All Forum Posts by: Jake Alger

Hi Jim,

Welcome to BP!  This community is awesome and there's a ton of great information from people of all experience levels and strategies.  Read, learn and ask questions!  I'm happy to be a resource and help in any way I can.

What kind of rental investments interest you (single family, multi-family, apartments, etc)?

Hi @Dominique Duduman,

I like how you're looking at RE.  It's not a "get rich quick" type industry, but something to build a business within.  This is something I've done and helped people do and it's garnered the best results.  The key is sticking with it!

He doesn't need to do a 1031 exchange.  He's still under the Taxpayer Relief Act exemption provided he sells and closes within the next 1.5 years.  A 1031 exchange only applies to properties classified purely as investments.  

That said, my disclosure is that I'm not a tax expert and you should seek the advice of such :)

Edit: Just saw your post was from a few days ago, didn't see everyone's responses after that until now.

Let's keep in mind that not every real estate agent is "investor friendly."  Only some actually spend time working with investors, understand the terminology and know the market in a more in-depth way than appealing to emotions.  As @Russell Brazil eluded to, for the most part, investors are going to locate the deal that appeals to them most almost always by themselves.  They know the criteria they're looking for and that usually comes along with some market research for where they're looking.  Heck, it's even that way for the "retail buyers" since everyone has access to the internet all the time.

Sure, for some of us who are investor friendly, we may have off market opportunities available from time to time, but not every MLS or state (depending on who you're responsible to), allow for "pocket listings." The hard and fast truth is that investors tend to be harder to work with, which is a fun challenge in my opinion. However, the deals still have to get through to put food on the table.

I highly take exception to the "RE agents are just shortcut people that try to make huge money with the least amount of work" section.  I can assure you that for the good agents who stay in this business, we are far more focused on providing a great service, helping navigate perhaps the largest purchase/sale someone will ever make in their life, acting as a fiduciary to our clients best interest, all while creating a long lasting relationship that will hopefully trickle down through the generations to help us sustain our business.  For the others who match your assumption, they get weeded out within the first few years when they find out this business is far more difficult than expected.

In the case of a normal listing where it’s based on percentages, yes, our commissions fluctuate. Unless stated otherwise, the commissions are a function of the sold price. 

Hi @Hon Ching Lai,

Those areas are not limited by the same rules as Seattle city limits.  The BURRRR strategy works just fine anywhere, they key is to find a property where the numbers work.  The rental portion of the BURRRR strategy is what I'd be cautious with within Seattle city limits.

Hi @Cory B.,

The excise tax is a base rate (state base) of 1.28%.  Each county then adds on to that.  King County's current excise tax is an additional 0.5% -- therefore the total is 1.78%.  The 1.28% and 1.78% are NOT added together.  My last post was a little unclear and I apologize for that.  Definitely see where it could have gotten confusing.

Hopefully this makes a little more sense? :)

Hi @Hon Ching Lai,

It definitely doesn't hurt to pull a HELOC on the $800k property. You wouldn't be incurring any charges or interest unless you draw from the actual line of credit. Thus, it's there if you need it, but doesn't have to be touched.

Looking for a small multi-family that cash flows will be hard in the Seattle area.  Aside from that, within Seattle city limits you need to be aware of the rental laws.  If you look further north and south than Seattle itself, you can find some properties.  What your actual criteria and strategy is would dictate the type of property, condition of the property and location. 

Hi @Cory B.,

Those refi and HELOC rates seem high to me as well - just as @Michael Haas mentioned.  Definitely shop lenders if you plan on utilizing one of those options.

One thing I would note is that excise tax is 1.78% in King County.  State rate is as mentioned above, but every county has an added rate on top of that.  Figure 8-9% total for selling costs (excise tax + commissions + title insurance + escrow) from the sales price of the home in order to arrive at your tax liability for capital gains.  Obviously you're already aware of the limit for the exemption :)

Let me know if you have any questions!

Hi @Parker Eberhard,

Let me first disclose that I’m not a licensed investment advisor.

Second, I’m not sure I’d be comfortable placing large amounts of cash in the stock market right now. Not saying to have no exposure as diversification is important, but perhaps limited exposure would be the safe way to play it right now coupled with another form of investment. The market has been on a huge run and who knows what’s going to happen in the near future.

Have you thought about picking up a rental property or perhaps investing in a RE Syndicate?