All Forum Posts by: Ian Broadie

As many have said, do both. That being said I know you probably aren't made of money haha I would say from personal experience that it was a mistake not contributing to retirement accounts earlier. I bought my first property at 24 and I did that by saving every dollar towards making it happen, but not having any assets made getting a mortgage and refinancing much more difficult. I'm 29 and own two properties now but I'm redirecting my investments into equities largely to make it easier to invest in real estate. Try to make maxing out your IRA a bare minimum goal every year, then aggressively save the rest for real estate, no matter how small. You're thinking about the right things. When you are ready to buy, consider owner occupying a duplex!

@Marc Estepa Hi Marc! Welcome to BP and WA!

I’m glad to hear you’ve already found Home Partners, I’ve helped a few clients use their service and it can be a great option but it’s not for everyone and it comes with some restrictions. If you have time to chat today, I’d love to see if there’s anything I can do to help you and your family figure out the next steps.

@Gary Abner I'll give you a call!

Hi @Gary Abner! I'm within Gig Harbor city limits and when I started talking about unit lot subdivisions they looked at me like I was crazy. The problem was that nobody had done it before in our area so they just didn't have a procedure for it. The next step was to hire an attorney to guide me through that process and, I hate to admit, I just got frustrated and started working on other projects instead. I'd love to grab coffee sometime, it'd be awesome to help you get it done because I still very much want to do it! 

It's funny reading these posts years later. For anyone who's following, I ended up doing the flat roof! We did a gut job and it turned out the siding wasn't leaking so we mostly just did a lot of interior renovations (still want to redo the exterior). Our mortgage came out to about $2300 and we were able to rent out for $1600 ($1750 now). We estimate our side could probably be rented for around $2400 now so when we move out it'll bring in around $4k+/month

@Constance Chambers that’s wild!! A whole other bedroom being hidden away? I bet that was a shock haha I might have to add your door policy to my showing routine! Congratulations and good luck on finding another great opportunity!

@Kristel Knittel trust but verify - so incredibly true. Thank you!!

Investment Info:

Other buy & hold investment.

Purchase price: $60,000
Cash invested: $60,000

This is a crazy story and even though it's the best thing that could have happened to us, I don't like telling people about it because it's "too good to be true." We bought 3 acres of ocean front property with a SE view of Mt. Rainier surrounded by 40+ acres of county owned forest - just 7 minutes outside downtown Gig Harbor and amenities. This property is easily worth $450k+ and we bought it for $60k because the listing mistakingly said it was landlocked and we were the first to look into it.

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

I wasn't! My wife and I were day dreaming and looking at land to build on in our 'what if' world - but when you see something too good to be true, it's always worth looking into.

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

Just browsing the MLS. The property had gone in and out of contract 3 or 4 times by the time we offered and because it was a bank owned property (and the agent had never stepped foot on it) we offered all the money we had, which was less than half the asking price, however we provided proof of funds, promised a two week closing and eliminated all our contingencies. They had dealt with a lot of BS and we promised to make this simple and painless.

How did you finance this deal?

Savings. We were wrapping up our previous project (a duplex house hack) and had started turning our eyes towards finding another one - our goal was to save up $100k before moving on something but this came first.

How did you add value to the deal?

Investigating! The listing said the property was landlocked, however I knew it's illegal not to have access to your property in Washington (it's just a pain in the rear to make it happen - go through court, lots of time and money). I began looking in the public records to see if anyone had ever started the process by suing for access and, to my surprise, they had. Not only did they, but they had won access and there was in fact a 30 ft wide easement connecting to the county road. Crazy.

What was the outcome?

We bought the property! And it's worth around $450-500k as a buildable lot! This obviously increased our net worth dramatically but it's also afforded us some options we had never considered possible. We just bought the property a few months ago but because we weren't planning on building any time soon we are just slowly putting together plans and we hope to start building in a few years. First we will do an ADU and then the primary structure so we can continue house hacking.

Lessons learned? Challenges?

Always always always turn every stone. The agent had told everyone this property was landlocked - he got that information from the previous owners, who had got it from the neighbor. The neighbor isn't a credible source! I spoke to that neighbor later and he told me he had always thought it wasn't buildable but after showing him the paperwork he couldn't believe it and wished he would have bought it. Incredible.

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

I'm a real estate agent and managing broker at Windermere. I had two separate title companies investigate my findings to make sure I wasn't crazy. Once that discovery was made, it was just a race to the finish line!

Hi @Brenden Mitchum, thank you! You can do it, just be patient and find a good deal so you would have to really mess up for it to go wrong - because I made a lot of mistakes! Also, realize you'll maybe make some big concessions for both of you to be happy but it's really important your gf buys into it all the way or else your kicking a snowballing can down the road. Good luck and make it happen, our oceans need rehabilitating!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Gig Harbor.

Purchase price: $257,000
Cash invested: $18,000

Bought this duplex as a house hack for $257k (around $100k under market value) when I was 25 years old. After renovating it, we had it appraised at $620k in spring 2019. Changed our lives in a very positive way - obviously financially but it brought my wife and I very close and taught us how important it is to improve, even just a little bit, every day.

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

I was adamant about house hacking a multi family for our first home, my wife wouldn't live anywhere besides Gig Harbor. With only 64 duplex's in the city (and less than 100 <5 unit buildings) we had our work cut out for us.

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

Property was listed at $330k, which was a great price. We reached out to the agent within hours of it going on the market, however we couldn't compete with the three cash offers they received within the next 24 hours. It went under contract but we were able to workout a backup offer position. As you can guess, original buyers backed out (major fixer), we stepped in and negotiated it down to $257k with $7k in seller paid concessions. Best thing that could have happened for us at the time.

How did you finance this deal?

New construction portfolio loan from a small local bank (Timberland Bank). Lender initially turned me down after sending a rep to inspect the property - this was due to it being such a bad fixer upper and seeing me, a 25 year old with no experience. I began looking for alternative financing but after getting the price down so dramatically I put together a presentation for the lender and showed that the numbers were so good I would have to really mess things up. They changed their position.

How did you add value to the deal?

Opened up the view, did a bump out, replaced roof, removed some walls, added others, new wiring and plumbing, added a bathroom on one side and a bedroom on the other, fixed up the owner occupied side as if it were a flip and not a rental (cabinets, flooring, drywall, etc) and just made it a place anyone would be happy to live at. Next step is to change it into townhomes or condos - each side should be worth around $500k and rent for around $2500.

What was the outcome?

This created a lot of equity for my wife and I so we could start our lives together on the right foot. Also lowered our cost of living to a point we could live on just her teacher salary. Gained a lot of experience and connections. Learned a ton. Made a lot of mistakes, obviously - biggest one being that I spent too much time on this project (3 years) when I could have done multiple projects. Very happy with the outcome.

Lessons learned? Challenges?

Spent too much time and money on one project, could have been dramatically more efficient. We were building a home and not an investment.

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

I'm a real estate agent and represented myself! Took around a year to find the right opportunity but great deals aren't on every street corner and sometimes you need to kiss a lot of frogs.

BP always talks about building a relationship with your local banks. Do it, it's super valuable.