All Forum Posts by: David Stone

Investment Info:

Single-family residence buy & hold investment in Montesano.

Purchase price: $50,000
Cash invested: $20,000

Live in the heart of Montesano! Conveniently located between Beacon Elementary and Monte High, this charming craftsman features refinished hardwood floors, a large welcoming front porch, and sits on a huge corner lot! With so much charm, this makes for the perfect home!

What made you interested in investing in this type of deal?

We love single family homes, especially ones in this area of Montesano!

How did you find this deal and how did you negotiate it?

We found this deal on the MLS. We were initially under contract with a house on the west end of town. We put an offer on this house, were out bid, but the home came available after a failed inspection. We went all-in on this nicer property in a better area and on a larger lot for $80k. After the inspection, we ran our numbers and figured it was worth $50k to us. We offered and the sellers accepted!

How did you finance this deal?

We used cash from a private money investor and paid them back though a cash out refinance.

How did you add value to the deal?

We leveled the post and pillar foundation, painted the inside and out, refinished the hardwood floors and re-plumbed the entire home (it was leaking sewage).

What was the outcome?

We made the home safe and rent-ready and now rent it for $1375 a month.

Lessons learned? Challenges?

When we refinance the property to pay off our private investors, we came up short due to a low appraisal (we thought it was low and they were using foreclosure properties with winterized plumbing as comps). We ended up refinancing another property (our second investment, the McCleary house) to cover the difference and pay them off (and make them happy!) :)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We purchased this home using Premier Realty Oly Pen

Investment Info:

Single-family residence buy & hold investment in Elma.

Purchase price: $34,900
Cash invested: $30,000

Right in the heart of Elma, this neighborhood home has been tastefully remodeled inside and out! The open floor plan features 4 bedrooms, an updated kitchen, and spacious living area. Enjoy the convenience of being walking distance to many of Elma's amenities or stay home and enjoy the large fenced back yard and covered front porch. Either way, you won't be disappointed!

What made you interested in investing in this type of deal?

We were living in an expensive (at the time) home and wanted to invest in real estate. My wife found a home at a reasonable price ($40k) in the town she grew up in and we decided to go for it!

How did you find this deal and how did you negotiate it?

We found this house on the MLS and obtained an unsecured loan from a bank for $35,000. We put in an offer for 34,900 and the bank who owned the property accepted!

How did you finance this deal?

Unsecured loan from a bank

How did you add value to the deal?

We put on a new roof, new siding, fixed rotting floors in the bathroom, renovated the kitchen, leveled portions of the home's post and pillar, added new carpet and paint throughout inside and out.

What was the outcome?

We made the place safe and rent-ready and it now rents for $1425 a month.

Lessons learned? Challenges?

We lived in the place for over a year before we figured out we could borrow off it's equity (we thought the purchase price was it's worth)! This was our real first investment. Check out my blog for more details on this rehab/hold project!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We purchased this property with the help of a real estate agent from Olympia, a friend of an acquaintance. Fortunately, shortly thereafter we began working with the best real estate firm in Grays Harbor: Premier Realty Olympic Peninsula, Inc.

Investment Info:

Single-family residence buy & hold investment in Mccleary.

Purchase price: $25,000
Cash invested: $25,000

Remodeled inside and out, this open-concept home features three bedrooms downstairs with a large master bedroom upstairs. Enjoy the large, partially fenced front and back yard or take an easy stroll to the nearby park and restaurants. With easy freeway access and only 20 minutes to Olympia, what is there not to love!

What made you interested in investing in this type of deal?

It was a distressed property for a cheap price.

How did you find this deal and how did you negotiate it?

We drove past this FSBO for a year while contacting the owner on and off trying to structure a deal. It was offered at 45k and after many failed attempts to acquire the property for less, we finally offered 3 options (all cash and 2x owner finance options each with variable money down and purchase prices). The wife of one of the owners responded and said they would take the low cash offer.

How did you finance this deal?

Private money (private investor took cash out from a heloc on their primary home)

How did you add value to the deal?

We painted the outside, put on a new roof, and completely renovated the inside (previous owners did drywall, flooring and kitchen already but didn't want to proceed any further in rehabbing the property)

What was the outcome?

The home is safe and rent-ready. We now rent the place at $1460 a month.

Lessons learned? Challenges?

We ran out of money from our private money investors about 75% of the way through the rehab and had to move in to the property and finish the rehab (although we were living in a live-in flip and rented that place out). Check out my blog on BP for the full story!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No, we bought off market ourselves FSBO.

You could ask Brandon Turner, it's from his book Managing Rental properties :) It's vague for a reason because I can't spell out every situation that could lead to an applicant being accepted or failing except for something like a credit score number. I take the totality of circumstances in making a decision on the most qualified applicants who met the minimum qualification standards but the credit score # is a hard number I can draw the line on.  (my old standard stated "Applicants must have suitable credit history as determined by landlord" before I changed it... both are vague)

True @Kevin Sobilo, Great points! We have a credit score minimum but also take into account factors such as delinquent accounts, amount owed to past debtors, type of debt (medical we don't weigh as heavily). In this current situation, the couple had multiple delinquent accounts and owed over $4,000 in past consumer debt. This reflects in their credit score. I believe having a number to base decisions off of makes it easier to be "equal" when it comes to multiple applicants. Our minimum standards state "Applicant must exhibit a responsible financial life as determined by landlord."  We do accept no/lack of credit because some people choose not to put themselves in debt and we think that is great (we do require additional security deposit)

I appreciate your input on this as it is true that vetting tenants is not 100% cut and dry.

Perfect, got the reassurance I needed.  I've denied joint applicants based off one having a poor criminal history but for some reason the credit score felt a little different. Thanks!

Hi, I have a couple who applied for one of my units. I have not had the best gut feeling about them from the beginning.  After running their applications (background check, credit, etc.) everything has come back satisfactory (a few exaggerations made on the pre-screen like claiming $800 a month more income than actual but nothing horrible) except for ONE applicants credit.  Our minimum credit score is 600 and they fell about 50 points below (also showing delinquent accounts, multiple 30 days late).  The other applicant meets all criteria (just above the 600 mark).  Am I justified to deny the applicants based off one of their credit scores alone or should I justify with multiple/another reason.  Thanks for the input :)

Awesome!  Thanks for the options everyone!  I will definitely be getting in touch with some people...

Hi, my family and I just moved south of Denver from Washington State. We had a great loan officer there who worked with us in obtaining conventional financing on investment properties where most lenders made the process incredibly difficult and wouldn't account for all of our rental income/properties.

We are looking for a new loan officer in the area who has + referrals from investors

We will be purchasing our primary residence in the next year

Thanks!