All Forum Posts by: Uwe G.

@Erik Bood Congrats on the BRRRR!

Hi @Brint DeVilling, I am local to everything Clark County, WA and work for Personal Property Management.  Let me know if you need help verifying rents before you close on any deals.  More then happy to do that no strings attached.  Let me know if you every want to meet up locally and talk real estate.  I am always looking to meet folks with similar goals, etc...

Hi @Ray Parker, I would make sure that either the elementary school or high school has good ratings.  You can view that on 
https://www.greatschools.org/.

The other thing I look at is the crime map and the median income.  Those will give you good indications of what is going on.  For example, in my area of Vancouver, WA.  I like Felida, Salmon Creek, and Ridgefield.  They have the highest median income in Clark County that is closest to I5 (and the entire county with exception to Camas by a couple thousand dollars) and they are all right next to each other.  Also, crime is low.  Schools pass the test as well for me.

I like to follow High School Sports to see how strong a community is.  What teams for girls and boys are making the state finals or quarter finals on a regular basis (Soccer, Basketball, Softball, Baseball, Volleyball, Football, etc..).  In my eyes that shows stronger parenting and community to make it so an entire team can compete together at a high level.  Not easy to do as it is a big time commitment for all involved.

Lastly, I like to make sure I am a short drive to an airport (less then 30 minutes) and have access to very good healthcare.  The healthcare part is two fold...it means lots of high paying and recession resistant jobs.  And also it is important to have good access to healthcare for our aging boomer population that are giving renting an option as they relocate to the area I am in.

Regarding resources, I would focus on the following:

1.  Making sure your debt costs are low.  If your debt cost (interest rate) is lower you can buy safer assets as you are getting started.  To me this is a big part of the "deal"  I like to do the boring 30 year fixed rate and lock in as low as possible.  If you don't have pristine credit, work to get a pristine credit score.  There are services that will help for $250 if you need help.

2. Learn how to use HELOCs for future use (will take several years if not more to get the equity). You can watch youtube videos on this. There are some that teach you how to pay off your mortgage in 5-7 years using HELOCs. Watch those to understand the idea of HELOCs and how you can use them. That strategy is up for debate if you want to use the paydown strategy but watch it for the HELOC part.

3.  Make sure before you buy a house you are going to live in, make sure it would rent on its own to completely cover your costs and put $100 to $200 in your pocket each month.  For speed, setup your own simple spreadsheet in MS Excel.  It doesn't need to be fancy and your data is private for the deals you analyze.  Make sure to include, payment, insurance, property tax, vacancy, maintenance fund, and property management.  For vacancy I would use a 5-10% of monthly rent for my monthly vacancy amount.  For maintenance I would use 10% of rent and Property Management use 8-10%.  

4. Focus on not losing money your first couple deals. What I mean by this is don't get too complicated with taking on a massive remodel or taking on a speculative area. Given your interests in engineering related disciplines I would focus on financial engineering concepts and financial efficiency. What I mean by this is if you can earn a 2% spread immediately (buy a 6% cap rate single family and borrow at 4%) with low risk that can be the same financial outcome as taking on a BRRR that takes 3-6 months to remodel with a budget that goes above your initial estimates and then takes another month to rent, etc...

Hope this additional information is of value as it is a little different flavor of what most people are doing.

Hi @Ray Parker,

Welcome to BP and house hacking seems like a very safe way to start.  If you can get into a 4 bedroom house (2.5 Bath) and rent out 3 of them that is what I would recommend as long as it fits your lifestyle.  I also recommend doing this in the location you live in to start out as you are better aware of all the variables.  Stay conservative to start with projections and the risk you are taking.  Pick good locations that cater to the better schools (and decent freeway access) if you are doing single family.  If that goes well and the house is cashflowing (which if it doesn't don't do it) then move onto the next house assuming you can build up another downpayment relatively soon.  Unlike rocket science and data science, real estate investing is very simple as the math formula to be sucessful is very simple.  Learn to calculate a cap rate and understand the replacement cost of the single family house you are buying (or other property).  Pay attention to other common sense factors that may not show up in the math as well.

@Robert Collins, I agree with what @Trevor Ewen mentions and think of AirBnB as the following:

Assuming you can rent your property as a 12 month rental or chose to use AirBnB

Pros:  Generate higher yields in the short term, creates flexibility for your property if you also like to use it.

Cons:  More management overhead, cashflow could be unpredictable, higher property wear and tear, economically more dependent, on the hook for utiltilies (internet & cable) and upfront furnishing costs.

If you are taking an arbitrage strategy where you are renting from a landlord and then creating a spread.  You need to go direct to property owners to find propreties where you can do this.  Any good property management companies will not allow tenants to do this if they are aware of it.  If you are doing this you are not an investor but an operator...so make sure you are not confusing the two.  Investments have a value that can be sold, I don't see the arbitrage as a sellable asset.

Bottomline is that there are plenty of operators making money doing this and it requires minimal startup costs (~15K for furnishings) for the operating business.Overall, I see this business model as high risk for the following reasons:

1. Monthly costs (rents, insurance, utilities, landscaping, etc...)

2. Funiture and other furnishing costs due upfront

3. Property Owner can take back the property after your lease is up (potentially after the first 12 months)

4. Would a recession lower nightly prices?  How much new AirBnB inventory is coming online and how is that impacting prices and occupancy?

Hi @Joe Tran, I would love to try and attend but I am doing a getaway trip for wine tasting up in Walla Walla with a group of us.  If it can be moved to Wednesday or Thursday I would be able to attend.  Either way I hope a bunch of folks can meetup and discuss.

Hi @Chris Christensen, thank you for sharing your story!  If you have time my advice would to also get your real estate license.  I feel that in this market that might be a better use of time to generate more money.  It will also put you infront of a lot of deals.  The best part is you can open yourself to people that are willing to pay current market rates for properties as well and not just deal with investors who are needing a lot of margin.

@Ryan Jones Welcome!  I work in Property Management in Vancouver, WA (and the rest of Clark County) and would be willing to talk to you over the phone or meet up in person for a coffee to discuss all things real estate in Vancouver, WA.  Just send me a private message and we can connect directly.

Welcome @Jordan Barta.  REVIN is a great meetup to learn and see what other folks are doing as @Account Closed mentions.

Hi @JJ Picard,

There are an abundance of wholesalers chasing deals so I am pretty sure someone will respond to you on this thread on getting on their lists.  I am seeing a couple of ways people getting these deals.  Mainly snail mail, setting up signs around town, and then utilizing SEO with a website.  Personally I think the latter is the best.  We now have Zillow making cash offers as well.

Regarding upcoming areas; I think you could consider Vancouver an upcoming area as most of our neighbors south of us in Portland have no clue of how nice it is up here.  Regarding specific areas, if you follow areas tied to the high schools receiving high marks (7 or higher) OR focus around the new urban centers being built around Clark County you should be fine.  My personal believe is focus on the high quality and established neighborhoods because the entire area is unknown from a bigger macro perspective.  It is all the out of state people that will be driving up the investments over the longterm, not the local individuals moving on up.  The price, no taxes, quality of life is hard to beat in our little area of Clark County if you are digging the PNW.