All Forum Posts by: Ted Klein

I have been analyzing many deals in the Puget Sound region and am having a hard time finding deals that make sense on the MLS. I am using the BP rental property calculator for my analysis and am allowing for everything including property management expenses.

I am concentrating my search in C to B- properties and could use some advise on what is reasonable for expenses. I am thinking that I may be overestimating my expenses as the BP calculator uses a % of the gross monthly rent. Should I be using a hard number per door?

I understand each property is unique and that older properties will likely have higher expenses so the number that I use would be dependent on the age of the property. I have read about people estimating their expenses based upon the useful life of the cap ex items, roof, hvac, appliances etc...

However, when analyzing properties this information isn't available. What would be a good method to determine what a properties expected capex expenditures would be when analyzing properties for consideration?

I just want to clarify, I am no expert and would like feedback from other more experienced investors on the plan I had described as this what I have been doing. Any feedback from others is greatly appreciated.

@Jason Welter

Welcome to BP. You have came to the right place to learn about REI. I have previously owned rental property and am just now getting back into it and am looking to go out of state as well.

One of the first things you need to do is decide on a few areas that you like or where you may know people then compare the economic indicators for each area, high yield, job growth, population growth, low unemployment etc... Then you want to look at the state of the market in these desired areas and try to find up and coming areas that are on the rise for appreciation, being sure that the market is just starting to rise and is not already at a peak or in a decline. Looking at these items should help narrow down an area that has potential.

Next, I'd recommend to search out areas with good schools and low crime rates. After that try finding colleagues in the area of interest to start building a local team to help you along the way. After that, just start making offers. I have been doing this and have made two offers, but have not yet landed a deal. Just need to keep looking and be sure that the numbers work for you.

@Timothy Tooker

Mine was no points. I have no debt and very high FICO score. Not sure how that might play into if those were reversed, high DTI and a low FICO.

@Vikas Raoot

Several of the big banks all quoted me the same rate, Chase, US Bank & Bank of America, all had the same rates with 20% down with the exception of BOA, they wanted 40% down. These are investment loans. Keep in mind, your DTI and FICO play a major role in being able to get the most favorable rates. Good Luck

Thanks for all of the helpful advice. I have a goal of acquiring 4 mf properties in the first year so I have been focusing in Pierce and Snohomish counties where I see my path to multiple properties being easier to stay within an acceptable debt to income ratio. I have spoken to my lender and they say that they will carry up to 4 loans subject to underwriting.

I will be using conventional financing for the initial loans as I have been quoted 3.5% with 20% down on a 30 year fixed for investment properties. Since they want two years of history before rental income can be claimed on a W2, what are some of the options for additional financing once the debt to income ratio becomes a concern to my lender.

@Account Closed

Glad to hear that there is a strong rental market in Pierce county. As you mentioned, the military base should provide a good steady supply of tenants. The higher entry barrier to King county is the reason for my hesitation.

Does anyone have any insight to which of the three counties have the best landlord friendly laws that could help me make a decision where I should focus my search?

Looking for some advice on the Seattle area market.

Since I am hoping to acquire multiple properties, should I start in a lower priced local market and acquire a couple of properties that cash flow good and let them season so that the income can be counted on my W2 or should I look at the more expensive properties that will cash flow and hope for the appreciation?

I have been looking in the Puyallup area for small MF properties and find that they can cash flow and have a decent COC return, I am however, concerned about the appreciation.

My agent has mentioned that properties in that area will not appreciate and that I will have more tenant problems.  She is recommending Seattle / King County area since the rental rates are much higher and having a much better chance of appreciation which I agree on both.

Problem I have is, with the values already so high in King County, it will limit the number of properties I can acquire given the impact of the debt to income ratio after purchasing such a high priced property.

What are the opinions on this and are there any recommendations on financing options to acquire additional properties once this occurs? Or should I stick with the lower priced properties to get started again?

I am looking for a good property management company for small multi family properties in the Tacoma Area. Does anyone have any good recommendations?

@Alex Chin @Chris Newman 

Thanks for the links, I had came across a couple of these already. I guess I didn't have the correct layers turned on. I was able to find the zoning categories which is what I have been looking for. I had noticed the category codes but didn't know what they meant. I have made it through the Pierce & Snohomish county sites and now understand what I am looking at. I will be doing the King county site tomorrow. Thanks for sharing!