All Forum Posts by: Josh Setterbo

Nice to meet you Abe! I’m also a transplant and have done well with house hacking with Airbnb to start out in seattle. Replace your living expenses is step one.

Let me know if you do consider Airbnb, me and my fiancé and I could give you some tips!

Hello BP,

I am looking for an Independent Insurance Broker to bundle some services with to decrease our operating costs. Does any one have a good recommendation for this? 

We will acquire our 2nd property in Seattle in early May, in which we will househack, and rent our current primary as 2-unit Airbnb out of a SFH.

We also have a Triplex in Texas and 2 SFH rentals in Oklahoma. If we can bundle all properties that would be fantastic.

Thanks for your help,

Josh Setterbo and Sydney Mann

Gusto Living LLC

Investment Info:

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

Purchase price: $200,000
Cash invested: $50,000

Contributors:
Sydney Mann

2 x 1BR/1BA as long-term rentals
1 x 2BR/2BA as vacation rental/Airbnb

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

Income potential, investing in my home town following Hurricane Harvey. Many of the hotels/motels are still not in operation, so this property presented a nice opportunity for short-term rental. Long-term rentals are also scarce in Rockport following the hurricane.

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

Via Redfin and our realtor Cindy Kranzle. Negotiated 40k under asking.

How did you finance this deal?

Conventional, 20% down

How did you add value to the deal?

Updated electrical panel and simple plumbing updating. Generating additional income with short-term rental. Cosmetic upgrades.

Lessons learned? Challenges?

Managing repairs as an out-of-state investor. Working with property managers and delegating more tasks than prior properties. Offering under asking and for what we saw as an appropriate price for us.

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

Cindy Kranzle with Redfin in the Coastal Bend

Update:

The TREC purchase agreement was used by our realtor and our realtor confirmed that the seller should have not executed any lease without our (the buyer's) consent. Our realtor is going to get us copies of the leases if we want to protest them or change them.

She could not define our options as she stated that any sort of legal action would require an attorney, just as you said @Fred Heller. Her scope would be to work something out between the seller, the tenant, and us (the buyer). Whether it would be to renegotiate the lease or modify the transaction in general.

My gut tells me that this was done by the current property manager/selling agent as a way to secure a management fee from a new lease prior to sell. The seller from what I can gather is having health issues, secondary to two different hospitalizations in the time since we have been under contract. It is my impression that they are very motivated to sell post-Harvey.

With this being said, does this give us grounds to renegotiate some terms of the contract/price. Is anything that you would recommend for next steps? The closing date is likely to be this Friday. Thanks again for your input!

Thank you all for the input. We will review the contract and check with our realtor regarding the TREC agreement. 

Guy, we did have a termite inspection which came back negative for active infestations and there was evidence that some prevention measures were taken. 

I will update after I find out more information. Thanks again!

Hi BP,

We have a triplex under contract on the Texas Coast and about 1 week from close the current property manager leased out the second unit. When making an offer and having it accepted, 1 of the 3 units was leased.

The triplex was damaged in Hurricane Harvey and it was stated that the seller was not wanting to lease the property until it was sold. Now we understand that we cannot change the lease until it is up in November. A few questions as we are buying this long-distance and haven't seen the property.

1. Does this sound strange and perhaps unethical? We cannot set our own lease until the current leases expire.

2. Should this have been cleared with us first as we are under contract and close to closing?

3. Is this a situation that we could terminate the contract?

Thank you so much for your input!

Josh Setterbo

I concur with Brian’s statement as I currently live and “house hack” in White Center as of a year and a half ago. 16th Ave is having an influx of new businesses and home values are continuing to rise at a great clip. I agree with the rough areas, but as far as crime it is probably not much worse than the average of Seattle. 

Title* not titular 

@Mihir Bhimaraju Awesome story! I saw the blog titular and my girlfriend and I are doing a similar Airbnb rental in Seattle. We've been up and running for about 2 months and for the summer should exceed our expenses in the earnings we receive. I would like to know more about the tax advantages you've been able to use. We currently are saving receipts for cleaning supplies, furniture, appliances, etc. 

Keep up the good work and I hope you acquire your next property. We are honing in on our next one as well. 

We have the same plan with the house hack and are in the process of getting estimates from plumbers and electricians. The home is in White Center and we are hoping for continued appreciation, however being able to supplement our mortgage with rental income is our first objective. Once the kitchen is installed in the basement, we will live in there and rent out the upper 3 bed 2 bath. 

The plan is to live close to free so we can acquire down payment funds for the next property as we both continue to work full time. We are doing the addition as rental grade (not high end) as we plan on being out in 1-2 years. 

So in a nutshell we are in the process of doing exactly what you are thinking about doing!