All Forum Posts by: Allen Clark

It's in the lease that they sign that they must obtain and show proof of insurance. I need to see that before they move in. Have not had a problem with that yet. 

@Julie Macd - The owner of the other half of the duplex that I bought tells me he wants to sell in the summer of 2016. I bought for $350k in December and a unit very similar to mine just went for over $400k. Since I put 30% down there is equity to take out. I have thought about it but it does feel like going in the wrong direction. I need to think through when I would add debt vs using cash and savings. 

@Steve Vaughan - Yes, I will go slowly. I have been lucky so far and my rookie mistakes have been recoverable. I have ample cash reserves to cushion any (most?) surprises. 

Going forward I will keep these two rentals online and add the basement of the 1922 brick house. Once I get all three producing income then I will think about what to do next. Perhaps work up to buying the other half of the duplex?

Thanks for the warm welcome. Things are good in Seattle which leads me to wonder how exactly is the best way to prepare for the inevitable downturn...

@Alex Chin, I asked friends and colleagues for contractors that they have used in the past. I ended up with a young, hardworking, contractor that was willing to do the work at a lower rate in order to build up his referral base. His quote came in lower and we worked well together. I am very happy with his quality of work, his ability to deliver on time, and his ability to manage sub contractors. 

A case study is a good idea. I will have to think about what I want to do. There are a number of friends that seem to want to get into this but I doubt that they actually want to take on the risk or the work to get the job done. Let alone managing tenants. 

Thanks for the replies. 

I like doing rentals, it seems. Buy and hold. I am patient and my time horizon is long. I figure if I hold these for 15-20 years they will pay off well. Their location is so good and I think urban living in Seattle will just get more compelling. 

I did not pay all cash. 30% down and paid cash for the $200k in renovations. I am through all the finances that I comfortably want to use. I am not interested in dipping into my 401(k) or the money I have set aside for kids college savings. 

I have not considered get a broker's licenses. I am not that interested in making money that way. Are you suggesting to do that in order to learn more about how the transactions take place?

I do not know what wholesaling is. Like I said, I am new to this. For these two properties I just watched Redfin like a hawk. I had strict criteria (> 85 walkscore, < 25 min walk to downtown, cash flow positive with a 15 year mortgage after 25% down). When I saw one I went after it. The house in Lower Queen Anne has a view easement against it that I did not notice (rookie mistake) which meant that I cannot go up at all. I am sure that made the property unappealing to some investors. I renovated keeping the current footprint and it worked out well for me.

I think right now I have been smart and lucky. Rents are exploding in Seattle, especially for places close to downtown. The 20 somethings working at Amazon et al do not own cars and want to live in cool neighborhoods. I thought I would get $2,800 for the upstairs of my brick house but ended up getting $3,500. For the duplex I get $2,750 but I know I can get $3,200 when these tenants leave. 

So the question remains, where do I go from here. I have tapped out the finances (I have cash reserves of course) that I am willing to spend. Do I sit tight for a few years? I do see other properties that fit my criteria and would do well. Do I think about looking for investors? 

Think about the tax consequences as well. If there is a gain you might want to lock that in tax free and sell now. You can use the cash to buy something where you live next and then manage a rental that is close to home.

In the past seven months I have bought my first two investment properties in the City of Seattle and have brought them online. 

Property #1 is an 8 year old 2BR 1.5 bath 1,100 sq ft half duplex bought for $350k and renting for $2,750. No money needed for repairs to get it rented. 20 min walk from downtown. 

Property #2 is a 1922 brick house that I am converting into a legal duplex. Bought for $550k and will put $200k in. Upstairs is done and now is 3BR 1 bath 1,500 sq feet renting for $3,500. Basement is next and will be 650 sq ft 1BR 1 bath and will rent for $1,800.

Both are cash flow positive and I think I am doing ok. I am 46 and solid in the business world but new to investing in real estate. I will keep my day job as I am good at it and certainly want to keep my regular income as I explore this new hobby. 

I work in tech (there are lots of us in Seattle) and my friends/colleagues/acquaintances have noticed my new hobby. People are asking what I think of new deals but, believe me, I am very green and I know it. However, the locations of the two properties I own are fantastic. Keeping within a 20 minute walk to downtown Seattle is a great niche for me and there are so many old houses that could use some love. 

I am now considering doing a few more of these but am out of my own personal money. I am not willing to get over leveraged as I know real estate can go up and down. I have people asking me if I would be interested in taking on investors. To find a few new projects to work on. I am looking for tips as I consider this. Can you point me to the best books / sites on building a real estate portfolio that you manage for other people? I know how green I am but I am smart, driven, and hard working. Maybe in a few years I would be willing to do this more on a full time basis. Maybe post 55 it could be a good retirement gig. For now, I would like to read and consider. Although I just saw three properties today online that fit my criteria. Within a 20 minute walk to downtown and immediately cash flow positive.

Any thoughts for a newbie?