All Forum Posts by: Wayne Prentiss

Hi Taye, We have something similar going on right now. I always try to start from a place of "hey, can I help this tenant out, and make sure I'm taking care of my needs, too?" If you could get started renovating on one side of the duplex, consider if it would make financial sense to extend them that 3 weeks on another lease, but raise the rent to match the $700/month equivalent (or more) that you are losing now. Then I'd put in 2x (or more) escalation in rent if for some reason they want to stray over 3 weeks. Assuming this rental is in California, where you are, be aware that I don't know your (rumored to be) oppressive landlord laws, so be careful whatever you structure is a) legal and b) enforceable. Good lease contracts can be your friend! It is probably worth it to this tenant to pay more for that extra 3 weeks than move twice. They win, you win. Cheers!

Ah, should have mentioned that I used King County as an example above since you indicated you lived in Auburn. Each county has its own web site.

 Hi Yuki,

Going with a narrow interpretation of your question, I thought I'd shoot a quick reply about research. One of the issues I'm guessing you may be hitting is finding data about the specific parcel. If so, go here (in King County):

http://gismaps.kingcounty.gov/parcelviewer2/

Then, you may be trying to figure out how to get in contact with the owners. Go here:

http://info.kingcounty.gov/Assessor/eRealProperty/...

(Please note the nasty legalese about commercial use, I leave that to you and your attorney to interpret.)

I hope that gets you down the path a little bit further.

Cheers,

Wayne Prentiss

If you want to take advantage of the research that big insurance companies (and more important, their actuaries) do to calculate the risk of such an event, any easy way to do this is to price earthquake insurance. It isn't perfect, but the premiums give you a feel for the "extra cost" of doing business. As other for mentioned you'll have a lot less of other problems: frozen pipes, snow removal, broken AC (in many cases housing doesn't have AC), etc.. It's all about what risk/cost you are used to. We choose not to insure against earthquakes, and I've been through three major ones on the west coast in the last 25 years. We live in the Seattle area now and love it. It is hard to imagine living anywhere else in the US than the Pacific Northwest, but it isn't for everyone!

Garret, good for you, what a great time to do it! What kind of work are you looking for, specifically? I work in tech, and can make some suggestions depending on your industry.

@Tyler U.

Tyler, good question. My suggestion is that you be as direct and factual as possible while giving the most notice possible "as a courtesy". I'd go with a letter that has points such as:

• Thanks for your business
• Your lease is up on June 30 and we will not be renewing it
• We wanted to let you know as soon as we made a decision so that you'd have plenty of time to look for a new place
• As a reminder, your security deposit is $Y, which will be available to you under the conditions of the lease a, b and c

I'd keep it pretty simple, and don't worry about justifying your decision. This is your business, so it is your right to do what you want as long as it is ethical and legal. If you really feel you have to explain in a later discussion, I'd lean toward, "We are looking for tenants that will put less wear on the property with their pets [pet owners are not a protected class]. You aren't paying pet rent on any of your 3 animals. Pet rent would be $35 per animal with an additional $300 non-refundable fee up front, I assumed you wouldn't be interested." If you really don't want this tenant, and are worried she'll jump at the pet rent, increase the number to $100 per pet, or whatever...

Tyler, I hope that helps. We've got rentals in Tacoma, too, and people seem to have a thing about moving in pets without checking... However, as soon as we find out we've found it effective to confront it ASAP. We have several rentals were we are willing to have pets, and we've got tenants paying pet rent. They are happy, our cashflow is up, and they are more loyal (theoretically reducing turnover). Best of luck, sir!

Victoria, this is a very interesting question. I'll try and pick out a few items I'd recommend you consider, and I'll give you some assumptions I have.

My assumptions: a) you are buying in the Costa Mesa area of California, b) you are using all-cash to buy the hope, presumably because you feel it is safer, c) you are buying a single family home (might answers below might change a bit for a condo).

So...

• It sounds like you are looking for some ratio or variable that describes liquidity. There isn't one in real estate that I know of, and in fact, I'd ask you to consider if you are asking the right question.
• Nearly every piece of real estate, especially single family homes, will sell if the price is low enough. Your #1 factor in making sure you can escape relatively unscathed from what you are planning to buy is to get a good deal in the first place. An old real estate adage is "you make money when you buy, not when you sell." Instead of trying to find a special metric, get a great deal relative to your local market. This is your solution to the "if I must sell" scenario. Or at least the best I have to offer.
• If you decide to rent, you are probably setting yourself up for some pain. Especially if you are using all cash. Your rate of return relative to what you could get on cash in many, many other markets will be terrible in Costa Mesa. To illustrate this point, you can look at Trulia affordability maps: http://www.trulia.com/local/los-angeles-ca/type:rental_prices_affordability. If you toggle on rental prices versus home prices, you'll get some feel for the market. Then go to another market not on a coast. You'll see how much more rent you could get for  much lower priced house. If you buy your home for cash, then rent it out, you are assuming appreciation will save you. It might, it might not. But it feels a lot like gambling to me, and I'm a terrible gambler. :)
• I hope you'll take this in the spirit intended, but it sounds like you are trying to keep all your options open. I don't know if that is possible. If it were me, I'd consider using some cash, not all cash to give yourself liquidity and a way to invest elsewhere. I'm sure we can find plenty of people who will disagree with me!
• Best of luck!

Welcome to BP! We also invest in Tacoma rentals, congratulations on your first deal. Unfortunately, I don't have an accountant down there (we live up north in Bellevue).

Welcome to BP from another Seattle-area Eastsider, Julian!

 Tarl, thanks for taking the time to share your experience. Best of luck! As a buy-and-hold Tacoma investor, I appreciate what you are doing for the community!