All Forum Posts by: Patrick Nickell

@Patrick Nickell Hi Pat, welcome to BP! I’m just curious how you arrived at your rent rates? Where is this located, are you in the Vancouver market or are you moving up toward Seattle? A 4 bed/2 bath duplex unit in Western Wa should be renting for $2k+ unless it’s really old, out of repair, or very rural.

It’s in Aberdeen. Almost a 100 years old. I looked at it today and it would conservatively need $75k in repairs. It’s a pass for me. The rates are what it was renting for prior to it being listed.

0 Votes

Vancouver, Washington

Quote from @Jared Boundy:

Hi @Patrick Nickell and welcome! This seems like a pretty good idea, but some of your math is weird. This is an odd way to phrase it: “My old rent I was paying + New Rental Income -Total Monthly Expenses = + $216 Monthly Cash Flow”

But you get to the same result:
If you simply compare your current rent to the new “cashflow” of -$1079/month, you’re spending $216 less per month (not cashflow, but spending less than you currently pay in rent). And if you decide to move out and rent your unit, the cashflow basically increases by $950/month. Seems wise simply from a monthly savings, but then consider the fact that you’re building equity in the property and it’s a really good investment. Good luck!

I doubt there’s much value in forming an S-Corp just to rent to yourself, otherwise we’d be hearing people here in WA doing it all the time (though if you happen to have an S-Corp, I understand that you can rent space to your Corp for monthly meetings just like if you were to rent a conference room).

Lol, yeah the way my brain does math is definitely different but thankfully I arrive at the same place.

1 Vote

Vancouver, Washington

Quote from @Bjorn Ahlblad:

@Patrick Nickell welcome to BP! To me that looks like a good buy. If you were not owner occupying the rental revenue would be 3300 and give you a respectable cash flow-right? So you are not minus at all. At least that is my take. All the best!

One unit is substantially smaller and rents for $950. To maximize income I would live in that smaller one. It's a 4/2 & a 1/1

0 Votes

Vancouver, Washington

Hi everyone. I am new here so please be gentle. I have been doing a TON of research and am new to the world of real estate investing. I have consumed a ridiculous amount of information and at this point everything is hypothetical. I will be buying a multi-family property somewhere in Western Washington (NOT Seattle and probably not Snohomish or Pierce Counties either) in Nov/Dec 2023.

I ran things through the calculator and knew that things weren't going to look good as I will be living in one of the units. I am currently talking to an accountant and attorney about forming an S Corp and renting to myself as a way to possibly get a better go of things from a year-end tax perspective. This is really a separate issue but chime in if you are familiar with Washington State.

I am looking at a property that is $285K and for this example let's say I won't negotiate that down. I will show all my math below.

Mortgage @ 7.22% (P&I, Escrow, MIP) - $2234

Rental Income - $1650

Vacancy - $165

Repairs - $165

Cap Ex - $165

Monthly Cash Flow $-1,079

I will be handling my own property management since I live on-site.

So obviously a bad deal on paper but here’s the lens I view it through:

Seattle Rent I currently pay: $1295

Rental Income: $1,650

Total Monthly Expense on Duplex: $2,729

My old rent I was paying + New Rental Income -Total Monthly Expenses = + $216 Monthly Cash Flow

Ideally when I am ready to buy the rate will be lower than 7.22% or I will just refinance when it is or when my very trusted lender & broker recommends.

My long-term plan is to live in this duplex for 1-2 years and make improvements that will add to future rental value. I am not looking to flip. I really want to build up a rental portfolio that will eventually replace my income and more. I am VERY well versed in slow, and strong growth (aka grinding). A deal doesn’t have to be perfect on paper for me as my metric is what my current reality is versus what I know that it can be.

I welcome your sage advice, thoughts, and ideas. Thank you for sharing your valuable time!

2 Votes

Vancouver, Washington

All Forum Posts by: Patrick Nickell

Patrick Nickell has started 1 posts and replied 4 times.

Post: Owner Occupied Duplex - Real World Situation - Can't Really Template

Post: Owner Occupied Duplex - Real World Situation - Can't Really Template

Post: Owner Occupied Duplex - Real World Situation - Can't Really Template

Post: Owner Occupied Duplex - Real World Situation - Can't Really Template