloomsday weekend, and I'm wondering if anybody would be interested meeting up? I'd love to share my experiences and would definitely be interested in hearing of any other experiences that people have!

-Jonathan

@Jay Hinrichs what do you find particularly attractive about east of the Cascades? Spokane WA is my home market, and while I'm looking to expand there, I also feel like the cap rates are too low to make that my only base so I'm actively looking to expand elsewhere. 

It looks to me like you have an incomplete picture of the expenses. You want to be able to get to an projected NOI that you trust, calculate the projected cap rate, and that can tell you whether this would be a good deal. $8700/year in insurance seems extraordinarily high to me, and based on the numbers you gave (along with a heap of assumptions I made) this deal seems like a pass.

@Marco G. you are correct to point out that the costs of a 1031 are minimal. When I say transaction costs, I mean costs of selling the building, which I peg at about 9% the value of the property. (Washington state has a ~2% excise tax). Never sell? That's tough to say, but in the time horizon that I can calculate (~10y), I don't think I would sell. 

But you're right -- let's talk in a few years. 

@Richard Shevak - thanks for the info! You're right that the straight depreciation looks a bit off. Maybe they were deducting additional land value? I'll find out. 

They gave estimated tax savings, and calculated an EOB based on full depreciation of the property and NPV benefit. They came up with $21,569 total NPV benefit over the life of the loan, but that is also based on 39% tax rate, which is a bit optimistic for me. 

@Marco G. because I do not expect to be capital constrained in the future. Based on how I see things playing out, the transaction costs make a 1031 less appealing than straight up purchasing additional units. 

I could be wrong though, ask me in 3-5 years. ;)