All Forum Posts by: Tim Johnson

@Lauren Sanders I feel your pain! The market is similar here in western WA. Were all your offers for multi-family units? 2-4 unit props in my market are way over-priced at present (from an investor's point of view) Everyone wants to house hack. Perhaps you could reconsider your strategy - don't give up on looking for a starter "value-add SFR" and move forward from there..... it's not as fast..... or cool sounding - but it works.

House hacking a duplex is a great plan. Trouble is, in my market, there are no readily available duplexes to purchase - that make sense price-wise. (This must be a favorite route for lots of folks right?) It might be different where you are.... but don't give up on finding a "value add" SFR as well and move forward from there.

@Caleb Smith If  the property manager was just being brought in to "manage" your properties - there's no need to offer equity. That would just be a normal expense in running your operation. Good luck in finding just that right partner!

Closing costs are made up primarily of lender fees.... plus the escrow side of things (escrow fees, recording fees, title insurance, etc.) You're right that it's sometimes tricky to isolate and hone in on what your exact closing costs will be. And yes, of course it's all different when you go with just cash.

One of the tools I love as an agent is the free app - Chicago Agent One. This comes from the Chicago Title & Escrow company. I like to use several of their calculators but in the case you mention - you could use the "Buyer" calculator, enter the correct information (address of property, county, sale price, financing, etc.), hit "compute" and it will provide the figure that you need to bring to closing. Finally, click on "fixed closing costs" and you get some very accurate data of what your costs will be. 

It's really designed more for buyers with loans, and sellers getting a very accurate net sheet - but with a few work arounds it can be helpful with understanding those closing costs.

(When I'm just running numbers quickly for myself for investment properties I feel good just going with 3% - that usually gives space for lender fees and escrow fees....)

The lead in old paint is only dangerous if ingested or breathed. Paint chips would have to be literally eaten (for example by babies or small children chewing on the wood), or breathed in (if cutting or grinding creates a kind of dust). In most cases, a new coat of paint - or at the very least, repainting areas that are presently chipping, is sufficient. Make sure your tenants receive the pamphlet about lead paint.

Hi Blake, congrats on wanting to get started. Your post looks familiar....like it might have been posted before?

Honestly, it's almost impossible to give a good response to you since we have so little information about your thoughts, goals, finances, etc. A specific question will always get a ton of quick responses. What kind of advice are you actually expecting or looking for?

On "learning what a good deal is...." you might want to check out the book - a classic - "Building Wealth - One House At  A Time" by John Schaub

On "funding deals without my own money..." I can say this: 1. you will ALWAYS need your own money in some fashion  2. NO ONE will give you - or loan you money so that "you can reach YOUR goals" unless they KNOW you, TRUST you, and also see value in it for THEM. It's got to be win-win. 

So to summarize: keep studying, save money and get to know a LOT of people in the REI world. Best wishes.

@Nithin George You'll probably want to leave your mortgage as it is - since at the beginning of 2021 when you purchased the home you most likely got a decent interest rate. And if you refinance for any reason, the interest rates are usually higher for investment properties.However, you WILL want to contact your insurance company and make sure that you change your policy from a primary home policy to a rental home policy.

Hi Andrew, congratulations to you and your partner on moving ahead. As I read your question, I have two quick impressions:

1. You are absolutely correct that we all need a "team" mentality. Most of us can't accomplish our goals completely on our own and will need the skills, talents, and insights of others. Many others.

2. A word of caution... unless you just have a ton of money and are hiring people for your team, you might want to consider the fact that most teams develop more slowly - over time - and more organically. As you move ahead (sometimes struggle along) with plans and work with a variety of folks - you will begin to find those who you work best with - they add to your plans, and you add to theirs. You find that they do good work.... and that you trust them, etc. 

Anyway, none of this is meant to discourage you. Yes, actively look for team members.....remembering that probably in the end, you won't just "assemble them to help with your goals", but instead you'll look around and realize the great team that's developed!

How is their present lease set up? Is it month-to-month? If so, there will be a proper way to give notice according to your local laws. Are they on a longer-term lease? If so, you will need to honor that lease and then inform them that you won't be renewing the least when it is up - again, following your local landlord-tenant laws. Eviction is a different process - it may be necessary - but only when tenants refuse to communicate or leave the property. Be sure to check with your local authorities and laws - the answer to these questions can be very area-specific.

The value that the assessor gives it has NOTHING to do with the present market value of the property. When the assessor said he wouldn't doubt that the seller would ask 300K for the property, why do you suppose that was? It was because he's aware of how fast the market is moving... and guesses (probably correctly) that that's where present market value may be.

I may have overstated things in my first sentence. But the fact is, each jurisdiction handles assessments for taxes differently. Most counties assess properties at or slightly below present market value. They will "on purpose" assess them lower than market value - because they don't want everyone complaining and asking for "re-evaluations". It's not as important for them to be "in sync" with the market perfectly. They will assess taxes in such a way as to reach their budget. So you'll find that the valuations on the county assessor's site will always lag behind the actual market value. In markets like we have now - where appreciation can sometimes be in the double digits - the gap is BIG - like you're describing - it sometimes takes a year or two for assessments to match market (this is true which ever direction the market is moving).  Also, be careful about your use of the words "appraisal" and "assessment" - two completely different things.