All Forum Posts by: Pete M.

@Curtis Bidwell  Thanks for the input!  The major difference I see with the example property you bought a couple years ago is the purchase price being less than half of what's being asked for this one.  That means this one would be running at a loss for a while... which is where I'm wondering what should be expected.

@James Lusk  Thanks as well.  This one was wide open and out there, so I'm not surprised it's already gone!  Would you have deemed it acceptable to have negative cash flow for potentially a year until you could raise the rents?

I've always heard to pay what the property is worth now, not what the seller thinks it could be worth; is that a myth in this market?

Thanks.

I'm currently looking at an apartment complex in Lakewood, and am curious how it compares to Tacoma.  I'm obviously not local to that area, so curious as to any feedback from locals or people familiar with the area.  Does it operate as it's own city?  What are the perceptions?  It seems to be dominated by the joint military base.

Here's a link to my post in the multifamily forum to analyze the deal; any and all input is welcome and appreciated.

Thanks.

Hi all,

Looking at 10-unit in Lakewood, WA, basically surrounded by the military base.  Split is seven 2/1s and three 1/1s.  Current rents gross to about $6k/mo, which seems way under market.  Could likely get $8800-$10k, based on rentometer averages.  The complex was built in 1968; pictures of inside look nice, but are also dated from 2004 (for inside), so who knows.  Asking price is $795,000, which I have a feeling is very high for the way-below-market rents.  Oh, and it's on an EPA Superfund site... but even then, rents seem to be way below market, even for other units in the same site.

I feel like it could work out great after doing some undetermined fixing-up and significant raises of rents, but both are also speculation, and I'm also loathe to give the seller money for value they're not going to do (and asking for a low cap, probably).

Anyone have thoughts on this property?  It'd be a pretty negative cash flow to start out, banking on the fact that it could be turned into a gem.  This seems a bit optimistic in my book, and I'm looking for a reality check on whether I should be laughing at this or jumping at it as quickly as possible.  My gut is saying to not pay sellers for value they're not delivering, but I'm not sure what's to be expected in the current market conditions.

What are expected cap rates for Lakewood, WA?  Any special considerations for the EPA Superfund site?  What kind of offer price would make sense (realizing they may blow it off)?

Thanks in advance.

Hi all,

Evaluating an opportunity in Yakima on an 8-unit, and curious as to feedback from others on what the norms are for cashflow per door, cost per unit (these are 2/1 units), and cap rates for the area (plus other relevant factors I'm likely missing).  I'm still waiting on documentation from the seller, so don't have specifics to provide yet, but wanting to set my expectations and understand the norms to evaluate against.

Thanks in advance.

@Derrik Jacobson You're getting plenty of great feedback already from folks on this thread, but I'll echo the hesitancy.  At a very high level, you're not hitting the 1% rule (which is not set in stone, but a good quick litmus test), and you're omitting several costs that should be included in your calculations, as @Casey Maib pointed out. Even without those additional costs, I'd say your ROI numbers are too thin. I've considered investing in Yakima myself, and it is definitely an area where appreciation should not be anything more than icing on the cake; your cash flow numbers need to be able to stand by themselves. Obviously this is all opinion.

On a side note, most investors consider CapRate inconsequential for anything under 5+ units.

Welcome and good luck!

@Rupesh Singh I'm not a current investor (so take this with a grain of salt), but you need to avoid the hot markets if you want cash flow.  Seattle especially is pretty much all gambling on appreciation at this point, as the properties are valued so high that cash flow is extremely low to actually being negative.  My research and time spent networking has all come back to the point that unless you're getting a screaming deal in a hot market, the secondary (or even tertiary, in some cases) markets are going to be best for cash flow.  The Midwest tends to do better for cash flow as well.

@Travis Zarelli

There are several groups in the area to check out.  You can check the Events section here on BP, but I'll list out a few others below that I've been to:

Fixated on Real Estate (FORE): Organized by Tarl Yarber.  Believe it's meeting this Thursday (22-Feb) at Renton Technical College. https://www.meetup.com/Fixated-On-Real-Estate/

Real Estate Association of Puget Sound (REAPS): http://www.reapsweb.com/

Seattle Investors Club (SIC): https://seattleinvestorsclub.com/

Cascadia Investors Alliance: https://www.meetup.com/CascadiaInvestorsAlliance/

Each can focus on different areas, but they're all excellent for networking with other investors and RE-focused business partners.

Keep listening to the podcasts, start joining the networking events, and you'll start to define your goals and how you want to get there.  Single family, multifamily, flipping, buy & hold, commercial, wholesaling, etc... lots of avenues to success in this business.

Thanks.

Had Thomas Jones from Sweeney Conrad recommended to me by another investor/broker.

Full disclosure: have spoken with him, but not used his service (don't own any properties yet).

Thanks.

Welcome to BP, Christy!

Tell us more about your goals!  Which areas are you looking in?

Welcome to BP, Zachery!

Relatively new to investing myself, though I've been doing lots of research and looking at properties.  Anyway, do you have an interest in making a career of real estate?  In other words, would you enjoy that field?  Lots of people gain valuable experience by working in the field, but it's by no means a requirement.  I work in the tech sector, for example, and (will hopefully soon) invest on the side; perhaps I can grow my income from RE investing to the point where I could exit my current job.