All Forum Posts by: Jack B.

Quote from @Bill B.:

I’d swap out the ones with the most equity. There’s no need to “replace enough debt for 1031 rules”. You have to spend more than net in sales, and reinvest all the cash. The amount of debt doesn’t matter. 

What I’m saying for example have 2 x $400k properties you owe a total of $200k on and want a $800k lakefront property. They don’t care if you borrow $200k or bring $200k in cash. In this example I’d ask the lender what the cheapest rate is. 15 year fixed, 5 year arm, whatever. With over 50% down but over $190k loan I was quoted 6% on a 15 year investment loan. That’s 2.4% extra on the $200k or $400/mo. But you use the extra income to pay it off.

reach out to @Dave Foster if you need help. He’s super helpful on BP or he has a book you can read in a day that will answer most questions…. https://www.amazon.com/Lifetim...

 That's good information, I googled it and it appears that this is indeed a common misconception. So I could theoretically just add cash to the replacement property in addition to the equity from the relinquished property and come out legal. That would certainly help with cash flow.

What about renting out regular houses in regular neighborhoods? Are these in demand for ABNB? A lot of my houses are in the burbs, but within 30 minute drives to Seattle or 30 minute drives to Mt. Rainier. One of my colleagues has multiple ABNB's and says all but one are in regular neighborhoods and most of his guests are just trying to avoid staying with in-laws when visiting, that type of stuff. He said it's just as profitable as waterfront property. I only need about 2.4K per house to break even, 2.7K when you add utilities. That's per house. 

I don't think it's a good idea to give notice to my good tenants right now to do this, but next vacancy I might try furnishing one on the cheap like I did the last one and seeing how profitable it is. Heck even a $250 cleaning fee for a whole house will be good for me. Multiply that by 10 houses for example, 4 stays per month on average. That's an extra 10K a month I make to do janitorial work myself...

I recently started renting out the MIL at my lake house. It has been a cash COW!!! I have several other houses throughout the area, but they are not lakefront/waterfront or anything. So I'm not sure if they'll get as many bookings if I try to ABNB them as is in the locations they are. It's doubtful, when I rented via ABNB myself, I booked lake houses...not typical houses with no views, no waterfront, etc. 

So I'm tempted to sell and 1031 my other houses into more waterfront property. But the interest rates are not making that a favorable thing logistics wise considering my rates on each property are 3.625%

In theory if I keep the replacement property purchases under 600K, with the equity from each house I could put down enough and replace enough debt for 1031 rules that the mortgage payment would be 2.5K a month. At the least, I'd break even. At best, I'd make 2-3K profit each month. 

Thoughts? If I can pull this off, replacing my regular houses with more lake front houses, I could pull in 500K a year profit...Just gotta give up the sweet interest rates for now. I could at least do this with my under performing properties. Leave the ones in high appreciation areas where they are at. There's 3 houses specifically I'd like to sell at the least and do this with. Maybe 7 total to do it with at best.

My properties our outside of Seattle, not in the city limits. I only lease month to month, and do so with the "right to occupy ends after month of tenancy".

The laws for good cause evictions have become confusing. This is a wall of text that I don't understand. It seems like if they don't have 4 violations of the lease, I have to provide them a 60 days written notice to get them to move out, even on a month to month tenancy. Can anyone clarify?

https://app.leg.wa.gov/RCW/def...

Quote from @Bob Stevens:

Quote from @Jack B.:

6 months vacant, lowered price twice, $400 under market, still can't find a tenant for one of my rentals. Have about 300K equity in this one. 

Type of tenants it attracts are not great. Everyone want's to apply but they don't have the money. Lot's of people want to run a day care out of it, but don't want to pay business rent.

I had no issues filling 3 other vacancies, even in more rural areas in the last few months. 

The area this house is in is declining I feel, based on the types of applicants I get. I get a ton of applicants but few qualify credit or income wise. Lot's of qualified ones who say they will apply don't. 

I'm left with the choice of holding through the summer renting season or selling it and 1031 exchanging to another house or two. Trouble is, my interest rate on this house is 3.625%. I'm looking at 7-8% rates to buy one or two more rentals as replacements...and they will bleed money even when rented out.

So hold or sell? Right now reading my own thoughts here, it seems like selling and replacing with other properties will lose even more money and I'm better off just holding.

 Fire your PM co, they seem to not have a clue what they are doing. Tenants are the easy part, I get 20 calls a week, take govt tenants, 

 Congrats on getting 20 calls a week for section 8 tenants who have no other choice but a small pool of section 8 landlords in Cleveland, lol. Seattle is the 6th most expensive housing market in the country, not Cleveland Ohio where houses are 20K 

https://www.redfin.com/OH/Clev...

20 calls a week is a joke. I get 100+ inquiries a week just for for this house. The problem is almost nobody qualifies for a 650 credit score or income 3x the rent in the area this house is located. Because this is such an expensive market, few renters have the income or credit to afford to rent here anymore. Those who have the credit and income buy. Hence why the four houses that turned over recently, everyone of them bought a house. 

6 months vacant, lowered price twice, $400 under market, still can't find a tenant for one of my rentals. Have about 300K equity in this one. 

Type of tenants it attracts are not great. Everyone want's to apply but they don't have the money. Lot's of people want to run a day care out of it, but don't want to pay business rent.

I had no issues filling 3 other vacancies, even in more rural areas in the last few months. 

The area this house is in is declining I feel, based on the types of applicants I get. I get a ton of applicants but few qualify credit or income wise. Lot's of qualified ones who say they will apply don't. 

I'm left with the choice of holding through the summer renting season or selling it and 1031 exchanging to another house or two. Trouble is, my interest rate on this house is 3.625%. I'm looking at 7-8% rates to buy one or two more rentals as replacements...and they will bleed money even when rented out.

So hold or sell? Right now reading my own thoughts here, it seems like selling and replacing with other properties will lose even more money and I'm better off just holding.

I'm looking at 1031 exchanging one of my houses in Seattle to Florida as a vacation rental. The houses are nice and prices are relatively low. But it's 1 hour away from Orlando, doubt that's going to ABNB well. So question is:

1) How far outside of Tampa or Orlando can one buy and successfully ABNB?

2) What companies do you recommend for managing the ABNB since I'm out of state?

3) What's a typical % of rental revenue that the management companies for this plan will generally charge.

Quote from @Bernard Joseph S.:

Quote from @Jack B.:

Quote from @Mohammed Rahman:

Hey @Jack B. - agreed there's an inverse relationship with rates and prices, but just a heads up having 4 months of tenant vacancy is usually a strong indicator that there's something off about the way you priced out your rental based on the market it's located in. 

 Not sure how long you've been a landlord but in 15 years I've learned that winter time is the hardest time to find tenants. I've had hundreds of applicants. None have met the screening criteria. Seattle has become a dump.

 Not saying anything you haven't heard already but why stay? I left all my NYC investments for similar reasons and never looked back. Unless Seattle changes dramatically, not the least of which is political, it will remain just like NYC, a dump. 

Buy in the path of progress. Don't hold in a place of decline. Just my thoughts.

Oh trust me, I intend to. I've been looking for a new home for some time. In fact I wish I had moved to TN in 2021 when I had the chance. Low rates made it a great time to move, and rental properties in Nashville would have retired me already.

Quote from @Mohammed Rahman:

Hey @Jack B. - agreed there's an inverse relationship with rates and prices, but just a heads up having 4 months of tenant vacancy is usually a strong indicator that there's something off about the way you priced out your rental based on the market it's located in. 

 Not sure how long you've been a landlord but in 15 years I've learned that winter time is the hardest time to find tenants. I've had hundreds of applicants. None have met the screening criteria. Seattle has become a dump.

Quote from @Conner Olsen:

Quote from @Jack B.:

Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.

 A lot of investors I talk to are waiting for prices and and rates to go down. Unfortunately prices and rates work inversely of each other.

 If we enter a recession like we did in 2008/2009 rates should come down. Properties here don't cash flow with such high rates, in fact they operate at a 1-2K loss per month. Add to that declining prices and it makes no sense to buy right now. I could pay cash for houses and cash out refinance them later, but it makes no sense to do so. I had 4 vacancies recently, with one of them approaching 4 months of vacancy and still empty. I sleep better with equity in the properties and cash on hand...

Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.