All Forum Posts by: Allen Clark

Thanks for the comments all. Prices have been climbing in Seattle so I think the other half will go for $400k. Rent right now could get up to $3,500 but I don't think we'll see much above that this year. 

When I bought I did factor in vacancy and reserves but I was so very new to this so I did not really know what rent I would get. I've been happy with $2,750 but will put rent up as of Jan 1.

This is my first investment property and I bought off MLS so I knew it was not going to be a great deal. However, it seemed a good way to learn a bit. So I am ok with the return so far. The fact that renters have paid every mortgage payment this year helps.

I am only comfortable, for now, buying what I know and that's urban Seattle. < 25 min walk to downtown, high rentability etc. I am a buy and hold investor at this point. 

I am thinking about that other half of the duplex. I will try to buy it and try to cut a deal that doesn't get too high. I would be willing to walk away if he wanted too much. 

In December I bought 1/2 of a duplex in urban Seattle. . 

Purchase price: $350k
Size: 1,100 sq ft
Mortgage + taxes + insurance: $2,000/month 
Down payment: 30% = $105k
Age of house: 8 years
HOA: $0 - no HOA at all
rehab $$ spent: $0

Beginning in January I have been getting $2,750 in rent and I am sure I can get more next year when the tenants flip. I will go for $3,500 and see if I need to move down. This house has been brain dead easy and it has been cash flow positive from day 1.

We have the 1/2 of one house. When these were built the builder constructed 4 duplexes total. All the duplexes have no HOA for a total of eight units. I've talked with the owner of the other 1/2 of mine and I am set to buy that if we can come to terms. He is looking to sell in the summer of 2016.

My question to you is should I buy more of these? There are eight total and the prices are rising here (but so are rents). I can see why I would want to own both halves of my house so I can take care of building maintenance. If I buy parts of the others is the lack of diversification something to worry about? The units are right across the street from a small university and within walking distance to Capitol Hill ( very trendy) International District (like China Town), sports stadiums (go Seahawks), etc. This locations rents very well. 

Should I be looking to ultimately buy all eight or is that too much net worth to pack into one small street?

I just shrug. It's a buying opportunity for sure but really I don't try to time the market any more. I just add to my 401(k) and have a diversified portfolio. 

The real impact to REI will be interest rates rising...

I struggle with this as well. I have two investment properties where I have between 30 and 50% equity today. Fundamentally I hate debt so I have an internal struggle with not accelerating debt payments even though I know it may be smarter or more efficient to keep the cash ready for future investments. 

There are two more properties that I have my eye on and I want to be ready to buy them when they become available. So, for now, I keep the cash...

I decided to keep it where it is. I notified them that rent will stay at $2,750 through to the end of the year and then if they choose to stay into 2016 then we will adjust it. There has been no increase in operating costs. Just rent rising fast in Seattle. I'm sure I can get $3,000 in the New Year and may go for more. 

@Kevin Harrison - interestingly, there are so many people moving into Seattle that a start date of Jan 1 is very popular. This is when these tenants moved in and I had lots to choose from. 

This is such a great location that it will always rent, the question is how much can I get? Maybe in the new year I will start ridiculously high and then come down as required.  

@Matthew Cole - I have two rentals after seven months but now I am tapped out of cash that I am comfortable spending. How did you finance 8 rentals in 2 years? 

@Travis Beehler and @Jim Shepard. I think I will keep them at the current rent. They've been great tenants and I do want them to move out happy. If they stay past 12/31 then I will raise as it is a new year and they will have been in for 12 months. I will think about the idea to raise the rent if they move to month to month. I already charge a premium for the privilege of having a flexible lease structure. 

2 BR / 1.5 Bath 1,100 sq ft renting for $2,750 in Seattle. Current tenants had a six month lease starting Jan 1 and now are month to month. They are in the city from Missouri and will be leaving either in Sept or Dec, they're not sure yet. The tenants have been great. They pay their rent on time every month and ask very little of me. 

Rents are increasing so fast in Seattle that $2,750 was just above market rent in Jan but now I could get $3,000 easy for the place. When they went month to month I told them I might raise rent in Sept if they choose to stay. When they leave I will likely list it for $3,200 and see if I can get that. 

There is something to be said for keeping good tenants. They are leaving for sure by the end of the year. Do I raise the rent to $3,000 in Sept or just keep it at $2,750 for their last three months. 

@Richard C. - would love to see that data. Typically Forbes is not exactly the most quantitative in their writing. 

Everything I see in the Seattle area is anecdotal of course. The suburbs are booming, building new SFHs like crazy. Traffic is getting worse and new roads are not getting built. Downtown is booming too. In the suburbs rent is about $1.25 - $2 per square foot. In the city you can charge $3 per square foot. It seems to me that owning rentals within walking distance to downtown makes sense right now. However, I only have two properties and I bought them in locations where I might want to live some day. So for me, I am catering to the young urbanite. 

I would still love to see demographic research that considers what these young urbanites will do in ten years. Will they go to the suburbs or stay in the city. Time will tell but there should be data that can predict. 

The interesting thing for me is the trend toward urban. In Seattle, it seems that the people coming into the city that are in their 20s want to be walking distance to downtown and live in an interesting neighborhood. Couple that with strong tech based salaries and rents are soaring in the city. I would love to see some demographic research data that dives into housing preference ie urban vs suburban.