All Forum Posts by: Tyler Blackwell

Congratulations! The scale of the larger multi-family projects still leaves me a bit breathless!

$1M was a big goal of mine as well for a long time. After all, if you start at $0, it doesn't matter if it's 1950 or today, it's still a big number! So congrats on the milestone. It's certainly something to celebrate, since only 1 in 10 households are millionaire households. Top 10% isn't something to sneeze at! Of course, if you zoom out globally you're a 1%'er without question. So perspective is important.

HOWEVER, what I have found is that unless you're very frugal, $1M still doesn't guarantee you financial freedom in the US or the ability to spend like Gatsby. But it's a good starting point for further growth. The 4% safe withdrawal rate, assuming it's all invested in the market, would provide $40k a year. I say if you're making 4% you're not trying hard enough, but that's what the stock market folks think is safe. But let's play their game. If you have $3M then you can retire with $120k. Starting to get there. For us real estate investors, if that return is say, 8%, then we're at $240k--starting to get good! 

Everyone likes to tell their story, right? Nice idea for the thread...

We were already in an SFR that we liked, but my wife found this property on 4 acres in the middle of the Olympia metro area. I went to check it out with great skepticism. It had a barn on it so my wife thought it was charming. I didn't. We bought it.

It was $290k. It needed lots of work, but good bones. The main house is about 2,800 sq ft, including the 600 sq ft apartment in the basement (with separate driveway, carport, etc). We also have a 400sq ft cottage, and since it was once a larger property before it was divided, it has a 7,000 sq ft covered horse arena, which is a huge boon so close to the city.

Long story short, we run AirBnB out of the basement an on average gross about $1,600/mo. The cottage is rented for $300 (we could increase this by 50% easily but it's not very nice, and we like the guy. He only uses it for the day and once he retires we'll turn it into a garage). The horse arena rents for $900/mo. So the total is around $2,800/mo in income, but it varies depending on the AirBnB. We put in about $80k to remodel OUR portion of the house, but even with the improvements our mortage (incl. tax/ins) is $2,500, so we live in our large, remodeled house on acreage for free :) The property is worth about $550k now and will only increase with it's proximity to town. It's looking like very soon the property will be zoned commercial (nothing I had anything to do with) so that's interesting too. 

What kind of LTV are banks looking for for a loan like this? 70%, 80%? Let's say for a loan aroung $1M?

Hey there @Curtis Bidwell, thanks for the thread. Sadly, I've been pretty complacent with these new bills. I can see how some of the laws currently in effect in Washington state can at times be unfair to tenants, especially in recent years as investors are repositioning assets to maximize rents and values. In light of that, some legislative changes to even the field a bit would be fair. HOWEVER, some of the proposed changes, and you've highlighted the most egregious, are not fair. They're anti-landlord! If you send me a letter, I'd gladly sign on and communicate your thoughts and mine to my legislators.

Thanks!

@John K. I'd be curious to hear the types of things you're outsourcing to a VA. I've considered hiring a local assistant to do things that crowd my days, like drycleaning, laundry, sending letters, paying bills, other errands, etc. So it would be good to hear what I'm missing if I'm going to implement.

@Trey Knight My wife was on board from the beginning (hallelujah!) I had always talked about wanting to do it, and actually before we were married I bought a condo that had instant equity at purchase and cash-flowed from the gate. Also, my dad invested in real estate and business all his life, maybe had a W-2 job in his late teens, and his estate is worth millions. So she saw all this converging. She's also smart ;) 

Wow, what a great thread--awesome question and even better advice. But you guys waking up at 4:30 to hit the gym—you're beasts!

I've experienced the same quandary you have, @Trey Knight, both my wife and I work, have 2 small (needy) children, volunteer our time on committees and community, and own 27 units, actively managing 23 of them!! We grew a lot last year and we're feeling a bit of growing pains associated with that. There are long term fixes we need to put in place while we're doubling our time with W-2 jobs AND investing heavily, but ultimately our plan will likely end in very early retirement to focus on investing. But in the mean time it feels sometimes like we're playing a protracted game of whack-a-mole, putting out fires one after the other. And it's not fun turning down your friends' invitations; I know for me it makes me feel not so very friendly. 

The silver lining is knowing that these pinch points can be springboards for further growth if you frame them correctly and act on them appropriately. That and knowing that however difficult it is, everything is temporary! and I WILL figure it out. I've learned a lot about my strengths and weaknesses in these times.

So, I can't offer a whole lot of advice because I'm where you are, but I'll offer this as a commiseration :)

I can vouch for TJ Guyer. 

Glad to know you, Blade! The Olympia market is really fun and still has room to grow (with respect to other larger Puget Sound communities). Thurston county is predicted to grow by 100k residents in the next 20 years--that's 40%! Where are they all going to live? I'm bullish on the long-term market here and I'm scooping up houses and multis, too. Go get 'em!

@Omar Khan Why is the personal balance sheet an impediment? Are there net worth requirements for these loans? If so, what are they (typically?) I've heard that the loan can be no larger than your net worth, but that's completely unverified...

Thanks!