All Forum Posts by: Account Closed

In some areas, Section 8 has specific requirements for terminating.  For example, in the Seattle area, you need to apply for a permit for terminating Section 8 and have to meet specific criteria for terminating.  You should review what the section 8 process is in your specific area as it may be more than just a letter.

Hi Andy,

If you're just looking for exposure for your product to sell it, as an alternative to providing full staging, one of the things you could consider is loaning out bar and counter stools with tags on them to select homes during open houses.  It may be that if they are the only furniture in the property, they get noticed more.  We recently sold a property in Kirkland that had 200 people through the open house on the weekend so there's some potential for decent exposure.  You could look for upcoming open houses on a site like redfin and see if any match your style and offer to loan them for the open house period.  We're doing some industrial style rehabs on rentals in central district now and we don't stage the property but would be happy to showcase some of your stools during an open house. 

I don't use any of the 1%, 2%, 50% rules. Investment property is an investment so I evaluate it the same way I would any other investment. If I buy a property, what ROI (aka cash on cash) can I realize on the money I have to put into it and how does that compare to what I could earn if I put my money elsewhere? One of the things I do is plug all available multi-families in my target areas into a spreadsheet and I can quickly see a rough estimate of how much cash I'd need to put into the property, closing costs, rehab costs and how much I could expect to make after paying all expenses and allocating for vacancies, capex, etc. This will produce an estimated cash on cash for every property available and I can see which ones would likely yield the best return. In the end, I'm really looking for properties that will yield the best return and meet a few of my other core criteria (target zip codes, max purchase price, non-commercial)

I think most people, at least in the Seattle area, are pretty familiar with tools like Zillow and Redfin that provide incredibly useful real estate data.  There are a few additional research tools that I use that may not be as well know that I thought I'd share.  Would love to hear of any other great tools out there.

www.rentometer.com - compare rent for a specific address to the surrounding area
www.rentlingo.com/where-should-i-live - heat map for desirability of specific areas

www.areavibes.com - provides info about desirability of areas.  Not as granular as rentlingo but has specific categories you can filter on

www.zilpy.com/rentalmarket - market trends across the country

www.seattle.gov/dpd/toolsresources/Map/default.htm - building permits info to see development / growth in a specific area (Seattle only)

If you are in an area that has had steady appreciation and you don't care about paying down the mortgage You could do an interest only loan. Another option if you don't plan to keep the house long is to look at a shorter term like 5 years to drop your interest rate. Both will likely require you to refi again in 5 to 10 years and rates could be higher than you can afford so I'd only recommend them if you're planning to sell the home before the rate period ends.

I think the level of risk with speculation is relative to the timeframe you're talking about and what options you have to deal with issues when they arise. You can certainly make a good profit over the long run if you are under no pressure to sell at any time and can hold out until market conditions are good to sell in the future and ride out any drops if they do happen. Think about what you would do if things did change. What if Seattle got saturated with units and rents dropped. Could you still be ok on either if you were getting 300 less per month? I tend to buy for both btw. I look for properties that are under market so they have some built in buffer. I try to look for a property that has something desirable. Location is the biggest but maybe it's a standout from others in a similar price due to size or style, etc. I also look for break even or a bit of cash flow to start as well. If things go south on the rental market I could cover a small drop or if it got really bad could refi into an interest only. If the values dropped I would just ride it out.

I'm with @Joe Splitrock on this one.  If your time is limited, focus on where you can realize the most value for your time.  Learn to do simple plumbing work like installing a new toilet, sink, valve, etc.  Also learn to do simple electrical like replacing plugs and switches, moving an existing outlet, etc.  If you need to add plumbing or work done to your panel, get a professional.   Next, I'd prioritizing tiling, installing cabinets and floating flooring, leveling floors as things to learn / tackle.  After that, painting, demo, trim work, minor structural changes like moving a door or removing a non-structural wall, etc.  One thing we don't bother DIYing anymore is taping and mudding.  It's an art and the pros can do it at least 10x faster and better.  We'll hang the drywall and then just have them come in and do the finish work.

Like every profession, there are good apples and bad apples.  Rather than judge by profession, you should judge by whether they qualify financially and how well they will care for your investment as best you can.  Do they meet your income requirements?  Many owners require tenants to gross 3x monthly rent and have verifiable income.  If they do not meet your requirements then don't rent to them.  It's much easier if you establish specific criteria up front and stick to it.   You could also require that they haven't been late or missed rent with previous landlords and left the property in good condition.  Ask for the previous landlord / building name for last two years and get the numbers for them yourself and verify.  Don't take the numbers directly from the application.  I find that the best approach is to treat it like a business and use a minimum set of criteria so you're not second guessing yourself on whether you're making a good choice or a bad choice.  You're just using guidelines you set out and if they aren't good enough, you adjust and improve them over time.   It will also protect you from discrimination claims if you have a clear set of criteria that you make public and adhere to.  

Your county should have the number of units listed on the tax records.  I'm in King County in WA for example and I can go to King County parcel viewer, lookup a property and see how many units it is registered as having

A few things to consider: 
1. does the panel in the house even have enough to support a hot tub?  Hot tubs typically take 50amps and if the house is older, there's a good chance the panel needs to be upgraded and a line needs to be run to the hot tub by an electrician which could run a couple hundred to a thousand dollars
2. Hot tubs need to be on a level surface such as concrete or gravel so the tenants will have to dig out and bring in at least 2-3 inches of crushed gravel to provide a level surface
3. Are they buying it new and having it delivered?  It's easy when someone else delivers it but they're 400-600 lbs empty and the tenant will have to rent a vehicle, bring a bunch of friends and have a place that will accommodate a hot tub when they leave if they are going to take it with them.  There's a good chance it gets left behind (maybe you're good with that)
4. Who pays the water and electric bills?  There will be increased expenses.  Electricity would probably be about $20 more a month.  Water would depend on how well they kept the chemicals balanced and needed to empty it and start fresh if they didn't

If it were me, I'd check on #1 as the tenants may not have accounted for this and the cost for #2 and it may just change their minds anyway