All Forum Posts by: Travis Boyd

Thank you, all. To answer a couple clarifying questions...I did not even request to submit any offers, so no, I did not enter into a purchase and sale agreement. 

Hi there. In January I was researching out of state markets as a brand new investor since my market (Seattle) is so costly. I connected with an agent in Portland OR and signed an exclusive agency agreement with them "throughout the state of Oregon". After they sent me a hand full of listings in Portland with their thoughts, I decided instead to look for a fix and flip in my local Washington market. I did not request anything further of the OR agent (I never asked them to make any offers for properties or walk a property in OR). The 6 months has now ended from the agreement I signed with the OR agent and they sent me an email requiring I send payment for $2,000 since I didn't purchase a property through them during the 6 month period. When they walked me through the agreement I thought they told me they would not charge me $2,000 if I didn't purchase a property, but that isn't in writing and they are claiming they did not say that. I would not have signed if I thought I would need to pay them $2,000 for not buying a property. I explained my viewpoint by email and asked them to drop the $2,000 invoice, they threatened legal action through their agency. I even asked if they would consider reducing the amount since I hardly asked them to do anything, but they stood hard requiring I send payment for the full $2,000 and are reaching out to their eXp legal team to assist with collection. Any advice or thoughts for me?

This is the wording that was included in the buyers agreement:

"If Buyer enters into an Acquisition agreement during the Term due to the efforts of Buyer’s Agent but fails to complete the transaction in accordance with the material terms of the transaction agreement, Buyer will pay $2,000 to Firm as liquidated damages. The parties agree that the exact amount of Buyer’s Agent’s damages in that situation would be uncertain and difficult to accurately estimate, and the amount indicated in the previous sentence is fair compensation for and a reasonable measure of those damages in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or non feasibility of otherwise obtaining an adequate remedy."

Thanks Bonnie! Good points on passing the utilities costs to the tenants and eliminating property management.

Hi BP community! I'm looking for advice on whether I should purchase my father-in-law's 6 unit apartment in Burien, WA (10 minutes south of Seattle) as my first deal, or perhaps help find him a seller that would pay more than I could and is a couple years ahead of me in REI. My father-in-law told me he plans to sell his 6 unit condo building ASAP so he can "retire" from being a landlord. He has owned it for over 30 years and has no debt, so seller financing is possible and he doesn't need a large amount of cash soon. 4 of the 6 units have been recently updated. The units are being rented below market at around $1,700/unit, whereas market rent seems to be around $2,150/unit for these 2 br/1.5 ba units with laundry in each unit and undercover parking. I know a year ago an investor reached out and offered him $1.6m which he felt was a low-ball offer. I tried calculating value based on NOI and cap rate (see below) but I'm new to this and the value seems to come out lower than I would expect. I am considering offering him $1.8m with a low (or no) down payment and seller financing at a low interest rate so I can at least break even on cash flow after getting rent closer to market value and with upside potential as a MTR and strong appreciation opportunity. For context, before I learned about his 6 unit I was planning to purchase a 2-3 unit long term rental in Q1 2025 as my first of many deals with a 5 year goal of financial freedom so I can coach my daughter's high school cross country and track teams. I'm also considering finding a seller that would pay more than me to help my father-in-law out and perhaps get a wholesale commission that I could use on my next (ok, first) brrrr, but I'm not sure the best way to validate a fair price or know what a fair wholesale commission would be. I will be attending a real estate meet up tomorrow night in Seattle but would appreciate any advice before the meet up.

Some numbers:

Expected 2026 income after raising rents to market value and assuming 7% vacancy: $144k.

Expenses: $14k property management, $18k property tax, $10k insurance, $10k utilities, $8k in repairs/maintenance/advertising/admin/etc: Total operating expenses: $60k

NOI: $84k

Based on 6% cap rate that brings the valuation to only $1.4m, or $1.5m based on 5.5% cap rate. That seems like a way too low evaluation. My father-in-law is also considering creating an HOA and selling each unit as a condo for $350k which would be $2.1M. That sounds like a lot of work and I'm sure he would prefer to avoid that work and just sell it for $1.9m or $2.0m.

if I were to buy it from him, to get to cash flow neutral I would need to increase rent on all 6 units to market rates and my monthly payment would need to be close to $6.2k/month, which would be $100k down payment, $1.7m loan with seller financing at 2% interest rate and flexible ballon payment.

What would you do if you were me? 

Thanks!

Super helpful. Thank you all for your responses. I'm excited to build momentum in this space in 2025. 

Hi BP community! I currently House Hack in Everett, WA (near Seattle) and utilize FurnishedFinder for our basement ADU with great success. I have built up enough equity and savings and will start adding multiple rental properties each year starting ASAP. I'm currently looking at markets with high demand for traveling nurses, and I'm looking for small mutlifamily properties like duplexes to help scale faster. I'm wondering if other MTR investors are having success renting out side by side duplexes (or triplex/quadplex) as MTR's? I also plan to Brrrr. Might as well start out doing as much value add as possible, right? I'd love to hear your perspective!

 Super helpful, Stuart. Thank you!

It is for liability protection. My understanding is the key is to keep separate bank accounts and financial transactions.

Hi all. I'm planning to launch my long term rental portfolio in 2025. I live near Seattle and I'm currently trying to choose between OH and TN for my target market as an out of state investor (which could still change). I'm planning to start an LLC but I'm wondering if I should wait until I have 100% chosen my market so I use the state of that market? Or should I just get the LLC formed under WA state where I live? Also, should I find a CPA that specializes in real estate investment before forming an LLC and before purchasing my first property? For context, I have $80k in liquidity and $1m in equity in my primary residence so working on opening a HELOC and plan to add multiple properties each year through the BRRRRR method. I wouldn't be surprised if I end up with properties in multiple states so not sure how much it matters where my LLC is located. Any and all advice is welcome!

Hi Radhika!  I can 100% relate with you. Over the last three weeks I've read 7 of the real estate books and spent hours listening to biggerpockets podcasts trying to learn as much as a I can and narrow down my focus. I relate with knowing I want to build my real estate portfolio but feeling overwhelmed with how to choose a market (I live in Seattle which is similar to CA with regards to the price to rent ratio challenges), so I wanted to share my current plan. I have done a couple hours of initial research searching for top markets and have an initial list that I'm researching including Detroit, Memphis, and OH (Columbus, Dayton, Cleveland, Cincinnati) to start. I have spoken with an agent/PM in Detroit that somewhat scared me away from the Detroit market (eviction rate is currently 8% down from 20% 5 years ago and such a different environment that I'm familiar with). I also have learned Memphis can be quite spotty (a dangerous block can be just a couple blocks from a good renting location so you really need a boots on the ground agent/team that you can trust).  I'm less overwhelmed the more I talk with people, and everyone has been helpful and happy to chat with me. Now I realize it is going to take a couple months of talking to real estate investors and agents etc to help me slowly dial in my market territory. I am not much closer that I was a couple weeks ago, but the more I talk with people the more confident I get that I will get there, and you will too in time!  It may not be a bad idea to give yourself a few months to network and learn. Also, I've been asking most people I talk with for references and keep getting in contact with more people, all of whom have been happy to chat for a few minutes. It sounds like you've got the ball rolling in the right direction already, so keep up the great work!