All Forum Posts by: Stacey Carroll

I got my ticket this morning (had an alarm set!).  Got my airfare and hotel when the dates were announced!  So excited!

A book about finding compromise with your partner when your risk perspectives are different. This could be any type of partners but thinking of spouses. Part REI and part therapy! Ha!

We’ve slowed on acquisition because we loaded up in anticipation of rates rising and we have our hands full at the moment, but if the right deal came up, yes!

I invest in rentals in WA state as well and honestly, we aren't going to get the big return numbers as others will - but for me it's worth the risk because I believe there is a lot of appreciation potential both in the homes value and in increasing rents. I think your seller financing deal is a good one - you are solving his immediate pain points and it keeps the loan off your "books".  If you are able to - you may want to sweeten the deal by having the balloon payment triggered upon his death so his kids get the funds (assuming you know more about the inhertance tax implications than I do!).  I think your estimates are as good as it can get on the maintence costs - as long as you have reserves in case you need more - it's only an estimate at this point.  Assuming that you live close to this area - I'd be willing to take lower returns just because of how easy it is to stay connected to the property.  I'd do it.  :-)

Also, something to keep in mind as a best practice going forward: make sure your lease agreements allow for quarterly inspections of the property and do them religiously (either yourself or your PM). We’d love to think that renters will treat it like their own but that is very, very rare. Personally, I would never rely on the renter to notify me. Some people are scared, some just don’t care and some are unaware. But at the end of the day it’s your investment, therefore your responsibility. Best of luck with the next tenant!!!

I owned an Airbnb on the ocean and my first response was EVERYTHING! Put a lot more money in your budget for frequent window and deck cleaning (ocean = ocean birds), any outdoor furniture and/or extras will wear very fast. Consider getting any metal coated (exchanger for heat pump etc). Also, cleaning fees may be more both in laundry expenses and sand (as someone else mentioned). I would put tile or LVP in for flooring because of the potential for water damage. Also, if you are financing don't underestimate flood insurance INCREASES, FEMA needs more money! For me, I found the opportunity to charge more was worth the hassles for awhile, but eventually the costs became unbearable (mainly my flood insurance premiums).

@Tim Herman - thanks, will explore these options.  one of the seller's motivations is to avoid a big captial gains hit - so I'll have to look into how that fits into the equation.

@Rico Quatro - thanks so much for your response.  Working on putting all the numbers together to show my husband.  I don't see it as risky or over-leveraged, but he does.  So, we'll have to work through those differences.  I'm going to try showing him all the detailed numbers!!

@Glenna Wood - Thank you!  Definitely getting to practice my negotiation skills!

@Bjorn Ahlblad and @Kim Meredith Hampton - thanks to you both - I'm practicing all my negotiation skills on my husband!  @E. C. "Stony" Stonebraker - thanks for this!  I will definitely check it out - always interested in learning new ways.  I do have a really good firm that I work with!  

I really appreciate everyone's input!

We've found a great off-market, small multi-family investment opportunity in our desired area (north whatcom county, WA).  Here's the challenge! The owner (nearing his 80's) doesn't want all the cash now (I know - THIS isn't the problem). He wants to carry the paper on $400k. Purchase price is $800k. We have $150k cash - but not what we need and I'm not sure I want to spend all our cash.

So, trying to evaluate all our options, here is what I think our options are:

1) Look into a hard money lender that would be willing to have a lien on the property for the owner's contract. Is this a thing? If so, I'm worried about if I could find a hard money lender that would be interested in such a small investment and how it would affect cash flow because some I've talked to charge 9% interest. Also, do any commercial banks allow loans with partial owners contracts/liens?

2) I am currently self-employed and I could move retirement funds to a self-directed IRA, but not sure this is possible unless the seller is willing to write a non-recourse loan doc with us. Is this a thing - seller non-recourse loan?

3) Find a partner to do the deal with. Selfishly, I don't like this idea because finding and getting this deal was a lot of work and it feels like giving too much away to bring a partner in now. Although some of you may be thinking blah, blah - if you had your own capital, this wouldn't be an issue!

4) My favorite idea (but my husband would probably divorce me): Borrow from our primary residence (which we currently don't have a mortgage on and is valued around $450k. Again, this is the obvious choice to me - but marriage and compromise and all that good stuff!

5) Other options - what am I missing?

Thanks in advance for any and all feedback!

Stacey

We've found a great off-market, small multi-family investment opportunity in our desired area (north whatcom county, WA). It's perfect for us because it's close to our other rental (and our home) so we can self-manage.  It's in an area that is growing A LOT.  It's a 4-plex, side-by-side with garages and full size washer and dryers in unit.  Each unit is 2/2.  Cap rate is just under 5% (which we find more than adequate in our market).  Cash flow will be decent - but not great, but we are willing to take the risk for this property because there is good potential.  The owner has taken incredible care of this place - with a new roof, brand new furnaces and appliances less than 3 years ago (converted to natural gas).  One unit has recently turned over and rent went up $450 per month and rented in days.  2 others could go this high and one would go up $250.  Here's the challenge:  The owner (nearing his 80's) doesn't want all the cash now (I know - THIS isn't the problem).  He wants to carry the paper on $400k.  Purchase price is $800k.  We have $150k cash - but not what we need and I'm not sure I want to spend all our cash.

So, trying to evaluate all our options, here is what I think our options are:

1)  Look into a hard money lender that would be willing to have a lien on the property for the owner's contract.  Is this a thing?  If so, I'm worried about if I could find a hard money lender that would be interested in such a small investment and how it would affect cash flow because some I've talked to charge 9% interest.  Also, do any commercial banks allow loans with partial owners contracts/liens? 

2) I am currently self-employed and I could move retirement funds to a self-directed IRA, but not sure this is possible unless the seller is willing to write a non-recourse loan doc with us. Is this a thing - seller non-recourse loan?

3)  Find a partner to do the deal with.  Selfishly, I don't like this idea because finding and getting this deal was a lot of work and it feels like giving too much away to bring a partner in now.  Although some of you may be thinking blah, blah - if you had your own capital, this wouldn't be an issue!

4)  My favorite idea (but my husband would probably divorce me):  Borrow from our primary residence (which we currently don't have a mortgage on and is valued around $450k.  Again, this is the obvious choice to me - but marriage and compromise and all that good stuff!

5)  Other options - what am I missing?

Thanks in advance for any and all feedback!

Stacey