All Forum Posts by: Justin Frank

@Marty Sprong i would be interested if there was some equity or some way to add equity to the purchase. Let me know when you Get more info. 
justin 

@Gabriel Graumann

Thanks for sharing your story. 7.5% return isn’t bad at all. Especially given the fact you had partners to split with, Covid to consider, and you are in a high price market where people bid up and over pay for most things. I say nice work. We are currently flipping a home in Tacoma. Numbers look good, and things are going smoothly so far. Let’s hope it continues that way and inventory is still moving in mid July when we are ready to list. 

@Aaron Nelson

After I sent the message to you I had that exact feeling you just mentioned. You truly do need to be selective and smart about your purchases in any market. Let’s just say we need to more so in the PNW 😏

@Account Closed

I completely understand that Washington state is very tenant friendly. With that being said, I try to look at the positives of the market. As @Aaron Nelson mentioned, we have a very diverse and strong economy which is very important and I personally feel our tenant base is very quality. I don’t want to jinx myself and/or sound as if tenants elsewhere are all bad, but I do truly feel that most of the PNW has very quality and maintenance free tenants. It’s rare that I have had any difficulties or destruction of property from my tenants. This could be look, or good screening but I also feel that part of it is just the quality of tenants this area houses. There are positives and negatives in all markets. Just have to decide which ones you are willing to work with and which ones you aren’t. I do know a lot of folks complain about the west coasts landlord/tenant laws. There are a lot of very successful RE investors out here. It’s not all bad 😀

@Aaron Nelson

Good points Aaron. Though, I do somewhat disagree about the upside potential for investors. I think you really have to get down to the microeconomics of Washington state to find the areas with significant upside. We were hoping to purchase a primary residence in issaquah but just can’t justify paying $1mm+ for an outdated home built in the late 80s, 90s. If you want to invest in the PNW you have to really know the market. Parts of Tacoma are still great. Other parts are tapped out. As stated in my last post this is all an option and relative to your goals and capital available. One thing I completely agree with you about is our diverse and rather strong economy. Doesn’t get much better. The only downside is that the high paying tech jobs are part of the reason homes are selling for $500/sqft or more. Love where I live but I am very very selective on my investments here. Thanks for the comment Aaron. 

Hi @Larry Murrell

Washington in general is a great place to invest. I am from the Tacoma area. You can make anywhere a great place to invest. It really just depend on who you know, how much capital you have and what your investment goals are. In my personal opinion most of the PNW is very over valued which makes it very difficult to find cash flowing properties. It’s not impossible to find them you just have to be patient. To me I find that the Seattle area is best suited for folks who have excessive amounts of dollars and can place those dollars in properties and be happy with 4-5% returns. As stated earlier there are great deals to be had anywhere. They can just be very difficult to find in places like Seattle. Again, this is all relative to what your goals, wants, and needs are. Hope this helps. Feel free to reach out to me with any questions. 

@Audrey Burke

I think a coach is a great idea. I would just be very clear on what your needs/expectations are from a coach and compare to what they can or can't offer. I wouldn't go in expecting that a coach will automatically make you rich or successful in the REI space. I started investing a short time ago and I dove right into the deep end and purchased a lot. There are a lot of assets I purchased without any criteria or knowledge in place. I just wanted to purchase real estate and I found myself following a lot of other individuals criteria and not my own. This is a great way to learn but it is always a great way to make costly mistakes that are very difficult to get out of. Real estate is Slow and transactionally it is very very expensive. A good real estate coach or partner can help you avoid a lot of potential costly mistakes so I say it is worth it if it fits with your goals and budget. I am not a coach but if I can offer you a bit of coaching advice I would say to try your best upfront to be crystal clear on what you want to invest in and what your criteria is (focus). This is much harder to do than it seems but it is very important. There are so many different niches in REI it is very easy to get distracted, interested in everything, overwhelmed and then you will just be spinning your wheels and traveling nowhere. I hope that helps a little bit.

@Angela Sutton @Scott Hasselbach

I am in pierce county Washington. Pretty close to you guys. I ride my bike in the north bend area quite often. Love it out there in north bend. 

@Elijah Miller

What would your long term plans be with the property? I would look into what else you could do with the property long term. 34 units will just never produce a lot of income so the max value of the property will always be fairly low unless you happen to be in the path of development progress and could later sell the land as a prime commercial location. With the little amount I know about the property the price sounds ok. I would Ask yourself if this property aligns with your future goals or not. May help Answer your question. I think this would be a tough property to catch anyone’s interest as a group venture. It’s just too small and with not enough equity/growth potential and with not enough cashflow. 

@Kelly Beasley

I will have to disagree with some of the folks on this post. When you don't have much to work with upfront sometimes it is necessary to go all in with the hopes of building some capital to then invest in other assets. If you are investing $50k and making $1000/mo that you can put right back in your bank account I would say you are doing pretty well. This would be nearly a 25% COC return and for me I would be happy. The questions I would be asking are: how sure are you that you will get $1k/mo? do you trust your manager/operator? what is the property worth upfront? what will it be worth after 5 years of operations go well? is this a stable property or Is this a value add property (this can significantly increase the amount of equity in the property which would be very beneficial for you)? what are the long term plans for you and your partner: can you take a buyout option after a given period of time, or if significant value is added to the property can you guys go for a cash out refinance and take your money out of the project and just let it cashflow? What are your goals/wants in the project and can you get those goals/wants out of the project?
To me for the amount of money invested the return sounds great. With that being said I know nothing about the properties location, condition, current value, potential value, etc....... If I were you I would be researching how likely it is that you will get $1k/mo and I would also be looking at how much you and your partner can increase the total value of the property.