All Forum Posts by: Damian P.

Hello BP Washingtonians, 

I'm looking to invest in a vacation rental this year around Western Washington. Will short-term rent it out, and plan to also use it personally a handful of times a year with family of 3 and a dog. 

Right now our sites are set on Glacier, WA (Mount Baker) for reasonable priced homes, and potentially Chelan, WA where the home prices are likely to eliminate this option for the time being. You can get a great cabin house in Glacier for around $400,000 - $500,000; in Chelan, not so much and you are looking at $600,000 - $1,000,000. 

Anybody have experience with STR in Washington? Any experience in Glacier or Chelan? I'm based in Maple Valley, WA and would like to keep within a 3 hour drive or less.

Any other good spots I might be missing? Thinking possibly also Cle Elum area. 

Thanks! 

Damian

Hello all, 

I recently bought my first owner-occupied home (which I intend to rent in 2-3 years), and would like to purchase my first full rental property by the end of 2020. 

In reading "Tax Strategies for Savvy Real Estate Investors" (highly recommend btw), I've discovered the importance of a CPA who is well versed in real estate. 

Would anyone have a CPA local to Seattle/Bellevue area who they would recommend? Feel free to PM me, or send via this thread. 

Thank you!  

Damian

Playing around with a compound interest calculator for the first time, its very exciting, and brought up a question on the correlation between net worth and rate of returns on real estate over a 30 year career.

A few variables I plugged in for 30 years compounded (I choose to compound “monthly” as opposed to “yearly” which makes the final number higher. Assuming here that all money from rent goes back into the fund monthly (monthly rent), and compounds the whole way, but please correct me if I’m wrong!

Starting capital: $15,000 (just bought first house which I intend to live in and the rent in 2-3 years)

Monthly addition: $5,000 (Contribute this today from job plus payments on house; as I build cash flow this number should increase over time)

Rate of Return and Net Worth after 30 years; is where it gets interesting:

7% (the stock market): $4,993,000

10%: $11,580,000

15%: $35,842,000

20%: $120,000,000

25%: $425,000,000

30%: $1,552,206,000

Clearly, rate of return is most important factor long term. If I change my monthly contribution to $20,000/month @20% return, I’m left with $465,000,000 after 30 years.

So, first it’s crazy the potential for wealth holding over 30 years with compound interest. Second, what would you say is a sustainable rate of return (cash on cash) over the long haul in real estate? What have people seen in their businesses?

I know the BRRR strategy is said to at times provide up to 50% return on your cash, and through standard rental properties you can get up to 30-35%, however this decreases as the loan matures.

Thanks for any input! Crazy to think over 30 years you can turn $15,000 + $5,000/month average investment over 30 years into potentially $500,000,000 - $1,000,000,000!!

On another note, is it worth investing into the stock market at all with an average return of 7%?

Hello Seattle BP, 

I'm considering purchasing an owner occupied home in the Renton, WA area for a first time home purchase. With a lot of growth in general in the Bellevue area - Facebook adding large offices in Bellevue, aAmazon moving HQ2 to Bellevue - I feel the area should appreciate. Will need to use FHA to get into a home sooner than later, as apartment lease is up Q1 of 2020, and I don't want to spend another full year under a lease. I would prefer a SFH over an apartment/condo, for the extra space, as well as for the yard for my dog. My target range is from $350,000 - $420,000. I will put 3-10% down and then sprint to build to 20% equity ASAP.

Does anybody have experience in the Renton area? I'm finding nice homes in the Cascade-Fairwood area; would it be reasonable to believe it would be easy to rent a 3 bedroom this far away from Bellevue/Seattle? I want to stay southeast/east of I5, as areas closer to I5 tend to seem rough. Newcastle/Factoria is nice, but then you are getting out of my price range. What are other good neighborhoods to look for?

Best case scenario, I would be able to get positive cashflow renting it after living in it for at least a year. 

With 3.5% down on $400,000 3 bedroom/1-2 bath ($14,000), that puts me at about a $2,442/month lease, including PMI at 1% total loan, with yearly taxes at $3,000, annual home insurance at $1,000. If I build to 20%, and assuming interest rates stay low 4%, once I hit 20% equity, refinance, I'm looking at around $1,815/month mortgage.

Rent prices on Rentometer range from $1,800 - $2,300 depending on what area you are in. Unfortunately, Cascade-Fairwood seems to be closer to the $1,800 range, I'm assuming because it's farther away from everything. 

If you've made it this far, thank you! Any thoughts, feedback, suggestions?