All Forum Posts by: Tyler Blackwell

Hi @Wendy Carpenter, I personally think it's an area that's ripe for appreciation, and actually has been seeing it's share of the Puget Sound appreciation streak. The tenant pool isn't what Olympia has to offer, but is MUCH better than Grays Harbor. We snagged a 4-plex in late 2016 for the low 200s in Centralia, but low inventory and pressure from up north has driven prices up, especially for multiplexes. What's on the market right now doesn't even make sense to me--a couple duplexes are on the market for what they might sell for in Olympia!! Don't get me started on Olympia either: just months ago you could buy a duplex in the low 200s (my friend bought 4 duplexes earlier this year in the 215k-225k range), but now everything is at least 20% higher. Anyway, I'm bullish on the Centralia market so long as you can find a deal. I know there is a major fixer on Pearl Street but I don't know the extent of the work--might be a good buy? 

@David Sweeney Congrats on the 24-plex! 

We bought a 4-plex about a year ago and we went with TJ Guyer who's based there in Centralia/Chehalis. They get good reviews on google, and so far I've been pretty satisfied with their management. 

Where did you find the deal? MLS?

@Jake DeAtley, you're right--this is the best deal that has been on the market in months. A few months ago, following the passing of the late Washington Landlord Association president, a lot of multis hit the market at a relative bargain (duplexes for $205-215k, 5plex for 400k), but since then prices have just gone up and inventory is pitiful. I love that this has 3 acres with it so close to town!!

In terms of value in this market, it's all there. You're hitting the 1% rule with a few fixes and that's getting harder to do in Olympia and Thurston County. I don't think we've hit the peak of our appreciation and rent increase trends quite yet. 

Definitely good information from the other posters. If this is your first deal, budget for all the things your BP colleagues have mentioned, but be reasonable. Some people think you need 5% for CAPEX, others think 15%, so find a number you think is solid and go with it. At this point your vacancy can be 0%, but maybe in a couple years the market will stop sizzling. I think this deal pencils either way, but just keep in mind that these 4 units aren't all under 1 roof, and there are 3 buildings to maintain (plus the carport!)

In terms of interest rate, go with 5%. I just got two quotes for my last investment refi and they were between 4.875 and 5.125.

Best of luck with the deal!

I've used Brandy at Guild Mortgage for a few of my deals. She's easy to work with and gets things done!

@Jake DeAtley I can echo what @Curtis Bidwell has remarked about increases in rents. There isn't a ton on the market in terms of multifamily properties, but when I see their incomes I see opportunity. My buddy is closing on a 5-plex this week, and ALL the units are going to increase. I just turned around a 3/2 in Lacey that was rented for $1460 just 6 months ago. I advertised it for $1,550 but with so much interest I rented it last month for $1,600. So, while I don't think the rise in rents will last forever, it's definitely a detail to consider when evaluating the properties. Look at Craigslist and Zillow to see what the market is like RIGHT NOW, not what others are renting theirs out for. 

I look to buy 1% deals as well, I know others look for 2%, which makes more sense when the property purchase is <$50k and the cash flows are smaller. Just a year ago Shelton and Centralia had lots of properties at 1% and higher, but kind of tricky to find those now--the market is exploding. I think you're safe buying something in the 0.9% range since we're still swinging up, but that said, be careful about timing the market and expecting appreciation/increased rents. 

Best of luck!

I think you're ok, @Scot Sorenson. We did the same thing on our first property. We put it on a 15-year note with no intention of leaving, but then did shortly after. Because it was freshly remodeled like yours, there wasn't much maintenance to be done (though there is always some!), and no CAPEX items to consider. It's the tenant turnover that's a tricky one for you, since it does demolish the cash flow. I was OK with not making a killing on my first because I have a solid W2 job that can cover anything my rents don't. I've never had to do that in the years that I've owned it. Once you own it free and clear (in half the time as usual!), you can make up for lost time on the maintenance/CAPEX budget. You did fine.

We bought our first home with the intention that it would be a long-term rental, and it is. Then, we bought a longer-term home, which we're continuing to live in for a while. Looking back, I wish we would have purchased more houses using favorable financing as a personal residence and moving every year. Or doing it with duplexes/quads. Now everything has to be 20-25% down (or BRRRR to get it for low or no money). At this point, there is no convincing my family to downsize!! On the bright side, that first house is a fantastic rental that has seen huge increases in rent and equity. Just wish we had that 3-4x!

@Simon Panosh, how did you find the triplex? Are you doing mailers or is this an MLS buy? Things are getting pretty pricey around here, but I guess everything is a sweet deal compared to the Seattle multi market, where a 3 CAP is IMPRESSIVE!!

I have a fourplex in Centralia and TJ Guyer is great. They're based in Centralia/Chehalis, but I think they help with management in Olympia. If you can't find anyone closer (or even if you can) I'd probably check them out. Otherwise, I'll pay attention to this thread and listen for other recommendations. 

I agree with @Deanna McCormick and @Chuy Gonzalez that the correct amount is 0, especially if it's a hot market. If you're doing everything and you have ample renters coming your way, why would you need to consider their agent. However, I'd probably make some concessions (20-40%?) if it was a dry rental market and I wasn't getting good leads.