All Forum Posts by: Julian Sibley

@Haley B. Washington is a great place to live! Although my opinion is slightly biased. Are you and your boyfriend intending on paying cash for your acquisition?

If not, my guess is that the location for your purchase will be greatly influenced by where you will be working.

For cities to start looking I'd say focus on Tacoma area and South, or on the Everett area and North. Marysville/Arlington could be a good area for you depending on how much growth they will receive from the commercial flights out of Paine Field in Everett and the new MIC on the Marysville/Arlington border. You'll be able to stretch your dollars much further if you are in Eastern WA such as Spokane or the tri-cities, but again I'm assuming you will be limited to wherever you intend on working. Building a real estate portfolio is much easier if you guys have W2 jobs while you are starting out.

Good luck investing, let us know how it goes!

@Zachery Russell I would recommend you keep a W2 job while you start building your RE portfolio. If you are trying to get cash flow you should look into getting a FHA loan and house hacking a small multi-unit property. The alternative would be to buy a house and rent the rooms out.

I don't think having your license is necessary unless you are doing multiple transactions per year. As far as education goes, there is plenty of information on the podcasts and forums to help you learn some of the ins and outs.

If you are switching jobs to commission or where you receive tips, bonuses, etc. You will need close to 2 years of receiving that income before they will average it into your DTI ratios. So keeping you current job, or switching to a higher paying job in the same line of work will be the best bet for purchasing a property this year. Revisit your personal budget and see if there are any areas you can improve to help you save faster. The rest is just forced savings. If your budget says you can comfortably save "X" each month, pay yourself first and treat it as a bill. That way you force yourself to live off of the remainder and you don't get to the end of the month and spend the money you were intending on saving.

@Cheyenne Mair Yes.

What exactly are you looking for?

There are several meetups that happen on the east side if you are looking to meet other investors in your area. You can go to the "network" tab up top and then "events" to search for your area. Another very common place to find networking events is on meetup.com.

It looks like in February there are two meetups, one in renton and one in lynnwood if you are willing to drive. As far as seeking advice, just ask your question on the forum and people will chime in.

Edit: The Cascadia Investors Alliance is meeting tonight (2/2) @ 7pm at the Wilde Rover in Kirkland. If you can't make it tonight, they meet on the 1st Friday of every month. I believe the events are hosted by @Troy Fisher

@Sachin H. I think you should listen to Chris' advice ^ and try to look at why their credit is bad. Also, are there any compensating factors?? Strong work history, co-applicant w/ a job, what did their previous landlords say, how much income do they make compared to your rental amount, etc.

We currently have some renters that were in a similar situation, but they have good income, and most of the derogatory credit was from the past (5+ years ago). They're some of the best renters we've had and always pay their rent on time. Life can be uncertain and not everyone is given the same opportunities, but if you put in your due diligence when screening them, a low credit score doesn't necessarily mean you will have to evict them. 

@Kyle M Miller Welcome! I won't be at the Cascadia meetup on Jan 22nd, but will hopefully see you in February!

When you start to meet with other local investors you will be able to get an idea for what kind of deals they are looking for in our local market (if any), and pick their brain on how they typically source those deals. There's also a WA REIA event coming up in Everett that you could look up.

I'm in the same boat as you as far as house hacking goes. My wife has no interest in sharing walls with tenants. My wife and I are currently considering converting our primary into a rental, and renting so that we can purchase our next home as a primary in the future.

You could also look into some private/hard money lenders if you are going to flip homes to raise capital. The interest rates are higher, but they will be able to help you acquire rehab properties that won't pass a traditional appraisal.

@Tiffany B Alexander Welcome! The podcasts & forums are a great place to start, as previously mentioned. There are also a couple meetups in the area that will be beneficial for you as you start to build out your team.

Once you start to get an idea of what your long-term goal is you will have a much easier time figuring out how to put the plan in place. Sort of the, "Start with the end in mind" mentality.

In addition to networking with other investors at local events (REIA, meetups, etc.) I'd recommend using the keyword alerts function here on BP, so that you can be notified of discussions that are either in your area, or are of interest to you (i.e. "Everett" or "House Hacking"). Does your mother-in-law have any real estate investing experience?? Sounds like you have a great start on building your team, since you are looking into getting your real estate license, and your husband is a contractor.

There's a monthly meetup in Marysville, WA through the cascadia investors alliance. It's typically the 4th Monday of every month @ 7PM, at the Bob's Burgers in Marysville. It's a very laid-back group of people who love to talk real estate, I'd recommend checking that out as well.

Good luck, hope to see you around!

@Jacob Cast What are the future plans for the home?? If your goal is to eventually convert it into a rental home and purchase a new primary residence, you could potentially use boarder income to help qualify for your next home purchase. So long as it is not more than 30% of your qualifying income. Meaning if your plan is to convert your current primary to a rental and purchase a new primary (for the sake of the favorable LTV/down payment terms) you could use the rent you are being paid to help you get into another 1-4 unit home w/ a 5% down payment (Through Freddie Mac).

The catch is you need to be able to document it. Meaning you need to be paid by checks or electronic deposits that you can document and show they are paying you their rent each month. You will also need to be able to show atleast 12 months of receiving their rent, but you won't be able to purchase another "primary residence" for another year anyway.

This might be completely irrelevant to your long-term goal, but just some food for thought to help you get into a multi-unit that you could house hack.

Good luck!

P.S. - Where is Arnold???

@Clinton Holmes Welcome! There are so many questions I'd like to ask, but I don't want to take away from yours.

1. Start looking at the local networking events. "local" is relative, any idea where you plan on moving? 30-90 Minutes will get you very far from Seattle, unless you are including traffic. If your focus is south, look into Tacoma and surrounding areas. If your focus is north, look into Everett and the surrounding areas. If you aren't planning on living in one of the units you could also look into Spokane, or other states, your dollars will go much further.

Cascadia Investors Alliance has several meetups around the Seattle area, and there are a couple REAPS and REIAS. Once you are in Seattle and have a chance to go to a couple events, you shouldn't have any issues finding investors that you connect with. You'll be able to talk about what type of deals they are looking for/finding, and share with them what type of partners & deals you are looking for. Some of the events are posted on BP, others you can find easily on meetup.com

2. The BP podcasts and forums are always a good place to start. Probably wouldn't hurt to set up keyword alerts for the areas you plan to move to/invest in so you can start joining in on the conversation before you move here. 

Random questions:

• How many properties are you selling and will you have enough capital when you move here to purchase a property outright?
• Do you have a job lined up in WA?

Good luck, hope to see you around.

-Julian

@Jeff Spacek Welcome! and thank you for your service! The forums & podcasts are always a great place for information. If you're looking to participate in a flip with someone it will be easiest if you can offer them some sort of value-add.

Figure out what you like doing/what you're good at and find a flipper who hates doing those things. If you can give them something of value (doing something they hate doing, for free) you are much more likely to find someone to partner with.

There are a couple local meetups, which will help you network with other people in the area. The Cascadia Investors Alliance has a north end meetup in Marysville at the Bob's Burgers. It's on the 4th Monday of every month @ 7:00PM

Good luck, hope to see you around!

@Christian Wathne Stephanie hit the nail on the head for you ^.

If you have owned your rentals for less than 2 years, you are calculating the income properly, i.e. gross rents - PITIA x .75. If you have owned them close to 2 years and claimed them on tax returns then your rental incomes will be based off of your tax returns, not the above mentioned calculation.

As far as the DTI limits, there are compensating factors that allow you to have an AUS approval with DTI ratios above 45%, cash reserves in your bank account, more than one wage earner on the loan, larger down payment, etc.

Most people stay below the DTI limits because the property they are acquiring will cashflow enough to cover the cost of the new debt (at gross rent - PITIA x .75). If the property currently has tenants use their lease, if it is vacant you can get a rent schedule with your appraisal and use the fair market rent in the area that is decided by your appraiser.

Talk to your lender and have them run numbers for you, if they can't get it approved you could always talk to a local portfolio lender in your area. If the home is in WA I can give you the info of my portfolio lender, otherwise if it is in CA I am of no help to you, unfortunately.