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All Forum Posts by: Blake King

Blake King has started 27 posts and replied 148 times.

Post: First Investment! House Hack Duplex to fully rented

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $290,000
Cash invested: $25,000

Purchased as a live in investment / house hack. Remodeled both units slightly. Moved out 1 year later as i transitioned careers and locations. Currently rented out cash flowing around $700 / month after mortgage and utilities (not including cap x).

What made you interested in investing in this type of deal?

Bigger pockets of course!

How did you find this deal and how did you negotiate it?

Found on Redfin, offered what i was willing to pay for my strategy.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

Bought with redfin while i was a part time employee to get a break on commissions. Lowered insurance costs by insuring it myself. Sweat equity in doing a lot of the remodel ourselves while living in one unit. Increased rent and managing it ourselves. Refinanced to lower monthly payments and increase cash flow and leverage.

What was the outcome?

$700 / month cash flow, proud of it for our first deal, and loved living there while we could. Hoping to increase cash on cash return in our next properties.

Lessons learned? Challenges?

Biggest lesson, cash on cash return, and the value of having cash.

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34
Originally posted by @Julie Marquez:

All my rentals are in MV and the only non-refundable fee we charge is for carpet cleaning. I expect the place to be returned in perfect condition so that we don't need any more fees collected. And if I need to charge for more work to be done or from their damages, I take it out of the refundable deposit. They are given a price list at the beginning so they know my cleaning rates and how much I'll charge for everything when they leave it in poor condition.

Not true - we also charge a large non-refundable move-in fee but it is changed to refundable if they stay 12 months or more. It is because we do month to month agreements only - but that's a different subject.

Regarding pets, I never separate a "pet deposit" from a regular deposit. If there are pets involved I just charge a larger regular deposit. I don't want to fight over whether the damage was from the pet or not, or if they get rid of the pet and want the money back mid-residency. It's just deposit.

Hi Julie!

Thank you as always for reaching out, always so heolpful! Especially you being in Mt. Vernon :) Would you be able to send me a copy of the price list you have? would love to see that. I will dm you :)

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34

Hi @Caleb Heimsoth looks like it is a little high for the area, but not outrageous. Will be lowering the pet deposit to $300, $100 as a cleaning fee, as well as not taking away the nonrefundable fees. That’s the plan I think! 

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34
Originally posted by @Sharon Rosendahl:

The market in Mount Vernon will support almost anything reasonable. I work there and know that coworkers have difficulty finding rentals. 

I have a couple houses in the Oly Penn. There are few rentals available there too, particularly where ours are. We charge first, last and damage deposits. I considered doing a non-refundable portion but feel that it is my problem to shampoo carpet after a tenant leaves (I actually own a pretty heavy duty cleaner). Unusual damage would be paid by the damage deposit. 

I charge a $350 non-refundable pet deposit since I feel at the very least I will have extra cleaning such as a professional carpet cleaning to make sure dog/cat hair is completely removed and even a faint smell is gone. I've also had yard damage (even good dogs can affect your grass and shrubs). I also charge $35 pet rent.

Never rent to friends. I had an employee that I rented to. Cost me $10k and I almost had to evict her too. Luckily, she left on her own and in about 9 months (I normally did inspections once a year. I now do them every 6 months). The fact that these friends are just assuming is not a good sign. They may also assume that rent is optional. How are you going to handle lease violations? What if they don't let you inspect? 

Another bad story about friend/tenants. So we bought a house out in the oil field boom area while we were working there. We had some friends who wanted to find a different place to live but they needed to wait for the landlord to give them back their deposit. We agreed they could move in while they waited for the deposit and then they would look for a rental. It was hard to find housing back then. We set a deadline about 3 months in the future and agreed to a minimal rent. Apparently maid service was supposed to be part of the rent. They also bought one of our minor children alcohol without asking us.  They also taught him to drive, without a permit. Then they decided that they had paid us enough rent so didn't want to pay anymore. Hubs had known this guy since elementary school. My husband was back home and had a serious accident and we chose to move back to Oregon and sell the house in North Dakota. We told them they had to leave since we were selling the house but said that they got first shot at buying it. They couldn't finance it and we couldn't carry so they were pissed at us. My husband lost a friend from elementary school over this.

My niece and nephew have a similar story. 

PM me what you are renting and how much. I think someone at work is still looking for a rental.

 Hi Sharon thank you for sharing all of that! My wife told them they can move in, but i told her to tell them that even though they are friends, that I run this as a business, and will not give them any special treatment becuase they are her friends. I had her place the blame on me since i dont care what they think of me, it is my business! its in a duplex that we owner occupy the other half as well, so we will see how this goes... If they fall through i will message you details, we are meeting with them Saturday! 

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34

Smart, love it @Andrew B.thank you!

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34

Thanks everyone! I do wish we were not renting to mutual friends, otherwise i would have no problems with leaving it as it is... My wife had already mentioned it to them, and they took it as they could move right in... Shes new ;) so @Andrew B. you suggest either just changing it to a larger deposit (refundable) or changing it to lets say a $200 move in cleaning fee? or maybe something like $200 pet fee on TOP of the damage deposit and pet damage deposit? I will be sure to do a great move in checklist with them. To be fair the house needs some work. 

follow up question @Ruth Bayang maybe you know, if we do updates to the house while they are there, do you do a new move in checklist? or make note on the previous move in checklist?

Thanks everyone!!

Post: Non-refundable damage deposits?

Blake KingPosted
  • Investor
  • Seattle, WA
  • Posts 155
  • Votes 34

Hi everyone!

This is my first time starting a new lease that was not an inherited tenant. Luckily i got pretty lucky with the inherited tenants, i know thats usually against the rules ;) 

I am looking for advice on damage deposits and non refundable damage deposits more specifically. My father owns a few properties in Marysville, my property is in Mt. Vernon. My father told me to collect $300 as a non -returnable fee, for cleaning etc, as well as first months rent of course ($1200), a $900 refundable security deposit (with the fee totaling 1200) . They also have a small dog, so we are charging them only $20 / month pet fee, as well as $200 non refundable pet fee and $800 refundable pet deposit.

I am not sure about all of these non refundable fees and deposits. I want to make sure i am covered, but we also are renting to mutual friends, which i was unsure about. Is this pretty standard to have non refundable fees for cleaning etc? 


Thanks for the help!

Hello @Kevin Romines thank you for reaching out! Sounds like we should connect! Ever broker I have talked to has told me I need two years. Going to direct message you here!

Originally posted by @Julie Marquez:

@Blake King I'd try a different bank. I have found BECU to look at things more favorably than other local banks. Everything you are doing is great, you just need to talk to more lenders! Skagit is appreciating so fast lately.

Thank you @Julie Marquez have you had luck with any others? I went to becu since i have had them since my first savings account when i was 12, and have loved their services... Guess they cant win with everything! :) 

Originally posted by @Edward Seid:

@Blake King You're doing a great job starting young. As most have said, the property doesn't cash flow. I started this way in 2012 with a triplex in Seattle. House hacked and didn't make a dime until I moved out of the 3rd unit. I plan to use the 500k+ equity I built up to purchase something bigger in the future. There are strictly cash-flow and strictly appreciation style investors and then there's the blended type that look at the IRR (internal rate of return). If you're planning to keep the properties long term, you're more appreciation/IRR like me. Neither style is incorrect, but a matter of preference.

Back to your question, you won't be able to until you move out and have a signed lease in hand. Can you live with parents or friends for a while?

Hey @Edward Seid Thanks for reaching out! Jealous of when you got into the market in Seattle, that was a smart move! if only 15 year old me could have bought then :D I think my wife would be open to moving in with one of our parents for a short period of time, i think that's what we will try! Thanks for the encouragement. I think my strategy and next move will depend on if i change jobs in January or not. Bellingham / mount vernon market is much different than the Everett / lynwood market like i would be looking. If i stay here i might be able to find another small multifamily, if i move to everett i think that is out of the question. Might look for a live in flip or BRRRR single family? with these i will probably still need to look off market to cash flow?