All Forum Posts by: Jason Barnett

Just noticed something in your original message that I didn't cover in my first response. If you're looking for a good duplex then you should try to find one in an area that has a high % of owner-occupied housing. Rents seem to be better for those kinds of properties.

Originally posted by "tasigurl":

Demographic and Housing Market Data for Camas, WA:
Census Data Camas Clark County Washington
Population 18,334 345,195 5,790,538

Useful. Renting apartments is something of a numbers game. The larger the (renting) population, the larger your potential customer base. See below.

Originally posted by "tasigurl":

Area in square miles 42 732 62,976
People per sq. mi. 439 472 92

Only moderately useful. Areas with higher population density will be more open to the idea of multi-unit buildings. Lower population density means tenants can afford to be more picky.

Originally posted by "tasigurl":

Median Age 35 34 37
Median Family Income$67,871 $53,108 $44,655

Only moderately useful. My rule of thumb is that I want yearly rent to be 1/3 (or less) of tenant's income so they can afford the housing. Again this is a numbers game so you want to know what % of the population will be able to afford rent in your area.

Why is this only moderately useful? Because (in my experience) renters tend to be people that earn less than median household income. High income "renters" seem to buy condos for the benefits of ownership.

Originally posted by "tasigurl":

Civilians 47% 47% 47%
Armed Forces 0% 0% 1%
Not in Labor Force 23% 24% 26%

There are some subsidy programs out there for rental units for members of the armed forces; these programs pretty much guarantee that you will receive your rent (I don't participate in these programs, but I have a friend who does so I don't know the name of the programs off the top of my head).

Originally posted by "tasigurl":

Education Levels Camas Clark County Washington
K-12 21% 25% 25%
High School Diploma 16% 17% 16%
College Graduate 11% 9% 12%
Post Graduate 6% 4% 5%

I don't put a lot of stock into this information, but there is probably a positive correlation between level of education and homeownership.

Originally posted by "tasigurl":

Real Estate Market Data
Camas Clark County Washington
Total Housing Units 4,620 72,081 1,133,691
Average Home Price $265,194 $203,225 $227,377

Useful. The average home price will give you an idea of how much cash you'll need to invest in order to own X number of properties. Comparable sales for the specific market is more important though; I've seen cities where you can move three blocks and there is over $100,000 difference in price.

Originally posted by "tasigurl":

Median Rental Price $589 $618 $467

This is critical information if you plan on buying apartment buildings. Know the rent for your area, know the number of units in your building, and determine what your ROI will be at a given purchase price.

Originally posted by "tasigurl":

Owner Occupied 77% 64% 60%
Rental Units 18% 31% 33%
Vacant Units 5% 5% 7%

Critical information for measuring supply and demand for certain types of housing.
- Low vacancy rate means high overall demand
- High owner-occupied means good market for rehabbing
- High rental % tells you this is a renter's market

Originally posted by "tasigurl":

HomeGain Agents 73

I have no idea how valuable this information is... do you like HomeGain Agents? :wink:

For quite some time now I have been thinking about writing my own property management software for my properties. Unfortunately life gets in the way and I haven't been able to do this. (Actually I could have done it, but it would have taken away from my other more PROFITABLE ventures) So now I am here to get some opinions from people about what is already available.

Currently I am considering buying a package called LandlordMax. It's a very reasonable $147 and looks like it might do what I want. Anyone have any experience with this software?

Anyways, I am really looking for a program with the following specs:

- Reasonable license. I don't mind paying for the right to use the software if it's good quality, but I don't want something that will put too many restrictions on the number of properties that I can manage with the software, the number of companies that I can manage, etc.

- Extendible. I want something that I can customize to suit my needs and to let me do the things you didn't think about. My past experience has shown that open source projects (usually written in PHP or Java) are great because you just look at the source code and modify it to do whatever you want. However, I might be willing to use a closed-source program if it has a lot of solid tools to customize reports, manage mailing lists, create web pages and so on.

- Continued support. It would be nice to buy in to a program that already has a strong user base, but this isn't necessary so long as the developers are actively maintaining the product.

- Non-proprietary data storage. I want to be able to easily export all of the data into a new tool if that's what I want to do. XML-based data storage is good for this. So is text data (CSV). So is any open source database.

- Web enabled. This isn't a must-have feature for me, but it's the direction that I'm going and it would be nice if the program integrated nicely with a web front end of some kind. Major bonus points if this is integrated to the design of the property management software (e.g. written in PHP).

In short: win me over with superior features, a reasonable license and reasonable pricing. Anyone have any suggestions?

With this much spread you are in luck. Here is what I would do:

1. Get a 90% 1st mortgage and a 10% 2nd mortgage for the house. Interest rates, terms, etc. do not matter, just get the $170,000 and get it quick so that the house does not go through foreclosure.
2. IMMEDIATELY after you close you will re-finance the property with a HELOC (Home Equity Line of Credit). You use this mortgage to pay off the higher interest 2nd mortgage and presto, you have a no-cash-down house with a ton of equity. Good for you.

If you decide to go this route then it is critical that you get pre-approved to do this with the bank that's going to give you the HELOC.

The best way to get this is to talk to some other local landlords. Go to a Real Estate Investors' meeting and someone will be able to get you that information.

I haven't bought anything from David, but I heard him speak one time over at REaudiotips.com and he gave some good tips in that interview. At the end of the day he didn't quite sell me on his program though...

Good for you! Glad to hear that you can buy the first house with all cash. If you've got that kind of money saved up then the best way for you to start out might be short sales / auctions. Cash talks in the investment property world and you can negotiate much lower prices for a quick cash settlement.

Rentals = long term play, but you need to make sure the net income on the property is good (rents less management expenses, maintenance, taxes, utilities, etc.)

Short sales = long / medium term play, you make offers to the bank that has the mortgage on the house... you offer all cash and try to get a larger discount on the price of the house... key to deal is getting house at large discount from market value

Auctions = same as short sales, except you submit bids to the owner of the property (whoever that happens to be)

Rehabs = medium term play, the keys are you need to know what the average quality house in the neighborhood is like, you need to know what your rehab costs are to get up to that standard of quality, and you need to make sure that comps in the area leave a nice profit margin.

Flip = short term play, lower profit margins and not really the way to go if you have cash to do the deal yourself

HELOC = Home Equity Line of Credit

You already received most of my advice... but I'll add this. If you want to look at resale value then you really need to know what the market rents would be for the property. You would want to include a market rent for the area that your business will actually occupy as well (since it provides value to you). As a rough estimate of value you can add up these rents and multiply by 10. Better yet, why not ask a realtor to do comps in the MLS and be a buyer's agent for you? Just be sure to get an investor's agent that understands "cash flow", "market rents", and "return on investment" and you'll be set.

This is an older home (as you might guess from the fact that it has a boiler system for heating). I found a floor plan from the auditor's website and here it is:

Now I am no expert on floorplans, but... I think areas B and C are the porches for the house and I don't want to run ducts to them. You probably couldn't do it even if you wanted to, because this house has stone walls.

That leaves areas A,D,E,F. There are two stories in this house and A/D/E/F are all living / indoor areas. 2nd floor E used to be the summer sleeping area so it has lots of windows to let the wind blow through. We think 1st floor F used to be another entrance to the house, but a previous owner took out the door and filled in with wall window.