All Forum Posts by: Michael Spearman

Hello BP,

I'm currently researching a condo that I'm interested in purchasing as a primary residence. During my research I realized that this building is over 50% commercial space and therefore most banks require 20% down and will not give a conventional loan. I'm pretty familiar with this neighborhood and it's an area that has some development to do before it becomes highly desirable. The commercial spaces below the building are almost all (10 out of 14 spaces) vacant and the ones that are there probably aren't doing too well. I'm wondering what are the risks associated with purchasing a condo in a largly commercial building with possibly failing businesses in it.

The current risks I see are HOA increasing if too many businesses go under and difficulty selling due to weird financing. I'd like to know the risk factors as well as any possible positive outcomes from the commerical spaces succeeding in the future.

Any info or personal experience related to this is very appreciated. Thanks! 

Michael.

Edit: Are there any suggestions for getting information/documents relating to the commercial aspects of this property that would be very helpful in my assesment?

Hey Seattle BP,

I'm seeing many townhomes on the market today that do not have HOA dues. Generally these homes have no common areas but have a connected wall/roof. These are appealing because I don't want to be forced into HOA requirements or pay dues, but I am also concerned about sharing walls with a neighbor without any governing association. I see a lot of posts warning about townhomes without HOA but these posts are pretty old and it's very common now in Seattle. This has got me wondering, what are the "limits" to my rights as a property owner of a townhome? In general, what are the laws/regulations to be aware of before pursuing any townhome properties? Are these laws generally written into a contract when purchasing and will they vary based on the property?

Thanks.

Hello BP forum,

My short term rental property management company has started acquiring customers and we're looking for legal and accounting advice regarding asset liability and STR taxation laws as they would apply to property managers as well as property owners. We specialize in utilizing vacation rental websites such as Airbnb/VRBO to rent out property on behalf of owners and require a contract to be drafted to form an agreement between us and the property owners. Additionally, we would like to speak with an accountant who has expertise in property management taxation laws to assist us in following the proper taxation rules and guidelines. My company is based in Seattle so attorneys/accountant located in this area would be optimal. Any help here is appreciated whether it's a contact, a recommendation or general advice from a fellow property manager. Thanks!

@Edward Seid Not seeing it on MLS portals, can you DM a link?

@Brian Hughes Thanks just messaged you.

@Sherelle Montague I've considered it although I work on the Eastside so commute does make a difference, what areas were you referring to?

I'm looking for SFR and duplex rentals with little to no remodeling that I could house hack in the South Seattle neighborhoods (Columbia City / Beacon Hill / Georgetown). My budget is ~7% down on 500k-700k and this would be my first property. Given these parameters, what numbers would people consider a good rental investment? After calculating numbers on quite a few properties, I consider to be a "good deal" to be: ~7% CAP rate, ~8 yearly CoC ROI, and any positive cashflow (this is total rent after after I no longer live in the property). In the end it seems like not a very good deal after all. I know people are finding better deals than this. However given my budget and location, maybe better deals aren't there. Maybe I'm just not looking hard enough?

Note: For my calculation I'm using the method mentioned here: https://www.biggerpockets.com/renewsblog/2013/01/1... This doesn't include expenses like CapEx or Utilities.

@Jake Alger Thanks for the response. I'd love to meet up and talk about how you initiated your first deal in addition to how you transitioned from to tech to real estate. In response to your comments on the down payment. I know that first time buyers often go for the 3.5% FHA loan but I plan on living in this property only until I can afford my next one. After moving out I would like to rent it out fully (maybe traditional, maybe VR) and at least break even. I don't believe that it would be possible to have any CF if I go for such a low down payment due to the higher mortgage. Would you agree?

Hi BP, 

I'm new to real estate investing and I'm getting ready to buy my first property, however I'm looking for some advice on my plan before I start seriously looking for my first deal. l've decided to look for my first property in the Columbia City / Beacon Hill area near lightrail stations because of the easy commute to the Eastside where I work and the relatively lower prices. 

My budget is around $500k-$600k and I plan to use this property as my primary residence while using the extra room(s) as a VR. I've chosen VR as I believe that, even though it is extra work, it will allow me to generate a higher monthly income to offset my mortgage. Because of my plan for VR I'm mostly looking at:

1. No HOA / apartments.

2. Separate entrance for guests.

3. Near LightRail stations. 

Ultimately my end goal is to own numerous properties and gain financial independence through the cash flow. I read about many people on this forum who are able to do this but I don't see how it's possible in Seattle given how hard it is to find positive CF.

Questions for the community: 

1. What are peoples thoughts on this VR plan? Are VRs actually more profitable that traditional rentals in Seattle? What else should I be looking for in a VR home?

2. Given my preferences, who's a good real estate agent that would show me good deals when they arise. 

3. I'm only 24 but I'm making pretty good money working in tech and have a +740 credit score so and I would like to know if I can get approved for ~20% down payment. Any recommended financial advisors that could assess how I'm looking right now. 

4. I'd love to chat with anyone who made their first deal while in a similar position as me (i.e. house hacking, early 20's, expensive market, ~550k budget, etc). What contributed most to a successful first deal? What were the pitfalls? Coffee's on me!

5. This is my first post here but I've been reading this forum for a while and it's incredibly helpful. What are the best ways for someone with no real estate investment experience to still provide value here?

Thanks.