All Forum Posts by: Steve Milford

My focus is much more narrow, but I just look at it all from a % basis. If after considering the exit strategy, if the buying and holding costs make sense according to my payout goal, then I am game. The biggest factor or problem that I see is that sometimes people don't set their sights high enough, they get lost in the details worrying more about $$$ versus %, or they shoot for an industry versus the product. 

When I first came to BP, I originally thought $100 per door rental was pretty good, because that is all that most talked about. Now though, I wouldn't touch $100 per door with a 100-foot pole. The dollar amount of the gain is not the qualifier, it is the % gain that I care about. Sometimes that is real estate, and sometimes it is the broken appliance I pick up for free or low cost to rehab, and end up making the same %, or more. I.e. Recently I picked up a used dirty range, and "rehabbed it". All in - with time and parts I spent $50, but sold it for $150.  

Savvy investors, in my opinion, see opportunity in the products where the return is greatest that they are comfortable with. We live in a throwaway society, just clean it, fix it and resell it - one of the easiest things to do in the world.

Steve

I just suggest, take the time to do it right or pay someone else to do it right. Not all PM's are bad. Or you can easily manage your own by using a detailed contract and following the local tenant law. As everyone says, cut corners, and it will bite you. And you have to be ok with delivering bad news and not be afraid of conflict - because it can spring up at any time.

All that really matters is, with what do you want to do with the money, is the cost worth it? The rate is really irrelevant except for the long term. I.e. If I finance rehab material costs through HD or through my hard money lender, they are about equal as the financing costs because the line of credit is only open a short time. So....

If you just put it in the bank, is it worth paying an extra $833 per month, for that right?

Can you find an investment that will cover that $833 cost?

If you buy another property with that as down like you suggest, does the $833 plus additional cost of a new mortgage get paid for with the rent you would receive?

Whether or not the "money is dead" as equity or sitting in the bank, if it isn't earning a higher return versus what it is costing you then it isn't helping you. Or vice versa, if you can make it earn a higher return elsewhere, take advantage of it.

If I was you, I would only take money out to either give me a cushion (if I didn't have one already) and or if I could leverage it elsewhere to make more money. 

Steve

There are lots of us Realtor Investor types lol. Be aware, Vancouver, WA and Port Angeles, WA are pretty far apart.

Easy! 

If you think you will kick yourself 1 year from now for not buying it, then it was a good buy. Whatever you get for the rent, will help you pay for the mortgage. I would recommend you live in the half you want to renovate, like you suggested. When the other tenants move out, then rent your side for more and go live on the other side and renovate. Then when you build enough down through savings or refi, do the same thing again.

In the City of Portland, the tenant rules are pretty tight, so you need to be aware of them prior to thinking it is just a simple matter of "I'll just kick out the tenant and rehab the whole thing." It is just a plain ole mess with a bunch of hidden fees pretty much all in favor of the tenant.

Only you will know if it makes sense based on what you have to pay in mortgage costs plus your rehab costs.

I wouldn't be surprised if not similar. The primary varying factor is going to be the land cost.

That's a great success! Keeps me motivated to find a VR at the beach.

My recommendation is that you contact all that have looked although have not pursued, ask them 1 quality they liked and 1 quality they dislike. Without that data, it is just guessing. Most will give you feedback that is not the most helpful, or won't give you any. Though some will offer hints to remedy.

I would look for defects and "admit" them in your marketing. I.e. Look at the neighborhood, street, etc, and do the same inside. You can have all the most beautiful features, although if one is not expecting a lot of traffic and finds it once they arrive, that the home is on a street with a dotted yellow line down it, that is a problem. One way I use, for example, is to take a picture of the exterior from across the street, so people can see that it is on a busier road. You mentioned the small bedroom, so put that in your marketing, "fits twin bed" etc.

And then maybe expand advertising.

I don't see people selling unless they are a landlord that has taken it in the backside, someone is moving out of the area, or inherited houses, etc. With appreciation so high, it is going to keep the supply lower, among the other factors of low rates and normal high demand. If I was thinking of selling, I would just find a way, any way, to hold longer. 

@Steve Kim

It's your money, take what the Seller says with a grain of salt. With Seller quoting why you should buy with $/sqr ft. that's the salesperson in them. If you think its a good deal based on your numbers, then buy it. Otherwise don't.