All Forum Posts by: Account Closed

I've used Cornhusker Bank to finance a couple of properties in Lincoln.  Super easy to work with, portfolio lending so non of the Fannie/Freddie hassle.  I've been happy with them and will use them again when I purchase more in Nebraska.

I use RealtyWorks in Lincoln.  (https://realtyworksne.com/) 

Jennifer and her team are great!  I have another property management company here in Seattle and have used a couple others here as well.  RealtyWorks has done a better job of providing a hands off experience for me than what I have here in Seattle for the bulk of my portfolio.  They manage a couple of small multi family's for me in Lincoln, but have apartment buildings they manage as well.

I wouldn't recommend it.  With rental registration/inspections, the city will be able to crack down on illegal rentals.  Think about it this way.  All legitimate rentals in Seattle are now registered.  If you upset your tenant, neighbor, etc - they could anonymously report you to the city.  Or they file a tenant complaint with the city, not knowing it's an illegal unit.  That will likely get flagged by the city - they do take tenant complaints very seriously.  There are substantial fines with the RRIO program; I'm not sure they've been tested in court yet as this is a new program.   Also, I'm not sure if the city is running any 'sting' programs for unregistered rentals, but I wouldn't put it passed them.  The government already does this for fair housing laws.

From the zoning/land use point of view; the city can make you remove/tear out the components that make it a second unit - yes it's difficult for them to track these down.  I've been told it's done mostly on a complaint basis.

Now think about it from a personal liability point of view.  Image if a fire happened at the property and a tenant was grievously injured or died.  You'd lose everything and possibly go to jail (i.e in a wrongful death case).  

I'm not a lawyer and am not giving legal advice...just offering common sense advice to CYA.  

Unless you have LR zoning on the property, it's not going to be currently allowed.  Seattle does have a Accessory Dwelling Unit rules; however, it requires that the property owner live in one of the units.  There are rumors that the city is going to change the owner occupancy requirements; but my guess is that won't happen quickly.  Seattle doesn't move fast on land use/zoning changes.

If you are in LR zoning, you can convert to a duplex; however, I believe you will need to bring the entire building up to current codes as you would be changing the zoning use of the property.  If it's LR zoning; it would likely be a better use case to tear the house down and build the maximum allowable structure on the land.

I was wondering what had been going on with that place over the last few years.  I drive by that place all the time as I live in the neighborhood.  Sorry to hear about the troubles - glad you got it done.  It looks great!  Definitely an improvement to the neighborhood.

I'm happy with Brink PM.  They are based in Bellevue, but have good coverage in Seattle.  They are a very mature company.  Their fees are fair and they communicate on repairs over the approval threshhold.  

I read many BP posts everyday.  Some posts are informative/educational; some are useless; and occasionally a post will offend/upset me.  Don't get me wrong - I'm not some milquetoast that is afraid of getting my feelings hurt.  I'm a US veteran that has participated in providing the lot of you a blanket of freedom that most don't appreciate.  

I was just discussing a similar concept to my 8 year old daughter - those who achieve wealth, generally take on a ton of risk.  Granted - I realize there are some born with money (not me).  As an investor, I have a factor of 10x debt to the average US citizen....that is why I'm successful - I take risk.  Those who refuse to jump in and take risk live a normal or sub-standard life.  The middle class of our society follow the norm.  The upper class take risk. 

If we move to the homeless problem - it's a completely differently/but correlated issue.  Some people are homeless because of mental illness; however, I live in Seattle and realize that most of the homelessness here is due to drugs and/or an illness called laziness (why work if the city takes care of you).  

I do realize that some people suffer from mental illness and cannot recover...there are numerous government programs that we have all funded for this (they are not effective).  I myself have had some PTSD from Iraq; but I have fortunately been able to cope with it (some of my brothers/sisters have not).  I'm getting sick and tired of the so called 'vets' in Seattle that claim to be afflicted by war.  Most can't even state what an MOS is (civies won't get this).  My point is that 80% of the 'veteran' homeless in Seattle is fake - and I verify this on 3rd ave regularly (I always support my fellow veterans in the NW as we are generally despised).  People like @Linda Weygant don't get it (and have not served)...people like her have not had to deal with returning from war to people like her that hate you and don't want to employ you.  I can't even count the number of times on my hands I've been called a baby killer....it's not true (I've never killed a baby) - but it's the stigma I live with as a veteran in the liberal NW.  

So - to answer the initial question...do I think property investors should "pay more tax to help house the homeless"?  Hell No.  I paid over $250k in federal taxes last year...the only useful spending was on the military/veterans and DoE.  To top that off, the government really screwed my fellow veterans over with mental issue...thus our increasing homeless problem.  "If you give the government a dollar, they will produce a dime."

If you want to know more about veteran homelessness...check out the veteran rock band that sums up my veteran generation issues: 

https://www.youtube.com/watch?v=o_l4Ab5FRwM

I certainly don't wish that people like @Linda Weygant never have to be shot at, nor receive incoming fire - it's not fun (nor forgettable).  What I do wish is that they would listen to and understand veterans (from homeless to successful).  We are people too and unfortunately the majority of the homeless problem (not induced by laziness) is related to mental illness caused by wars in which veterans defended people who look down upon us.  

(I realize that my stat's of homeless to laziness don't match...that's because I live in a Blue state - the stats make sense if you look nation wide)

I love my country and the opportunities it affords me.  I despise those who try to take those opportunities away from me.  

I think it depends on your investing goals.  Some people want/need cash now.  Others are in the 39% tax bracket and don't are trying to limit their immediate tax burden.  If you are in a low tax bracket, your goals should likely be about immediate cash flow.

If you are looking for long term money, then I think it's ok.  I believe it's better to make a tiny bit of money than $0.  I always joke that I only need to make a $1 a month on a rental property her in Seattle to be happy...mostly because I know the tenants are paying down my mortgage and in 30 years I'll own a building free and clear.  In reality, I like to make at least $50 a door per month.  My goal is to have my rental properties show a 'tax return loss'.  Meaning with all of the deductions, depreciation and amortization - my rental properties show a loss on my tax return.  Given my tax situation, I can't use additional passive loss on my ordinary income.  This means I'm building up a large passive loss carryover for the future (i.e. when my tax situation changes or a sell a property).  

Granted I do have some properties that clear several hundred a month per door; but my lower performing properties help offset those to ensure I can maintain a tax passive loss.  

Another strategy to keep in mind is 'equity stripping' (you do need to be careful with this). When my properties start making too much money; it's time for a cash our refi. Why? When you get too much equity in a property, it can become a lawsuit target. So, I take some equity out of properties that get 'too fat' and buy more properties. This does two things; helps minimize my liability expose (in conjunction with LLC structures); and also grows my portfolio.

Obviously, if I didn't have a full time job with good income, my strategy would be different.  But I don't need additional income now...I"m building up my portfolio for later.  So to answer your question; in principle I believe it's OK to own a rental property that 'breaks even'; as long as it lines up with your goals and needs.  I'm sure there are many people that will disagree with me on this point; however, anytime somebody says you have to do it a certain way or your wrong -  they are usually wrong or misinformed.  

I've used Pius on 6 different jobs and have been very happy with them.  I use the shaker cabinets with quartz counters.  I do my own cabinet installs and have been very happy with the cost, quality and communication they provide.  My rentals have awesome looking kitchens and baths that look expensive but are very low cost.  

As with any sub or contractor, I do supervise and make sure I get what I order.  Also, the Pius contractors that install the counter tops always confirm the sink type visually with me, confirm the sink hole count/placement.  Also, I take the time to discuss the counter top installation prior to them beginning - pretty much like I do with any other sub or contractor.

Great minds think alike!  I live in Seattle today and am looking to expand my rentals into Hawaii, specifically the Big Island.  My goal is to have a small portfolio of rentals on the Big Island, so that much of travel to/from Hawaii is a tax savings via a business expense.