All Forum Posts by: Kim Stuart

Hi all,

After listening to a few of the webinars, I am curious into the process for of buying 2 or 3 bedroom properties and adding square footage and extra living space.  More specifically, increasing square footage and adding a bedroom or adding a new unit, whether exterior or interior.  I am looking to get into my first property in September and at first i didn't even want to consider 2 bedrooms.  After listening to a few webinars that have talked about adding square footage and adding an additional bedroom or adding a new unit to extend the house and starting off small before scaling out to make sure you get a feel of how the rental process works, I want to consider 2 bedrooms with the possibility for future expansion.  I would love to hear any and all success stories, failure stories, and book recommendations to learn more about the process, architectural design considerations and costs involved.

Regards,

Kim

@Gary Gustafson thanks for this response!  It's very encouraging to hear the success coming from somebody from the same county who understands the market I am in specifically.  I agree, the numbers have to work, from a high level view that seems to be the tricky part.  When was your most recent 1-1 property investment if you don't mind me asking?  Have you found 1-1 numbers that work within our current value or are they properties you have held on to for a good chunk of time?

@Dion McNeeley oh that is a good idea with the craiglist add. One thing I have wondered (just from a marketing perspective) is where the 2-1s and 1-1s search for properties. I have seen many 2-1.5s and higher for rent on the MLS, not anything much below but CL would be another source for that that I'm sure the younger college student or transient would more likely go to.

P.S. if you are attending the next meet up in tacoma next month, I would love if you could share more on the Yelm market.  I believe you said you had some experience there...or Roy right?  I am curious how those are areas are because over the years the military bases have significantly expanded to those areas.

Again thanks for your quick and thorough responses!

@Aaron Nelson Thanks again Aaron!  I knew that hilltop in general was a pretty desirable area right now, but then again, most literature and research usually doesn't even include anything less than 2bdr/1.5 bath so its encouraging to hear a response from someone local that has more experience with out market specifically.  Also, thanks a lot for being active with all of my posts and always providing quick, thorough, and unbiased, insight.  

@Aaron Nelson @Alissa Engel @Thomas S. @Will C.  Thank you all for your perspective on rent in relation to tenants.  

Alissa I loved your perspective on tenured tenants getting that sense of entitlement.  I had never even considered that they are more likley the ones to bring unwanted pets and subletting their units because those are two things I personally know that people have done once theyve renewed an initial lease, typically because their finances accumulated over a year or 2 allow them to afford a pet or to afford amenities to allow for subletting

Aaron thank you on your perspective on not being able to dictate what you want to pay for.  As someone new to this, I never told myself I would let the tenant dictate the price.  however, I did want to make the price "competitive" to ensure that I got a tenant.  You gave me more insight that "fair pricing" has nothing to do with what the tenant deems is fair, but the opportunity that I create based on market value.

Thomas and Will, thank you for making me see the tenant as the asset or liability, rather than the unit itself.  The unit is going to be a reflection of the tenant.  If the tenant is the liability, the unit is the liability.  If the tenant is an asset, the unit is an asset.  That actually was pretty powerful for me to understand.  I have been focusing a lot on location, finding the great property, assuming good people live in good locations.  That definitely is not the case and I had to remember that.

Thanks to all!  This forum has opened my eyes up to so much and I truly thank everybody for taking the time to give insight, perspective, experience, and knowledge!!

Hi all,

Question for Washington state investors. I was wondering what your experience has been in attracting tenants for 1bdr/1bth units, preferably in Pierce County, but not limited to?  Any luck?  I have seen a couple of triplexes and fourplexes that are 2bdr/1bath main unit and 1bdr/1bth sub units.  I would say they would be great for college areas, possibly even downtown or north tacoma areas where lots of people are taking traveling short-long term jobs.  I am curious as to what your experiences have been with them in the area?

Regards,

Kim

@Thomas S. Thanks for your response. So I guess I have a follow up to your response.  I agree with you 100% not to get into the business to be emotionally attached to tenants and that end game your focus should be maximizing how much your property is valued at.

My question to you based off that is in your opinion, based off your experience, when dealing with inherited tenants, do you view them as assets or liabilities?  On one hand, I would think that if they have lived at a property for an extended period of time, have an attachment to it, they are more willing to be less of a hassle and would do a better job at taking care of your property.  Or on the other hand, they could feel attached to the previous owner and feel entitled to the agreement the original owner made.  So I see your point both ways.  So is there a way that you screen existing/inherited tenants that differs from the way you screen new potential tenants or do you ever give priority in taking care of inherited tenants, not from an emotional or friendly standpoint of being fair, but from the business perspective of providing good customer service will ultimately result in more responsible tenants or that are more long term?    

@Dion McNeeley Making that comparison of rentals in the vicinity is such a good ideal.  Being visual is one of the most effective strategies to making a point.  Couple that with the "over deliver under achieve" concept of expecting a specific amount of rental increase and leveraging that by valuing it higher than what you expect is a great idea as well.  I actually need to research the military installation and surrounding areas are a lot more.  I live near JBLM and have noticed how much more military has expanded out to lacey, olympia, yelm, roy, spanaway, graham, etc.  Thanks for the input!

-Kim

@Colleen F.  Thanks a lot!  That clarified my question!  I definitely want to make sure I am screening the right tenants.  If they are good tenants I want to do everything I can to keep them, but at the same time do my due diligence to get what the property is actually worth in its current market (aka the price I will be purchasing it for).  I love the gradual step concept as well, I had not thought of that.  That might actually factor in that if they did leave and I raised the price, I might not get an immediate new tenant or one that I have properly qualified and liked.  I want to keep the good ones.  If the current tenant has rented that unit for awhile, they might have an emotional attachment to it so me pulling one behind their back wouldn't be fair to them nor would it make my reputation good in the area.  Thanks a lot for your response, that put a lot of things into perspective!

-Kim

Hi @Ali Boone!

Thanks for your response and all of your insight! I will be soaking up that bunch of knowledge for a good little bit!!

And no, I don't want to be evil and raise rent just to gain a positive cash flow.  However, when I see properties in north Tacoma that are being rented for $1500, my initial assumption (before probing the listing agent for 100 questions) is that the owner of the property acquired the property a good little awhile ago. And when I look at the property history and how much it was purchased at, it reflects that.  So for example, if they acquired the property in 2007 then $1500 for rent probably reflected the market at that time.  Fast forward 12 years later, the tenant may be locked in at that $1500 price because it reflects the owners purchase price.  So if the value of that property raises 100k in 12 years, then me renting it out for $1500 is going to be a huge hit on my because my purchase price was 100k higher than the owners.

So my question more or less was how to consider that when acquiring properties that may have existing tenants locked in at a rate or factoring that in with what the MLS has the unit rent price listed for to account for the price at which I will purchase it for. I still may not gain anything positive even if I am able to rent it out at a price that reflects the current market price, or I may have to put a slightly higher down in order to get a positive cash flow, but I would want to know how to factor that in.

Hope that clarifies!

-Kim