All Forum Posts by: Dan K.

Hey Dustin,

I grew up in IL though am not familiar with your city. Is it considered a distinct entity or part of metro Peoria?

I myself am new as well so take my thoughts with that in mind. First, I would ask you, if you were renting somewhere else in Chillicothe and saw this house on the market for the same price, mortgage, interest, etc...would you still be interested? In other words is this offer appealing to you or just convenient? Are you interested in 2 bed houses in Chillcothe in the first place?

Second, if your projected cash flow is $230 less unplanned expenses, will this amount you make each month be larger enough than the extra rent you are going to pay for renting out a bigger home to justify this investment?

Also, do you estimate any repairs would need to be made before you rented this out?

Thanks @Kim Martin. There are some surrounding small towns with under 2,000 such as Sumas, Everson, and Nooksack. Thoughts on a multifamily unit in a small town near Bellingham?

Also, whenever I see an empty lot listed in Bothell it's hyped as a rarity. Ideas about building on lots in your area? That's a route I've been thinking about to get over there.

@Kim Martin

Hi @Chris Newman. I am interested in buying my first property by the end of this year. I'm interested in the Everett-Gold Bar-Granite Falls triangle (with US-2 serving as one of the triangle sides) and noticed the areas you mentioned in your post. I had two questions for you:

First, my goal is to own a buy and hold multifamily unit. I'd be curious to hear your thoughts on what area within that triangle, if any, you'd recommend for this type of property. I'm leaning toward a multifamily for all of the popular reasons, but I'm open to alternative suggestions should your answer be such.

Secondly, it seems that Marysville and Monroe are some of the more affordable areas. Besides the obvious reason of cheaper being better, I'm interested in cheaper because I do have enough savings that, in a cheaper area, I could front a significantly higher down payment than 20% and thus gain a lot of leverage during the buying process. One possibility for getting into a pricier region, Snohomish, for example, would be buying a lot and developing. However, after reading about what a business you have selling rights to developers, I would assume that on the other end of your business, the demand for rights is very high and therefore the supply is low (you profit because you are a supplier). Given your knowledge of this niche, I'm wondering if you think it would be unwise for me to attempt to build my first property in this type of area. 

Also for anybody, what type of property would you want to own in Monroe? I've been in that town a few times and it's a hard one for me to read. Is it a commute town for Boeing employees who would want SFR? Is there a current influx of people fleeing Seattle seeking current rent? Do that many Boeing employees really choose to live there when they could afford somewhere they don't have to do the awful drive across 2 twice a day? (maybe preferring the awful drive up 5?)

@Roger Vi, given your vantage point of the rapid development of Everett, I'd be curious to know if these many new establishments seem to be doing good business? I'm not trying to challenge you or suggesting they are not. I'm just genuinely curious if all of these new business seem to be expanding AND selling as opposed to just expanding. I keep hearing about all the development Everett is experiencing and would like to go look around. But you having seen it on a day to day basis would have a much better idea than I'd get in a snapshot day trip. Thanks. 

Hello BP. I just joined yesterday and was wondering what type of comments newbies could contribute that would be of value. I have posted one discussion so far and found the replies very helpful. I don't want to be somebody who just reaps the rewards without contributing. To those of you who have contributed many times, what sort of comments do you find useful from newbies?

Thanks,
Dan

Wow, I am really impressed with your willingness to help. As I was writing I kept wondering if I was posting a question that had been asked so many times that people were sick of answering it. Thank you all for taking the time to delve into your thoughts. 

@David Clinton III and @Benjamin Christensen, you mentioned that one might change their preferred strategy over. At this time, I'm thinking I would like to first establish a few buy and holds. Once I have that going, I'd like to start flipping. I've been doing Habitat For Humanity for a while now, and feel long-term involvement has been a great first step in learning how to rehab (It's also a good networking opportunity, some volunteers have decades of experience). But to David's and Benjamin's point, the experience of attempting both of these strategies will be a great way to determine which (if not both) are for me. And thank you for your idea about the 1031 David, I did not know about that.

@Allen Fletcher, to answer your questions, I want to initially self-manage because even if I end up hiring management in the future. I think it would be a very valuable experience in order to understand what management does. (to your point, @Garrett Diegel) My consideration of property far away is not my first choice, but I think a better investment for me at this time, financially. I have accumulated savings from almost 20 years of stocks/mutual funds/working/frugal living that I could front a down payment significantly higher than 20% in the potential areas I mentioned. I do not want to put 100% of my savings into this, so I am also factoring in retaining some savings as well. So these areas outside of where I live would give me a lot of leverage in terms of less borrowing needed.

Yes Benjamin, n-plex was meant to mean some number of multiunit property. I could say triplex or 4-plex or duplex, but in reality I think the opportunities that present themselves may determine the actual number more so than my initial vision. There is also the possibility of living in one for my first n-plex, which has it's obvious benefits for somebody who wants to start out self-managing though the likelihood of finding one in my price range is not as high in my goal destination. So the question I must answer is if it is what's staying in western Washington worth to me? Is it worth giving up the opportunity to live-in/self-manage my first n-plex?

So guys, it stands as a mix of answers as to whether I should buy my first property in my area. And that is ok because people have different approaches and there is no "right" way. I appreciate all of your thoughts especially in that it was my first post. My plan is for now to keep on looking local, but not to take other areas off my radar. I am definitely not somebody to do something impulsive, so I am setting my goal as to purchase a property by the end of the year more as a way to check my natural over-analysis than to satisfy a need to do it now. I do really appreciate your comments though. I hope to pay it forward to BP in the future. Thank you.

A follow-up question, if it came to buying in a different area, how crucial would it be to live in one of the units for a while, given the valuable experience of self-managing one's first unit? I really would like to remain in western Washington (north of Seattle), but do not want to be so rigid that I refuse to consider other options.

Hello BP. Like many (most?) of you I've been enjoying the podcasts for a while and am now officially joining the community. I would like to purchase a buy and hold n-plex and like many first time buyers, have spent a great deal of time learning about buying properties....but...have yet to buy a single property. Realizing the value of taking action for first time buyers, I would very much like to do so, soon. There is one factor that is particularly creating an analysis paralysis for me that I wanted to present to the forum. That factor is location. I feel as comfortable as one can be who has never done this with researching a potential property within a given location, but I feel stuck on selecting that location in the first place. I realize that "a good location" is different for every investor. Therefore, I am not asking you what is a good location. Instead, I would like to present my scenario and get some feedback as to how I can narrow down an area. This is a question about my thought process.

I'm considering whether I should/can live in the area I buy my first properties. Currently I live in Bellingham, WA. I like it and am in no hurry to leave. But at some point, I would like to would like to settle in the northern Seattle metro area: Bothell, Shoreline, Kenmore, Edmonds, etc... Currently, this market does not seem like a wise choice for a first time investor looking to purchase a buy and hold n-plex reasonably soon (average home 500k, on the market 9 days). This leads me to think that I should look to buy outside of where I want to eventually live.

So the most obvious places are more affordable areas within a day's drive of Bellingham: In WA there is Vancouver, Tri-Cities, Pullman; in ID there is Boise, Meridian, Moscow, Coeur d'Alene....obviously there are many more options, and these are just within that parameter of doable day's drive from Bellingham. Technically, every city in the country is an option.

I'm excited to start researching properties, but I feel like my location needs some focus. I imagine there are probably many forum posts that ask "what location should I buy my first property in?" Since that is a complicated answer, I'd like to ask instead for ideas about a process I can use to narrow down my location. Am I being to quick to give up on finding affordable property in northern Seattle? Am I being to slow in buying property outside of this area? If I'm already looking outside of the area I live, does it really make a difference if it's somewhat close to me? I.e., if I'm pretty firm on wanting to eventually settle in western WA, does it really matter if my property is in Idaho vs a state much farther away?