All Forum Posts by: Eric B.

Greetings and welcome.  Well you certainly are ambitious.  Im experinced in the Tacoma market and thats how i was alerted to your post.  Your valuation for 4 plexes may be a bit high for the area but ball parkish may be closer for B+/A areas .  I have b properties in b/c tacoma area.  Multis are a bit pricy right now so your cash flow goal will require work to acheive locally but is fairly realistic.  My advice is to stay nimble and evaluate duplexes as well as larger units.  Why 4 plexes?  20% is available but you may find 25% to be more accessable.  Larger units or areas closer to sea-town or pemium neighborhoods in tacoma would allow you to get closer to your 600k price point but honestly that sounds like a cali price to me.  Higher price generally lower cash flow but better appreciation.  If you you like to talk feel free to reach out to me. Good luck in your quest.

3 bed 1 bath.  2 bath is more desireable but in the era of the housing stock in the area they just arent common.  I have seen a few 3/1's converted to a 4/2 in fact i own one.  I also have a 4/1 a 3/1, And a 1996 infill house thats a 3/2.5 in the same neighborhood, it doesnt command a premium on rent as the prospectice pool cant seem to afford much more.  But that's just the situation on my "farm".  Your results may vary.

welcome.  Anything a bit better than the 1% rule is decent buy in the area.  A true deal of course will be better.  Rents are in the 300 to 400 a bedroom for a rule of thumb. So you want to see a 3 bedroom below $120k if its turn key ready.  That may be tough off mls right now.  It really depends on what you are trying to accomplish.  Feel free to contact me if you would like more specific help.

Two things that I don't allow to override my decisions are taxes and Mortgage rates.  They are peices of the analytical puzzle sure but in the end they can be really more of an emotional reason for a decision.  If you take 60k and go from a 0% return to a 15% return that's $9,000 per year in profits.  That pays for allot of mortgage interest.  

People who arent in the game always ask me about taxes and mortgage rates.  I tell them that if they are basing their decision on those two things the margins on a deal are too thin and they need to move on or not make the deal in the first place.  Deals with that kind of return are speculative.  That being said seattle is a speculative play right now and it may be worth waiting it depends on what you want to accoplish at the moment.  I have a property that looks the same on the numbers but I don't have  any equity.  Its been apprciating 9% a year for the last 18 months.  so I don't see any harm in waiting as it is stabilized with a tenant who is a neat freak and likes the place.  Its speculative but like I said I wouldnt get enough money out of it to make an investment anywhere else.  $60k goes a ways towards an investment property.

Feel free to give me a call if you would like to talk it over further.

Not enough info.  Ask around your area and see if you can find a contractor or engineer who could tell you.  Keep in mind $100/hour including drive time seems to be aprox. going rate.  Course you live on the exact opposite side of the country from me.  Good luck.

@Brian Burke I was pleased to see all three of my markets on your list.  I'm in Seattle, Tacoma and Salem (driving right past Portland for all the reasons that @Jeremiah B. cites and you summerized).

@Troy Fisher hits the nail on the head about Seattle being difficult to work with.  I have a contact that that's all they do is interface with the city for developers.  THeir specialization in that relationship with the city has done very well for them.  While I am not a lawyer or political operative harkening back to my highschool goverment class:  Washington has a landlord tenant law that specifically prohibits rent control and superceeds anything that the city may try to do.  That being said as the city goes so does the rest of the state eventually due to the population numbers and the one party system we have had here in washington for the last 30+ years.  

One thing to keep in mind is that Seattle metro actually has a fairly small foot print given the size of the city and the surrounding areas offer opportunities.  As in every major city these areas are very uneven in terms of quality, velocity of improvement and resultant opportunities.

@Caroline Weil @Alex Chin  Make good points and Tacoma has been my area of focus for the last 3 or 4 years.  One word of caution about tacoma, they have very restrictive regulations governing rental units, specifically that they must be registered with the city and that they can be inspected by the city at any time and the city can order repairs and updates.  how this works in practice I dont know as I have stayed just outside of the city limits with my "farm" due to the restrictive nature of the ordinance.  if enforecement is lax now there is nothing to stop later more strict enforcement to cause issues.

Havent heard much about Salem, OR.  We just closed on our first property in Salem and you are right to place it in your fringe catagory.  Salem has undergone steady growth for the last 15 or 20 years and I attribute much of that to the state government and resultant high paying jobs.  Oregon is famous (notorious?) for being one of the only states to raise taxes in the depths of the recession.  Nevermind that revenues went down as the millionaires left the state but it had the effect of cushioning the Salem market and setting up the city for growth after the recession.  Salem is a sleepy market (While it does have a international airport it has no regular scheduled flights! none!). I'm not able to think of even one 100+ unit in the market.  Thats a bit bigger than the fish I chase but gives you an idea.  The city seems to me to be nearing the extent to which it can sprawl and I expect it to doubble back and start to infill and densify.  Building seems to be where it is at in this market but scale may be difficult.  I'm pursuing some land in this market to do just that.

I have functional peices of a team in all three markets and boots on the ground should you like to engage any of those peices I am willing to share and hungry for more work and opportunity myself.

Thanks for the post.  I've learned from the other contributors and hope my information helps.

 Thats right Michele.  In washington it is in the home inspection law that a home inspector is not to do any work on a property for 12 months after an inspection.  Its part of national organization guidelines as well as far as i know.  So if its a conflict for us to do work on an inspected property it follows that its a conflict for a contractor to do an inspection.  Laws and expectations do vary from place to place around the country however so thats why i was careful to stipulate washington state.  Thanks for the suppprt :)

Assume you can find a tradesman who will do said inspection for $100 each (big if).  Add to your list a roofer and a framer for structural inspections.  Oh also dont forget a pest control guy.  In washington state they would also need to call it an estimate visit as doing a home inspection without a license is frowned upon by the state.  So lets see at $100 a pop thats around $600 minimum.  I personally would hire an inspector they (we) may be generalists but its a valuable and meaningful service.  If you would like to add on say an hvac guy ask for the inspector to exclude that and see if you can get a discount then apply towards the hvac guys fee.

Wheels are round for a reason, not sure why your agent is urging creative thinking.  Ashi's (american society of home inspectors) website has a search feature.  But i would ask around and go with one that you can talk with on the phone easily.  Good luck.

I havent heard anything about them.  You wont find many people here recomending coaching.  I suggest you write down what you hope to accomplish with coaching and then figure alternative ways to learn those items.  The funds you save go directly to seed money.  Good luck.

Eric

Is the photo out 90 degrees?  Cant tell about house settling.  Is it the t111 style (sheets) or clap board?.  Caulking usually needs to be done on a less than a 5 year schedule.  It is a pain but thats home ownership.  I suggest using the best caulk money can buy to cut down on the frequency of application.  I like osi brand.  Bonus if you use clear because you can often cut down on painting.  Beware of under painted hardie board/plank. The stuff is tuough but it is meant to be painted, it can come apart when constantally wet and especially in our climate.

Good luck.