All Forum Posts by: Curtis Bidwell

@Wendy Lacey  I have done several 1031’s and never had an issue in either side of the deal.  In your circumstance I would counter with language that requires the seller to reimburse all costs related to your due diligence if he decides not close for any reason.  That puts added pressure in him to get his exchange property in order in a timely fashion, and it will tell you just how serious he is.  If he refuses that counter then I say it’s time to walk.  

@Nikki Kofkin  Here’s a contrarian thoughts to consider: 

If your primarily looking for cash flow this is not a bad deal, in my area it wouldn’t last a day on market.  If you take the $1872, 1350 (and JUST go $1350 on the other 2) you have $6k income on a $442k price (1.35%  purchase to rent ratio). That’s a solid return — assuming you don’t have high expenses.  Have you seen a couple years of tax returns on this property to verify income and expenses? 

As a 1-4 unit it will only sell based on recent sales of like-kind comparables.  That’s the appraisers job.  Your seller is probably looking to get a price based on income like a commercial property (5+ units). He may need to be educated in this regard to help him get his price in line with the appraisers.

BTW during the downturn of 2009ff, I never lowered rent on an existing tenant.  Only on empty units. 

Best of luck to you!

@Aubrey Cook  several variables here.  

Are you buying commercial (5+ units) or residential?

How long have you been “in the business”?

$75% is a good rule of thumb for sfr and for those who don’t show rental income for at least 2 years. After 2 years it’s just actual income.

On commercial they have what is called Debt Service Coverage Ratio.  Basically, after expenses you will need to show 1.25x income to the mortgage payment. 

There are other considerations but this gives you a good starting point. 

I have a friend who has 3 homes that he does this with -he’s 27! (not my idea of fun😅).  Just figure out fair market rent and justify it.  You won’t have leases in place when you purchase.  When you refi (perhaps with the same lender) show your income and expenses. They will likely only lend based on fair market rent, not your inflated niche marketing. 

Everyone who ever wanted to do something of significance got shot down by those closest to them.  That is part of the refining process.  Listen, evaluate, and prioritize their counsel. Some will have value that will help keep you on target and help you avoid fatal mistakes. 

You’ve heard great advice here.  Make sure it fits your Interests, Abilities and Talents (AIT), and then go and mature in each area.  

Several factors involved here:  

• Construction is not keeping up with demand.  
• The economy is strong and growing, with increase in high paying jobs throughout Seattle region. 
• Seattle is pricing moderate to lower income people completely out of the market so they are moving south to Tacoma and now into Olympia markets.  
• The political climate took a huge shift this year with many small landlords exiting the market leaving fewer rentals (look up Senate Bill 5600).  With more legislation being prepped for the next session we will undoubtedly see even fewer independent housing providers (more demand, fewer options, higher rents).  (New laws requires longer notice periods, tougher to evict -with judicial 'discretion' to delay evictions, and an increase in excise tax upon sale of property). 

So, no crystal ball available, but housing in this market is likely to continue climbing along with increased rents.  The pace will rise and fall with the seasons and other factors.  If you have solid, effective, professional management in place I would hang on to what you have unless you have a better plan for the equity. 

Assuming you (and perhaps a spouse) are the only members of the LLC you may be able to do a quit claim to your personal name for financing. When I have done this in Washington state there is no tax due, just the filing fee. We simply write "mere change of identity" and file the document.

I just purchased a 22 unit that was significantly under rented ($400/unit).  On April 1 I gave $75 increases with a detailed explanation of current rents, etc.  I only had 1 complaint.

As I took over I had 1 empty, 1 had given notice, and a section 8.  They were each rented at market and occupied (60 day notice to sec-8 approved at market rent).

All existing tenants will get their 2nd $75 increase effect September 1.  My goal is to have approx 3-4 units turn with each increase (6mo increments), giving me time to turn units to full market without a glut of vacancies all at the same time.  

I refied through Chase Commercial.  they were very competitive in rates and had lower fees (in house appraisals).  They are particular about area and type of building, but tough to beat if you have what they’re looking for. 

@Naomi Pinger has hosted a solid meetup in Olympia area for a few years now.  Details in the link

https://www.biggerpockets.com/forums/521/topics/695429-olympia-rei-group-meeting?highlight_post=4106005&page=1#p4106005

(Sorry Naomi, won’t make this one ... will be in Hawaii😃🌴).