All Forum Posts by: Derek Heinz

Thanks, both of you. I like and appreciate both of your suggestions! I'll follow up eventually once I make my next move. 

Happy New Year, everyone!

Getting right to the purpose of my post, with all the relevant context: I’m 52 and living near Seattle. I have a good FT job in education administration, but I want to retire asap, focusing on RE (so, not really retiring, but you get the idea). I have a primary home and a rental near Portland, OR. I’d rather not sell my primary or 1031 the rental if possible. In fact, I’d like to turn the primary into a rental and then house hack in a multi-unit.

Two of the biggest challenges I face are that I’m not very liquid at the moment, and the Seattle area is extremely expensive. So, I’d like to bring in an investor. I’d live in and manage the property, fixing it up as needed. Which reminds me that I should mention that I’m not opposed to living a not-so-luxurious lifestyle in the short run. The investor would front most or all of the down payment, but in theory he, she or they would not have to think about it from there. I’d take care of everything. So, that’s all the context.

My question is this: How could we structure an arrangement that would make sense for both my potential partner and myself? I realize we’d probably want to bring in a real estate attorney, but I’m assuming there are models in place that are probably well-established for such a partnership that I know nothing about. Any guidance is greatly appreciated!

Thanks, Ran, Chris and Sherief! I've actually been considering the DADU approach for a while, so your advice is affirming. I will absolutely check out that website, Ran, so thanks for sharing. It's my understanding -- though I admit to having done very little research -- that the new laws won't go into effect until 2026. I'm not sure where I heard that, but it's in my head now. Is that true, to your knowledge? 

Hi, BP. 
I've posted about my situation in the past, but here's the gist: I have a home near Seattle in a growing suburb. It was a fixer-upper when I bought it 5 years ago, and I have about 500k in equity in it. I also have a rental in Vancouver, WA (a Portland suburb right across the Columbia River). It is doing well and cash flows about $350 in a developing neighborhood. I should add that I'm 50 and have a decent job, but I'm burning out FAST! I want to retire soon.... 

My primary home outside of Seattle is next door to what has become a meth house. And I'm hoping to rent out my house in the next few months. It would be hard to sell my house for anywhere near what it's worth given the state of the house next door. The cops are there often, but nothing changes. That's a whole different story.... 

Cutting to the chase: I'm in contact with the owner who, until recently, was unaware of what is going on in her house. She is an older widow and generally very nice person. She is now very concerned and interested in selling to me. I proposed owner financing, but she still owes $185k. I think she must have tapped into the equity often. I have a HELOC, but I'm in not in love with the rates. Still willing to consider, though. Also willing to taking equity out of my primary with a refi.

If I were to try to buy it, I'm not sure it would pass any inspection. The roof is in horrible shape, and the house in general is barely intact. If I were to somehow buy the property, I'd likely have to tear down the "house". From there, I'd like to put in a decent modular and an ADU. Basically, I'd like to get two units on the property, and of course I'd be willing to house hack, at least for a while.

I think I've covered all the pertinent details. Now I'm just hoping you all can offer some much-needed, highly valued advice! Please share away; I'm all ears. 

Thanks, Sherief. I definitely didn't know about that 100-mile condition! I have a HELOC, but I've been reluctant to use that because of the current rates, but I may have to....

 I don't know who would tap out first... lol

Thanks, everyone. The feedback has been solid, as well as affirming in that it all falls in line with directions I've considered. As a relative newbie to this world of real estate investing, it helps to know that I'm not thinking too crazy and to realize that maybe my instincts are solid. Dave, I had begun the process of getting increasing my HELOC, too, so that's extra affirming! I neglected to mention that the owner of the property next door is the ex-mother-in-law of one of the tenants, and I don't think they pay much at all in rent. I think she's very demented/senile, and he's taking advantage of her. Anyway, I REALLY appreciate all of the time and thought you all shared to provide me with invaluable insight and support! This is one of the many reasons I love BP.

Cheers, all. I have a primary home in North Bend, WA (30 miles east of Seattle), a fast-growing town. I also have a rental in Vancouver, WA with good tenants and equity in a hot market. I'm wondering what to do next. Oh yeah, I'm 50 years old and am hoping to retire in the next five years if possible. Doing so will largely depend upon what I'm able to do with real estate. I have a good job, but it requires a lot of time and responsibility, and I'm burning out fast. I've considered selling my primary. I could pull out between 300 and 400k from that. I've also considered renting it. That would cash flow to the tune of about $700, maybe more. One other problem, though: The home next to me has become the neighborhood meth house, which is clear to anyone at first glance. I mention this because it will absolutely affect my ability to sell it for top dollar and possibly even to rent it out. I'm considering waiting them out before selling or renting. The cops are well aware of what's going on there. The occupants rent, but the owner is out of state, very old, and uninterested in what's happening there. I'm hoping the occupants will eventually get arrested, but I've hoped that for three years now.... The house is in terrible shape, and I've reached out to the owner, telling her I'd like to buy it. So far she has been uninterested. Also, I'm not very liquid right now after putting a lot of money into a new roof, siding project, and other home improvements. I've considered renting it out and house-hacking, possibly using an FHA to get in. Any other thoughts are greatly appreciated!

Now I definitely understand, and this is extremely helpful information! Thanks so much, David. I'm thinking this is exactly what I will do.