All Forum Posts by: Michael Haas

100% agree with @Nathan Gesner as well - it sounds like you have a property manager that is sloppy, inexperienced, or both. Your PM did not appear to vet the tenant well, which here in tenant friendly Seattle is the most important function of property management.

They should be presenting you with your options for resolving this. If they seem able to handle this situation I would wait until it is resolved, then fire them. If they seem unable to handle this situation fire them now and get another PM in there to do damage control and try to make you whole. 

I'll send you a DM with a property manager recommendation in case you decide to fire your current PM. Sounds like a tough situation, I'm sorry and hope that you're able to resolve it!

@Eric Yu welcome to BP man! Congrats on your success so far, and the big goals and dreams you have for the future. 

Happy to talk to you about the DADU play in Seattle- we're building 2 right now, one condoization-to-sell projection and one buy & hold. DADU's and ADU's are 50% of our investment strategy & Glamping, Airbnb, Tiny Houses, Yurts, and Unique Stays are the remaining 50%.

We push off market deals in both of those niches - I'll get you on our DADU list. Shooting you a DM now :)

@Francisco Lopez please do! Happy to grab a drink when you move up to WA. I'll shoot you a DM to share contact info.

@Francisco Lopez Airbnb in general, and Land Hacking in particular is a stupendous strategy in Seattle or the greater PNW. We've LandHacked 7 acres up on Stevens Pass and have the property decked out with a Yurt, Tiny House, Historic Schoolhouse, and more to come, rented on Airbnb. Current cashflow is good and as more units come online it'll get even better.

As others have mentioned, keep in mind the "2 of 5 rule" that allows you to cash in $250k in tax-free Capital gains ($500k total for a married couple). Unlike a 1031, which is Tax-Deferred, the "2 of 5 rule" is one of the few strategies that is Tax-Exempt! If the property isn't cashflow-ing much, or if out-of-state management isn't your thing, I'd sell it within 3 years of renting it to take advantage of this rule. If its cashflow-ing/appreciating really well, easy to manage, and meets your goals you can still pull much of your equity out through a cash-out refinance or HELOC. You're probably seeing a pattern lol - Taxes are most people's biggest single expense, so when you're developing your long term investing strategy make sure to focus energy on money moves that defer, eliminate, or don't trigger taxes!

Hit me up anytime to talk more about land hacking up here in the PNW. Sounds like you're off to a great start, now lock in your strategy & execute!

Thanks @Nicholas Coulter - When I bought my first HouseHack 10 years ago one of the hardest parts of it was figuring out what a good HouseHack looked like. Looking at example properties and spreadsheets of folks who have executed the strategy successfully can be really helpful to "train your eye" and get better at finding these deal. 

Hey @Alex Omo - first off, thanks for your service and sacrifice man, and congrats on the pre-approval! Its definitely possible under $400k, but you'll likely be outside of the city of Seattle, but still within easy commuting distance. Between Everett to the North and Tacoma to the South we've definitely had successful househacks around that price point. Rent-by-the-room will be easier to acheive than a two unit, rent by the unit "duplex" style househack, but even the duplex style could still be possible if you buy right and are willing ot put some sweat equity into the deal. Here's a list of links for HouseHacks we've closed recently around that price point to give you a better idea of the neighborhoods and styles of houses that work best for this strategy. All of these homes cashflowed with 0-5% down when fully rented:

1. 201 8th Street UNIT A/B, Sultan

2. 11005 Roseberg Avenue S, Seattle, WA 98168

3. 12209 2nd Avenue SW, Seattle

4. 12260 Des Moines Memorial Drive S, Burien

5. 15415 SE 179th Avenue, Monroe

6. 23109 25th Avenue S, Des Moines

Hope this helps - reach out to me over messages if you'd like to talk about it more, $400k isn't an easy price point to work in but with the right search criteria and team behind you, you can make it work! @Daniel Nobile is another HouseHacking military veteran that would be worth talking to, he's househacked under $400k with a VA loan in this market before as well.

I'll echo other's sentiment - unfortunately the PM business is somewhat of a commodity, with pretty fierce competition on rates. Sounds like you're nearly 50% above market norms here - there's no harm in aiming high and charging for your value but know that the rate will be a major factor in most investors decisions. One thing you didn't mention was other fees- are lease ups free at 12%? If they start comparing your rate to others make sure they're comparing your apples-to-apples with the flat fees as well. 

I can't speak to your buyer, just what I would do as the investor in this situation. If it was me I would replace your company, just based on rates, regardless of value provided - its just not worth the 50% premium for me even if your company is really really good, but other investors may have different priorities.

For background I'm in Seattle and pay 7% + a lease up fee (I think its $650)

You should be able to find average price-to-rent ratios for most of these neighborhoods with some paid tools + local know-how. In addition to our personal experience with our portfolio, we're using Rentometer, Mashvisor, and Neighboorhood Scout as our main paid data sources. Happy to shoot you those reports on any area you're interested in, just shoot me a message. Cheers!

3-5% a year on average over the last 5 years. This year we've had a lot of tenant turnover, and are re-renting a lot of units to new tenants for 15% more because of how the rental market has rebounded. We also didn't raise rents at all for 2 years because of Covid, so for us most of the big recent raises are us playing catchup for that lost time.

Hey Paul - definitely make sure that if you get into the "active" investing game (wholesaling, flipping, working as a Realtor) that you're also taking advantage of the "passive" investing game (HouseHacks, Short Term Rentals, Long Term Rentals, etc).

If you don't own your own home, I'd start there. Househacking is a great stepping stone to wealth, and you may even be able to source your Househack deal from your Wholesaling efforts.

On the wholesaling list my advice would be to build a strong buyer's list - a lot of wholesalers focus on the sellers, get the paper, then don't have anyone to sell it to. Investor Lift and other website can help with this (for a price :)) but nothing is a substitute for your own buyers list that like, know, and trust you.

We're nearby in South Seattle - hit me up anytime @Paul Roderick & good luck man!