All Forum Posts by: Julian Sibley

@Jeremy England There's a couple HML in my area that will lend at auction. A couple of them have reps at the courthouse every week. Most common model I've seen is they will charge an extra point or two if you need the money same day (i.e. at the auction)

@Kari D. Washington state uses the International Residential Code for defining bedroom requirements. 

Generally speaking your bedroom needs to have at least 70 square feet of floor space (if more than one occupant in the bedroom need a minimum 50 sq. ft. per occupant), ceiling needs to be at least 7 feet tall, can't measure less than 7 feet in any horizontal direction, needs a heat source, a light source, an emergency/rescue opening, its own door (can't access it through another bedroom), and many people will say it needs a closet (the IRC doesn't have this requirement, but many appraisers use it as a bedroom requirement).

If you want to read through the code yourself, I've copied it below:

IRC- SECTION R202 DEFINITIONS

HABITABLE SPACE. A space in a building for living, sleeping, eating or cooking. Bathrooms, toilet rooms, closets, halls, storage or utility spaces and similar areas are not considered habitable spaces.

Habitable space requirements

Ceiling height-Requirements

R305.1 Minimum height.

Habitable space, hallways, bathrooms, toilet rooms, laundry rooms and portions of basements containing these spaces shall have a ceiling height of not less than 7 feet (2134 mm).

Exceptions:

1.For rooms with sloped ceilings, at least 50 percent of the required floor area of the room must have a ceiling height of at least 7 feet (2134 mm) and no portion of the required floor area may have a ceiling height of less than 5 feet (1524 mm).

R304.4 Height effect on room area.

Portions of a room with a sloping ceiling measuring less than 5 feet (1524 mm) or a furred ceiling measuring less than 7 feet (2134 mm) from the finished floor to the finished ceiling shall not be considered as contributing to the minimum required habitable area for that room.

Floor space- Requirements

R304.1 Minimum area.

Every dwelling unit shall have at least one habitable room that shall have not less than 120 square feet (11 m2) of gross floor area.

R304.2 Other rooms. (which would include a bedroom/sleeping room)

Other habitable rooms shall have a floor area of not less than 70 square feet (6.5 m2).

R304.3 Minimum dimensions.

Habitable rooms shall not be less than 7 feet (2134 mm) in any horizontal dimension.

Exception: Kitchens.

Glazing and ventilation- Requirements

R303.1 Habitable rooms.

All habitable rooms shall have an aggregate glazing area of not less than 8 percent of the floor area of such rooms. Natural ventilation shall be through windows, doors, louvers or other approved openings to the outdoor air. Such openings shall be provided with ready access or shall otherwise be readily controllable by the building occupants. The minimum openable area to the outdoors shall be 4 percent of the floor area being ventilated.

Heat Source- Requirements

R303.9 Required heating.

When the winter design temperature in Table R301.2(1) is below 60°F (16°C), every dwelling unit shall be provided with heating facilities capable of maintaining a minimum room temperature of 68°F (20°C) at a point 3 feet (914 mm) above the floor and 2 feet (610 mm) from exterior walls in all habitable rooms at the design temperature. The installation of one or more portable space heaters shall not be used to achieve compliance with this section.

Emergency Egress requirements-

R310.1 Emergency escape and rescue required.

Basements, habitable attics and every sleeping room shall have at least one operable emergency escape and rescue opening. Where basements contain one or more sleeping rooms, emergency egress and rescue openings shall be required in each sleeping room. Where emergency escape and rescue openings are provided they shall have a sill height of not more than 44 inches (1118 mm) measured from the finished floor to the bottom of the clear opening. Where a door opening having a threshold below the adjacent ground elevation serves as an emergency escape and rescue opening and is provided with a bulkhead enclosure, the bulkhead enclosure shall comply with Section R310.3. The net clear opening dimensions required by this section shall be obtained by the normal operation of the emergency escape and rescue opening from the inside. Emergency escape and rescue openings with a finished sill height below the adjacent ground elevation shall be provided with a window well in accordance with Section R310.2. Emergency escape and rescue openings shall open directly into a public way, or to a yard or court that opens to a public way.

Garages cannot open into bedroom/sleeping rooms requirement

R302.5.1 Opening protection.

Openings from a private garage directly into a room used for sleeping purposes shall not be permitted. Other openings between the garage and residence shall be equipped with solid wood doors not less than 13/8 inches (35 mm) in thickness, solid or honeycomb-core steel doors not less than 13/8 inches (35 mm) thick, or 20-minute fire-rated doors, equipped with a self-closing device.

R310.4 Bars, grilles, covers and screens.

Bars, grilles, covers, screens or similar devices are permitted to be placed over emergency escape and rescue openings, bulkhead enclosures, or window wells that serve such openings, provided the minimum net clear opening size complies with Sections R310.1.1 to R310.1.3, and such devices shall be releasable or removable from the inside without the use of a key, tool, special knowledge or force greater than that which is required for normal operation of the escape and rescue opening.

R314.3 Location.

Smoke alarms shall be installed in the following locations:

1.In each sleeping room.

2.Outside each separate sleeping area in the immediate vicinity of the bedrooms.

R315.1 Carbon monoxide alarms.

For new construction, an approved carbon monoxide alarm shall be installed outside of each separate sleeping area in the immediate vicinity of the bedrooms in dwelling units within which fuel-fired appliances are installed and in dwelling units that have attached garages.

Note: In Washington State CO alarms are required on all homes sold.

No egress thru other bedroom?Well this is a bit of an odd one. The IRC has no restrictions in a sense but there are other code bodies that do. The International Property Management Code (IPMC) has some requirements. So the IRC regulates how the home is to be built then the IPMC regulates how the home is to be maintained. Oddly these two codes do not perfectly overlap.

From the 2012 IPMC which is adopted in some areas. Scope-

The International Property Maintenance Code (IPMC) is a model code that regulates the minimum maintenance requirements for existing buildings.

The IPMC is a maintenance document intended to establish minimum maintenance standards for basic equipment, light, ventilation, heating, sanitation and fire safety. Responsibility is fixed among owners, operators and occupants for code compliance. The IPMC provides for the regulation and safe use of existing structures in the interest of the social and economic welfare of the community.

2012 IPMC-404.4 Bedroom and living room requirements.

Every bedroom and living room shall comply with the requirements of Sections 404.4.1 through 404.4.5.

404.4.1 Room area.

Every living room shall contain at least 120 square feet (11.2 m2) and every bedroom shall contain a minimum of 70 square feet (6.5 m2) and every bedroom occupied by more than one person shall contain a minimum of 50 square feet (4.6 m2) of floor area for each occupant thereof.

404.4.2 Access from bedrooms.

Bedrooms shall not constitute the only means of access to other bedrooms or habitable spaces and shall not serve as the only means of egress from other habitable spaces.

Exception: Units that contain fewer than two bedrooms.

404.4.3 Water closet accessibility.

Every bedroom shall have access to at least one water closet and one lavatory without passing through another bedroom. Every bedroom in a dwelling unit shall have access to at least one water closet and lavatory located in the same story as the bedroom or an adjacent story.

404.4.4 Prohibited occupancy.

Kitchens and non-habitable spaces shall not be used for sleeping purposes.

404.4.5 Other requirements.

Bedrooms shall comply with the applicable provisions of this code including, but not limited to, the light, ventilation, room area, ceiling height and room width requirements of this chapter; the plumbing facilities and water-heating facilities requirements of Chapter 5; the heating facilities and electrical receptacle requirements of Chapter 6; and the smoke detector and emergency escape requirements of Chapter 7.

702.4 Emergency escape openings.

Required emergency escape openings shall be maintained in accordance with the code in effect at the time of construction, and the following. Required emergency escape and rescue openings shall be operational from the inside of the room without the use of keys or tools. Bars, grilles, grates or similar devices are permitted to be placed over emergency escape and rescue openings provided the minimum net clear opening size complies with the code that was in effect at the time of construction and such devices shall be releasable or removable from the inside without the use of a key, tool or force greater than that which is required for normal operation of the escape and rescue opening.

From the 2014 NEC-

210.52(A) General Provisions. (receptacles)

In every kitchen, family room, dining room, living room, parlor, library, den, sunroom, bedroom, recreation room, or similar room or area of dwelling units, receptacle outlets shall be installed in accordance with the general provisions specified in 210.52(A)(1) through (A)(4).

From the NEC Handbook-

“Receptacle outlets are to be installed so that an appliance or lamp with an attached flexible cord may be placed anywhere in the room near a wall and be within 6 feet of a receptacle, minimizing the need for occupants to use extension cords. The receptacle layout may be designed for intended utilization equipment or practical room use. For example, receptacles in a family room that are intended to serve home entertainment equipment or home office equipment may be placed in corners, may be grouped, or may be placed in a convenient location. Receptacles intended for window-type holiday lighting may be placed under windows.”Even if more receptacles than the minimum required are installed in a room, no point in any wall space is permitted to be more than 6 feet from a receptacle.”

In addition in more modern homes AFCI protection is required for bedroom receptacles/outletsand receptacles need to be tamper resistant (210.12 Arc-Fault Circuit-Interrupter Protection & 406.12 Tamper-Resistant Receptacles).

Lighting Required NEC 210.7 (A)(1)

210.70 Lighting Outlets Required

(A) Dwelling Units.

In dwelling units, lighting outlets shall be installed in accordance with 210.70(A)(1), (A)(2), and (A)(3).

(1) Habitable Rooms.

At least one wall switch–controlled lighting outlet shall be installed in every habitable room and bathroom.

Exception No. 1: In other than kitchens and bathrooms, one or more receptacles controlled by a wall switch shall be permitted in lieu of lighting outlets.

Exception No. 2: Lighting outlets shall be permitted to be controlled by occupancy sensors that are (1) in addition to wall switches or (2) located at a customary wall switch location and equipped with a manual override that will allow the sensor to function as a wall switch.

@Kendal Keyes, What @Brian Pulaski mentioned is spot on. Not to mention you could run into issues once you try to move out and rent both units, or sell the property. Sounds like you need to take a trip down to the county planning department. Dig around on the planning/development site before so that you have an idea of what permits you think you will need. 

The planning department is usually pretty helpful as long as they can tell you've done your homework prior to asking them for help.

@Riley Brown what they're referring to is the fact that if you get a W2 job out of college, either salary or hourly, you can use that income right away to qualify for a loan. If you go into real estate you're going to need at least 12 months history of receiving commission before we can start using it, other lenders/investors will sometimes make you wait 24 months before you can use it. SO by having a W2 job to start you can get your foot in the door earlier compared to being a RE agent and having a commission job. My personal belief is that your RE license only becomes necessary if you're doing multiple deals per year, otherwise just find a good agent. Again, that's my $0.02 so if you disagree no worries.

Seattle is a tough market, I'd recommend you look South towards Tacoma or North towards Everett to make the numbers work. Your target market will probably depend on where you land a job after school. Start working on building credit now, find a good job after school, and attend local meetups so you can meet other investors and build out a team. For your first place you could look into a house hack. You can get into a 1-4 unit for low down using a FHA loan, BRRRR it (Buy, rehab, rent, refinance, repeat) and potentially can make more than one purchase before you could even start to look into financing if you were a RE agent (or any other commission job). Think of your long term goal, and then back-track from there to put the steps in place. This whole thing becomes much easier if you begin with the end in mind, then the only difficult part is finding deals that meet your criteria. Good luck! If you end up in the Snohomish County area let me know, there's a couple meetups in the area that would benefit you if you're planning on investing in the Everett/surrounding areas.

@Nathaniel Anderson There's a meetup this Monday 4/23 @ 7pm at the Bob's burgers in Marysville. Would be an easy place to stop by on your way home from Mukilteo and meet some local investors. Welcome to BP! Hope to see you around.

@Matthew Hime You can also try First Financial NW Bank, last I remember they were offering 50LTV on investment HELOC's

@Karl Krauskopf My wife and I recently finished our first deal, it's rented but we manage it ourselves. So I haven't interviewed any of the local PM's. Will be moving in a rental until we find our next primary. We did all of the rehab ourselves (it didn't need anything major) but my uncle is a GC so we use his subs for any work that we aren't comfortable doing/don't have the time for.

If you have connections in FL and TX that can be your boots on the ground that might be a good strategy for you as well. The hard part about converting your primary to a rental is that moving SUCKS, our next primary will likely be something we stay in and instead will focus on investment purchases (larger down payment). If you decide you are going to convert your primary to a rental you should consider how large your lot is. I don't remember the requirements exactly but I believe if your lot is in the 14,000 to 15,000 sq ft. range in Shoreline city limits you can subdivide into 2 parcels. 

@Karl Krauskopf Welcome! My brother has a home in Shoreline as well, he's right off 155th. Your situation might be very similar to his, depending on how long ago you purchased.

Your options ideally are to go North or South. If you look North, Everett can be a good area (ideally you want to avoid NE Everett). There is also some great anticipated growth in the Marysville/Arlington area near the MIC (Manufacturing Industrial Center), once Boeing/Paine Field opens up commercial flights in September 2018.

If you go South you will want to look in areas like Tacoma & Pierce County. (I'm not any help there, but the keywords might bring some people in)

Market identification/analysis is going to depend completely on what your end-goal is. Are you going to build cash flow through single family, or multi-units? Commercial? I'm old school and like to walk through neighborhoods to get a feel for them. If you don't want to take the trip, you can partner with someone who specializes in that area and needs something you can offer (usually capital/money or offering to do something for free that they hate doing and you have experience in). Currently I'm looking for rentals, but long-term my plan is to sell them. So ideally I'm looking for areas that will be easy to fix/rent, but that in the future will be desirable for a family/first-time homebuyer to purchase. (Think of it like trying to find a class C home that is in a class B neighborhood, or in a C neighborhood that will likely become a class B as Snohomish County continues to grow)

What is the plan for your current home? Scaling will require a clearly defined entry and exit strategy, and some good sources for capital. Depending on your time-horizon for quitting your job, you could probably acquire a good portfolio in 5-10 years by leveraging, and then start to focus on paying down the debts as you phase out of your corporate role.

(There are alternatives, but a strong source of income that is independent of your real estate portfolio will help you scale in the early stages)

Pricing and cost-basing will depend, everyone has their own target profit margins, for you first BRRRR you will be doing good if after the refinance you can recover your capital + desired profits. (Cash-out refinances on investment properties are lower LTV, meaning if you can't add enough value to the property through your rehab it is difficult to pull out your investment + profit. Most people are content with being able to pull out their capital, assuming the rehab that was done increases the rents for the property, because it gives them their down payment on the next.) If you truly intend on buying and holding forever, the cost basis is not much of an issue. If you need to be able to sell the properties for your end-goal you will want to look in to 1031 exchanges to delay the taxes on your gains.

There are a couple meetups in your area, if you have the time to attend a few you will meet local investors and have an opportunity to ask them about their active deals and what they are actively looking for/finding in this market. Find someone with experience in the areas that match your strategy/desired outcome. You don't need to re-invent the wheel, just try to learn from their mistakes.

Good luck! Hope to see you around.

@Liz Cole the bigger pockets podcasts are a great resource. You will likely get some more traffic in this thread if you mention what area it is you are interested in.

If you want to do flips first thing you need to do is figure out your financing (traditional, hard money, private money, etc.). Next you want to get a good agent (or become one) so you can tell them WHERE you will buy your properties and WHAT type of properties you want to buy (how many beds/baths, in the suburbs, on the back roads, split level, ranch style, how old, etc.).

Next you want to get very good at analyzing deals, try to avoid doing it quickly. Remember that profit is made in the purchase, not the sale. Generally speaking the most you will pay for a property should be "X" where:

"x" = sales price - fixed costs - profit - rehab costs

For your sales price: pull comps and do a market analysis to get an idea of what your after repair value will be (price you will sell the home for after all repairs).

fixed costs: This includes purchase costs, holding costs & selling costs (inspection fees, closing costs, lender fees, mortgage payments, property taxes, utilities, insurance, commissions, closing costs on the sale, home warranty, etc.).

Profit: How much is reasonable based on the amount of risk you are taking/ amount of time your capital will be invested?

Rehab costs: The goal here is to get in the ballpark (maybe 10-20% high/low). Once you have a couple deals under your belt it will get easier, but as long as you're in the ballpark you can get an accurate renovation estimate once the home is under contract & you get bids.

I'd recommend meeting local investors. There's a local meetup on the 4th Monday of every month in Marysville @ the Bob's burgers @ 7PM through the Cascadia Investors Alliance. You can pick their brains, hear what deals they're looking for/finding in this market and get recommendations for help w/ building out your team

@Mary N. If you haven't found any recommendations yet, send me a PM and I can provide you with contact info for my planner & CPA. Are you in WA state or still living in NV?