All Forum Posts by: Jack B.

@Adrian Chu

I agree with the Seattle comparison to SFBA. As an IT professional, my salary is higher than all but the Senior Engineers at Google. And for a quarter mil you can still buy a good house within 30 minutes of Seattle. SFBA a million buys you a shack.

Most economists are in agreement that we should be heading into another downturn in 2018. This seems to hold true from my own personal observations as well; there does appear to be a downturn every few years almost like clock work.

But that is still more than two years away. Does it make sense to buy a couple more now and deal with the downturn or should I pool cash and wait?

Problem is the cash is losing money sitting. Maybe I should split the difference? I can buy two more with cash on hand, not counting reserves. This would provide me with four rental properties and a primary, all of which cash flow and appreciate well. Of course, the first three I bought during the down turn do the best but these others would still be making me money.

After that though, I could just pool a couple hundred k while I wait and if there is a downturn, I'll buy in again with even more.

Watching a video of Phil P. of freedommentor.com, I was surprised to hear him say that he too used to think it was better to have 24 properties all highly leveraged instead of one or two paid off properties that cash flowed well, and that he knows better now.

The only thing that immediately comes to mind as a good point about this is that the more properties you have, the more expenses you also have when it comes time to renovate, and if your goal is just FI, you can get that typically with one or two paid off rental homes and call it good, while living a simple existence with little hassle.

But maybe there are other reasons for this, or is he wrong?

I'm looking at a 10 unit apartment building in WA that might be a good deal. What exactly does the financing process for commercial look like vs residential? I've done residential up to this point but I hear that anything over four units is commercial. Does that entail a higher interest rate, if so, what are the typical rates? Higher closing costs, if so, by how much typically? I take it for commercial the evaluate the rents of the property not just my income.

Being in the Seattle area, the deals are all but gone since the market recovery. While I would love to move my portfolio and I to Florida someday due to the excellent price to rent ratios there, until that time I may end up buying in Spokane, WA, which is about a 4 hour drive from me.

The price to rent ratios there are more favorable, and you can meet the 1% rule fairly easily. Only hang up is the drive time. Just to make one visit is a days worth of driving round trip. Trip is expensable, but the TIME...

It is still at least close enough for a weekend trip once a year to check things out, but if I had to turn a place, etc. it would get really ugly real fast, and property management is not really reasonable in price, taking 10% off the top of gross income, which ends up being more like half of my net profit for merely being available in case something happens. If said property management can do handy man stuff etc. then we may have something. I'd be willing to pay a stipend that they get even if they don't get called, but when they do get called, their service is already paid for, they fix the leak, etc. and all is well. If I get someone presentable enough I can even have them show the houses during vacancies.

Anyways, while that sounds ideal, I think I just answered my own question; four hours drive one way is too far. Maybe I will stick to Tacoma and possibly expand into Bremerton. 

That reminds me of the time a tenant I had an appointment with called me to cancel claiming she got called into work. Minutes later she called and left me a voice mail. On said voicemail she thought she was talking to her boyfriend, because she was laughing about making up a story about how she got called into work and how I bought it, etc. Little does that little Einstein know her voice mail was played aloud for weeks at my office making fun of her.

I forgot to mention the people who email me: "I have two evictions, and need you to come $200 lower in rent because my baby daddy just went to prison and I can no longer afford rent at market prices and support our 1 year old."

Me: Delete....delete...delete.

Man I thought I was the only one.

Family asks if I can move the like new washer and dryer to the shed so they can put their in from storage. Ummm. no.

Same family (guy with no teeth, a felony and a drug misd.) asks if he can put up a fence in the front, tear down the kitchen wall, etc. My response was, I think you might be more happy buying a house than renting one from others, with all your remodeling ambitions and all.

Have had people ask to pay me in appliances as long as I discount the rent for them. Gee thanks buddy...

Do you accept Section 8 is my favorite. That and the people who want to argue with me about no dogs policy. What about a small dog? Is it a dog? Well, yes, but...Sorry, no dogs, I'm sure you can find a place that does allow your dog though. Good luck to you...

I think a lot of these people forget that considering I charge well below market rents, people are beating down my door to rent for me and since I'm the owner, they can pound sand.

My favorite with contractors besides getting them to show up is: them showing up late, after going silent for a week before the appointment, and wondering why I'm not there after a week of trying to confirm with them but not getting a hold of them. Oh, my cell phone died. Great, what about your email? Did that die too, because I've been trying to get a hold of you forever.

Then they sit there for an hour waiting for me to arrive instead of beginning measurements, etc. Then they forget some of the measurements and we have to come back to get them and then go back to the store. Then they take 3 hours to try to install a dead bolt lock on a new door they are installing and can't figure out how, then tell me they need to post pone the job because I cost them an hour while they where waiting for me.

Good way of thinking about it. Other place was not as nice anyway, and made the offer on the older house in a better area. Would still have made the same decision as the other one was in a C or D neighborhood.

I refocused my efforts in Tacoma where I have a rental currently (paid off). While I would have liked to by in King County due to appreciation, the cash flow just isn't there. The places I'm looking at today (3) should be good. One is  in North Tacoma and looks turnkey.

The others are occupied but at the right price and modern enough that they need little work once empty.