All Forum Posts by: Briana Nasman

I personally would not invest in Seattle proper right now. It's extremely tenant friendly, expensive, and they are trying to crack down on short-term rentals. However, the surrounding areas can be great. I did pretty well renting out my old apartment in Bellevue when I travelled, and have had great success renting a room in my condo in Lynnwood.

Hey all,

I hate to ask something so specific to me, but I would love some opinions!

I currently own a condo rental and a boarding house in Washington state, and have been in RE for a couple of years, though only investing for a year. I have been looking for a large multi family or small apartment complex, and I found one I really like in Grays Harbor County, WA. My big, giant, red flag concern is that there is virtually no job growth in this area. The economy is primarily based on fishing and forestry, which I don't really consider to be sustainable sources of employment in the long-term. However, everything else about this property lines up very well, and I want to pull the trigger or move on asap, since I've already analyzed it forwards and backwards.

Here are the details:

625k PP

current monthly income $5,600, annual income after expenses (utilities, taxes, maintenance, repairs) is 46k, which would cash flow after debt service, but not a ton.

However. The rents are legitimately 25% under market. No joke. They had a move out on a 1 bedroom unit (all rented for $525) and rented it for 1 day for $700. There are very few rentals in this area... they have been at 100% occupancy for the last several years. 

There are several other ways to make this property cash flow that are not utilized right now. We could get an extra $1k monthly without blinking, and there are 3 other ways to add solid income on the property after the 1k (boat storage is super desirable, coin op laundry as tenants drive 15 minutes out of town for laundry currently, small RV park or storage). This is also a bit of a destination, as it is right on the WA coastline, so Airbnb has potential.

All in all, I'm confident that I can increase my net to 92k annually, and after expenses and debt service (partial commercial, partial seller carry), this puts me at ~$2,500 a month cash flow. 

Am I digging myself into a hole with such a limited economy/job growth area?! I really like this and love the potential- but am I getting emotionally invested? Ahh! Pls help. Thank you :)

Hello!

Hopefully you have had your questions answered by now. But if not, I own a halfway/transitional/clean and sober house in WA and would be happy to answer your questions. We bought at 375k, are currently renovating the basement, and have income of $4725 (before utilities, insurance, and debt service) right now. When the basement is finished, we will have about $6500 per month. I would 1000% recommend having an in-house manager. I'm not sure it would be possible to even run one without a good manager. I manage the rest of it, namely rent and evictions. It did take a commercial loan, and only one bank in our area were willing to do it, but the interest wasn't terribly high (though we do have to refi in 5 years). It's been a good experience, very eye opening for me as well as financially nice, and of course, there have been unexpected issues (ie, no matter how sad a situation seems to be, have a 1 strike late payment policy!) I have most of my tenants through local mental health/addiction services, and those tend to be better than the randoms from craiglist, as they typically have a case manager to check up on them occasionally...