All Forum Posts by: Steve K.

Purchase a SFH near a university and rent it out to students. Condos are more risky because of holding cost and may have rental cap restrictions.

@Bill G.   Thanks.  That helps quite a bit.

Thank you all for the recommendations.  I will look into them.  

A bit of good news.  After serving 3 day pay or vacate to tenant, he mailed a cashier's check for this months rent.  I also sent out a late fee notice, for being late for the rent.  It's spelled out as such in lease agreement.

It's already Nov. 21, we'll see if the tenant will remember to pay on time.  Otherwise I'll have to charge late fee again.  Really don't want to do because stress a landlord has to go through, trying to decide whether to evict or not.

I have a problem tenant that's not paying rent.  Property located at Bremerton, Washington.  Nearby towns are Bremerton, Silverdale, and Port Orchard.  

Do you have a recommendation for an eviction attorney?  Ever worked with one located over there?  What was your cost?

I talked with Mageneson law firm over the phone.  For a typical eviction, it may be around $750.  1/2 hour phone consultation plus reviewing documents prior to phone consultation is $125.

Hi.

I have a 1950s SFH property purchased back in 2005 for $178k. Zip code 98310. Population growth, total about 5% during the last 10 years. It has a detached two car garage. Decent sized land. Unfinished full height basement. Basement accessible from outside stairs. Its price went up a little bit during real estate bubble years. In 2009, I refinanced the property from 5.6% to 4.9% interest rate. I moved to another city due to job and rented the property out because I did not want to sell at a loss. Cash flow wise, it costs me $120 a month. Which I can handle OK. Now it's 2014. I am guessing it's worth $140k. I owe $125k with 25 years to go on the mortgage. Not able to refinance to lower interest rate because LTV is 75% with traditional lender.

Since it's about 2 hours drive away. Property management company is taking care of the property. Property management fee is 10%.

I would like to explore some options with this property:
1. Sell at a loss and become cash flow neutral?
2. Borrow from my own 401k retirement account and pay down the principle. The 401k loan will need to be paid back during the next 15 years at 2.4% interest. The 401k loan interest goes back to my own account. Basically I am my own bank. Doing this would turn negative cash flow to positive cash flow of $90 per month. Is this a good option? Or is this good money chasing after bad money?
3. Borrow from 401k retirement account and acquire another cash flow positive property to cover the original cash flow negative property?
4. Finish the basement and then rent or sell?

What would you do in this situation?

Do you consider paying down mortgage and gaining equity as part of the total ROI? How does one calculate that?

Rich Dad had a free webinar on real estate investing. The speaker's name was Jason. In the webinar, he talked about a mathematical formula to calculate MAO from gross rental income. Like this.

(Yearly Gross Rental Income) x 7 x building condition adjustment factor = MAO

Yearly gross income can be derived from monthly income by multiplying with 12 months in a year.

The building condition adjustment factor is based on three building conditions: great, good, and poor. Great means plus 10%. Good means no adjustment. Poor means minus 10% on the offer.

The only puzzle I don't really understand is what the "7" multiplier is about. Looking at real estate markets around Seattle, where there is bidding war going on, this MAO formula doesn't work. The "7" multiplier is closer to "14". The "14" multiplier probably holds true with other hot real estate markets like San Francisco or silicon valley.

Have you seen this formula? What MAO formula have you used that works for you in a buy and hold rental properties?

Hi all.

I am in Bellevue / Redmond area of Washington state. Have been reading about real estate investment on and off for the past 7 years. Because I got a new job in 2010, I became an "accidental" land lord. Fortunately the two places are within a 2 hour drive distance.

Just spent a lot of time renovating my current living quarters. It is not easy. Hands on gave me some experience in renovation. Renovation also help me figuring out price and time required to do the job. Youtube will teach you quite a bit of the "how to".

Graduated from University of Washington with electrical engineering degree. What I do now days is project management, contractor negotiation, and construction safety / risk evaluation.

Real estate takes a lot of street smart, instead of "book smart". I am hoping to find a team or senior team leader so we can all learn from each other.

The devil is in the details. If I can shadow experienced people when they do their real estate magic, it would be great.

Primary Objective: Create a portfolio of rental properties to have basic financial security. Going for condos, SFH, and duplex / triplex.

Immediate plan of action for the next 3 months:

1. Read and learn using free resources on the internet.

2. Network with local people with similar interests. Real estate is very local. First stop is the local REIA organization.

3. Look at properties on MLS / Zip Realty, pick a few good candidates, and analyze numbers. I will post my analysis in the forums and invite discussions. Two heads are better than one. :-]