All Forum Posts by: Garrick S.

Find a new agent. If you’re feeling pressured to place bids you don’t want to make, that’s a bad situation.

Maybe you can ask for a different client advisor within Flyhomes? I just bought a home with them and I didn’t have the same pressure you did. I won the bid on my third offer and I was able to do it entirely on my own terms!

Felt like I needed to pipe in about Fremont since Mike M. beat it up. Fremont is great. I lived there for a couple years. Quick access to Ballard, Wallingford, SLU, Downtown, Belltown, Greenlake, and Phinney Ridge/Greenwood. The actual commercial section of Fremont is a bit on the smaller side, but it has some gems. People there are rather easy going and the community felt rather inclusive to me. 

Nobody is honoring Lenin. Heck, his hands are often painted red. It's placed on private land and it has historically been up for sale for decades. 

That's a broad question to answer without knowing your full financial situation. Probably something best suited for a fiduciary advisor. If you're looking to specifically invest in real estate, however, partnering with a flipper or a developer would most likely result in quicker and more impressive gains. A lot of these developers are buying land for less than $500k, building 4-6 townhouses on a lot for $200k each and then selling each unit for $600-800k a year later.

$350/day seems really optimistic. During the summertime I'm sure it's possible, but the average daily rate is probably a lot less. Plus you need to factor in vacancy. How are the numbers looking for you? I picked an example property in Ballard as a quick case study using your parameters. 

Property: 6706 23rd Ave NW Seattle, WA 98117

Asking price: $799,950

This is a nice looking home that would show well on Airbnb. It's also right near the hotspots of the neighborhood and it's asking price is smack dab in the center of your price range. The listing shows it as a 2 bed / 2 bath, but top floor and the living room can have sofa beds. So, that means you can accommodate up to 8 people.  Using Airdna.co's MarketMinder tool, this property is estimated to have 62% occupancy with an ADR (average daily rate) of $180 which includes cleaning fees.

But, for fun, let's say Airdna is wrong and actually you can get $350 ADR with 62% occupancy. That's an operating income of $6600. Airbnb's tend to have higher expenses than traditional rentals due to the higher management fees and covering all of the utilities. I've found that the expenses usually fall around 60-70% of income. Let's say this home is cheap to operate, as a best case scenario, and use 55% as a rule. So, we have $6600 income, $3630 in operating expenses leaving us a net operating income of $2970. Assuming you paid cash and were able to buy the property at asking, that's a cap rate of %4.45. As a best case, non-realistic scenario, it seems pretty mediocre. If you try to leverage the property at 20% down, you'll actually be losing money each month.

@Bruce Runn this thread has been quite helpful. It started off a bit rough, I'll admit, since I've already invested a fair amount of time and thought into how I can break into the Twin Cities market. Coming up with a plan and having it instantly shattered isn't ideal, but its definitely better than proceeding with a poor plan. Thank you for your insights.

@Amber Gonion You make a great point about finding the hidden potential in properties. I actually do have my eye on a couple properties that look like they would cashflow well as Airbnbs even at asking price. I just have to decide if I believe the revenue estimates I'm seeing by completing some due diligence.

@John Woodrich Yeah, I do not want waste anyone's time, including my own. As I mentioned, your local feedback is valuable. To your point, more valuable for the Twin Cities than national guru suggestions.

@Eric Adobo On the contrary, I do want to hear the truths about RE investing in the Twin Cities. To be fair, your initial comments were not constructive. Few people enjoy humor at their expense.

@Bruce Runn perhaps we have an XY problem here (http://xyproblem.info/). My problem, X, is that I cannot find any deals in the Twin Cities. My first idea for a solution, Y, was to start making offers on properties at the value where they would cash flow appropriately. I learned this method from this site where Brandon Turner said 9/10 offers will be rejected. I'm not suggesting making crazy low offers just to be a jerk, or a "bottom feeder" as you put it.

While I'm surprised to see such a large contrast between the community and the site management, I understand you all have your individual experiences and are sharing them with me. This is to my benefit, and I appreciate it.

Given there's a lot of push back to my proposed solution Y, I'm curious what method are you using?

Thank you for providing your perspective, @Amber Gonion. It is helpful to understand all of the reasons why an agent would not want to submit below asking offers. Your high volume strategy of offering asking price and then making adjustments after inspection is interesting and something I will keep in mind.

I see, in that case I appreciate the information. I was just in Minneapolis a couple weeks ago and the market didnt seem that crazy.  Lots of homes on the market for weeks. But my perspective might be off because I'm comparing it to my current city of Seattle where the market has been hottest in the nation for awhile. But there are even signs of the market cooling a bit in Seattle.

 Wow, wasn't expecting such a hostile response. I was under the impression that the Bigger Pockets community was helpful. Brandon suggested this method literally yesterday in a webinar that he hosted.