All Forum Posts by: James Lusk

Hey Rob. This is a very familiar situation to me. We just fired our PM a couple weeks ago and hired another that has had excellent communication so far. We don’t have a long track record with them to pull from but so far so good. If you are interested in getting their info, shoot me a message and I’d be glad to get you in contact.

Congrats Rudy! Looks like things are going great and the properties are looking fantastic! Great work and best of luck growing the machine!

@Heather R. I agree with @Account Closed. I just sold a 4 plex in the Midland neighborhood of Tacoma which doesn’t demand the same rents as hilltop. Our 2/1 800sf units were going for $950 real fast. Our insurance was just under $100/mo. Also, at our 12 plex in the Tillicum neighborhood of Lakewood, our 1/1 500sf units are going for $800/mo (granted they are freshly remodeled). I highly recommend getting your advice, when it comes to numbers, from those who invest in your area of interest. Best of luck!

@Jonathan H. I have a 4 plex in Tacoma and a 12 plex just outside Tacoma and use the same PM for both properties. We had a tough time finding PMs that would return calls. 

It's very hard to find a good one right now. We have been working to train ours to meet our expectations. What we realized is that we had expectations that we assumed were standard practice. We quickly found out that was not the case. When you do find a contact to interview, be sure to ask them the nitty gritty questions that may seem like dumb or obvious questions. These will undoubtedly end up being the pain points down the line if not hammered out right off the bat. 

Just an example. We assumed when we discussed with our PM our desire to be kept in the loop with tenancy and repairs, that he would notify us of pending vacancies. Recently, my contractor brought up a tenant that will be leaving end of August, which was news to me. At first I was frustrated with my PM. I mulled it over and realized, I never spelled out any specific expectation for this scenario. My wife and I are now sitting down and writing out our expectations of our manager in many scenarios and we will continue to add to the list. When it is clearly written out no communicated, you will be much better prepared for success. Especially a small it appears you will be an out of state owner.

Sorry I don't have a contact for you but wanted to provide some insight.

Best of luck!

@Curtis Bidwell You are absolutely correct. Tillicum needs a head to toe scrub down. We are definitely seeing it trending in the right direction with the DOT expanding I5 through the JBLM corridor and reworking the on/off ramps. We are seeing houses in the area being renovated and getting scooped up. We are looking to be ahead of the upswing there. So far, no regrets!

@Adrian Chu We had to "clean house" at this property in order provide a quality living experience to new tenants. Right now we have 8 units about 2-3 weeks from being rent ready. Of the 4 that are filled, 2 are military. They have been great.

@Account Closed Our 12 plex is in the Tillicum neighborhood of Lakewood. We used a partner for the down and my wife and I financed the rehab through a series of loans. We used a $125k HELOC on a SFR rental we own in Lake Forest Park, borrowed against my annuity, borrowed against my whole life policy and a small family loan. It has taken a lot to get this deal done but after the refinance we should be in a great equity position with very solid cash flow.

I know you are an Everett guy. How are your cash flows on your north end deals? It would be great to sit down and chat sometime. Congrats on the recent purchases!

At our 4 plex, the units are 2/1 832 sf. They were all between 700-800/mo at purchase. We raised rents to $950/mo. We did just put in about 20k in updates after increasing rents but we fetched the increased rents without any grief from the tenants as that was market rate. They are all happy that we have improved a few items now. 

At our 12 plex, we are taking rents from 400/mo to 800/mo but that is an entirely different animal. That is a 220k gut of 10 units and all new tenants.

@Jake DeAtley @Curtis Bidwell is absolutely correct. You need to look at the cost to get a property to a solid cash flow. We purchased a 4 plex and a 12 plex around 1% and 1.2% but increased rents considerably right off the bat as all leases were month to month and that didn't cost us anything to achieve that increase. That's partly why the "rules" can be misleading. You could cut out a great opportunity for a value add. Get to know what expenses and market rents. Also, just because a seller is asking for a certain price doesn't mean you should offer that. Out 12 plex was listed for $650k and we negotiated down to $500k. That was an mls listing. Be patient and be confident in your numbers. Good luck!