New Multi-Family Investor

[Joe A.]

Hi BP Investors! 

I spent the last few months reading the forums and learning from each one of you, so wanted to start off by saying THANK YOU! you helped me land my first deal.

So, I just got an offer accepted over the weekend on a multi-family (4-plex) unit in South King County. I am pretty excited about putting all my learnings into action but want to learn more from you. what are the gotcha with having a mutli-family that you're aware of? here are some of the questions I am debating:

1) should I manage it myself? it's 30 miles away from where I currently live but more like 2hrs in traffic (gotta love Seattle traffic).

a) if I would to hire a prop mgmt company/person, do you have any recommendations?

2) Inspection - It was built in 1978, is there something specific that I should look out for given the age of the building? 

3) Section 8 - Most of the current tenants are section 8, would you say this is good or bad? Is there a best practice on transitioning section 8 units?

4) Should i put the units under my name or open an LLC? I started the LLC process today, but not sure about the pros/cons here.

Thanks again for you continued support of this community! 

[Steve Vaughan]

Welcome @Joe A.

Congrats on your first deal.  Is it actually in Seattle?  Reading the landlord-tenant law in WA, Seattle has a lot of exceptions.  I would hire a quality PM just for that reason.  Hard for me to even recommend as a DIY all the way type of landlord, but I wouldn't mess with Seattle's rules. Get a pro. 

I don't put residential property inside LLCs.  Lots of issues with transferring after the purchase, too.  Your title insurance and hazard insurance were issued to you personally.  Then there is always the due on sale clause.  

LLCs have quarterly reporting requirements to the Dept of Rev here in WA and financing residential property in an LLC will require commercial loans. Shorter terms, adjustable rates, annual reporting, etc. I hate them and am paying all of mine off.

Anyway, congrats and welcome!