All Forum Posts by: Michael Seeker

In prepping for listing an apartment, I decided to shoot a difficult shot using the 0.5x zoom on my new iPhone.  After seeing how much better it turned out, I went back and redid every shot with the 0.5x zoom.  It's unbelievable what a difference this makes.  Here is the same exact shot taken with 1x and 0.5x zoom.  If you take a lot of photos for listings (or any reason really), this can be a game changer!

1x

0.5x

@Art Maydan - This sounds like a huge project and definitely a lot of repair work after finding the pipes.  Depending on the construction type, you may be able to go at the pipes from the exterior to save some money/hassle.

As far as finding the pipes, I would recommend getting a thermal imaging camera.  I just purchased the FLIR One gen 3 which attaches to my iPhone and it works great.  Running hot water will make it very easy to find and trace the hot pipes and if the cold ones aren't running directly next to the hot, you may be able to spot where they are with the camera as well.

@Nick Monge - your description could put you in a wide range of neighborhoods.  I've driven up and down Bellevue to various places and there are some spots I would describe as OK and some I'd describe as terrible.  If you check out street view for a few blocks in all directions that should give you an idea of what the property and tenant mix are like.

I don't know a lot about rents outside of the higher-end parts of town, but $2200/mo is probably maxed out, if not a little on the high side.  You might check the leases for concessions such as no/low deposit or first month rent incentives.

Awesome illustration, thank you for sharing!

This Harvard market cycle article from 2016 has more detail around the cycle and timing of it.  I think we're going to run less than 18 years this time around because we've come out of the last downturn at such a frantic pace.  Should be interesting to see what the next 3-5 years holds!

https://www.extension.harvard.edu/inside-extension/how-use-real-estate-trends-predict-next-housing-bubble

@Adrian Rae - If there are no comps and it's a small town then a couple things you'll want to keep in mind:

1. If/when you want to sell the property, you'll likely have no comps and a very small buyer pool to work with.  This is never ideal as it limits your options.

2. Do you understand the demand for rentals in this small town?  When a unit turns over, does it take months or years to fill?

3. Are you self managing?  If not, is there anybody who can do that for you in the area?

I would want look for a very large margin in order to be able to account for these potential challenges.

@Drew Sommers - I know of several investors who purchased property in the West End of Lou and are now stuck with them.  They don't want to own them, they don't make money on them and they would have to come out of pocket to sell them.  There are definitely people doing alright in the west end and making money, but I think you'd have a really hard time doing so without being in town and learning the neighborhoods very well.

These properties do not appreciate and they only cashflow if you get tenants in them that pay and don't move out which can be a challenge.

The numbers will look good on paper, but you should talk to somebody who owns property in the specific neighborhoods you want to invest in and see what their experience has been.  As @Rob Bergeron points out, there are some pockets experiencing higher demand/growth but if you're not familiar with them then you could end up buying a block or two the wrong direction and having a horrible time with your investment.

@Adam Hicks - Not sure which bank you used, but pretty much all of them are doing 5/20 loans. I would classify your current loan as commercial, so doing that work shouldn't change the nature of the loans available to you. Some banks will do lower LTV on cashout refinancing or not even do cashout refi's, but it depends on who you talk to and how you and the building will underwrite.

Go through the agent, if it's on the MLS then the owner has a contract with the agent that requires them to pay a commission. Trying to go around the agent will only annoy/anger them and they're the one who is advising their absentee client on value and quality of offers.

@Eric Graig - that's a great question!  What jumps out right away is that as a lender you do not get to take advantage of many of the bigger benefits of being a direct investor.  Appreciation, amortization and depreciation all come to mind.  I don't know anything about online lending pools, but your returns are probably going to be tied to the risk of the deals the money goes into.  If the funds are going into riskier development projects you might get 10%+, but if/when the market turns these will be the most likely to default.  If funds are going into passive deals, then you're probably looking at low/mid-single digits (unless borrower/deal is questionable) which isn't anything to get excited about.

Have you considered partnering with somebody who operates and a more favorable market or looking at being a passive investor in syndications?

We've got landlordlocks on all of our almost 100 units (probably 200+ locks/handles) and wouldn't go any other way.  The keyless thing is too expensive and prone to battery issues.  The smart key setups are OK, but as far as I know doesn't give you the option of having a master key.  This is fine for a couple units, but if you have any plans to scale, you need a solution that has a master key.

Whatever is lost in a few extra dollars for LLL solution is made up many times over by:

1. The time/hassle saved by having a single master key that gets us into every door on our properties <- I can't stress this enough

2. LLL keeps your order history and can look up anything you may need and resend keys/locks if needed

3. They mail to you and everything can be easily self-installed

They're also a great company and great people to work with.  Their website does suck, but we always call in orders which is easy.