All Forum Posts by: Wayne Lee

To get a B-Class that cash flows is all about the initial purchase price and the amount of leverage. People say cash flow as if 20% down will always do the trick, we're not in 2010-2022 anymore. We're in a high rate era, you need to put more down or put more into the property to get it to cash flow.

Don't read stuff from 2010-2020 and ask why it isn't working like this anymore. REI is a different ball game.

Best advice is to buy distressed, fix up, and rent it out.

@Wayne Lee When rates were super low 2 years ago, and prices hadn't totally spiked, many investors got lazy because almost they could buy anything on the MLS at asking price and cashflow as a rental.

As prices went up, many investors started investing in STRs to get properties at asking price to cashflow.

Now, many are chasing Class C properties to get them to cashflow at asking price.

What consistencies do you see in all three of those scenarios?

The most important one is, "at asking price"!

Prior to the Great Crash of 2008, most investors looked at & analyzed 100 properties, to make 10 lowball offers (so the property cashflowed) to hopefully get one accepted.

Not many investors want to work that hard today.

They'd rather invest in high-risk Class C properties and take their chances, as opposed to doing the hard work mentioned above!
---Then, when their high-risk Class C investments doesn't deliver Class A results - they blame their PMC, agent, etc. - but, RARELY themselves.

Now, what are you going to do to find a Class B rental that cashflows?

@Wayne Lee

can you house hack in Seattle? and/or

can you pick a market 1-3 hours away from Seattle and look there? and/or

can you travel to Cincinnati every other month for the next 6-12 months building your network and looking at properties in person?

@Wayne Lee Normally I advise people who want to be active to invest in their local market. So it really depends how much time you have, how hands on you want to be and of course what your real estate goals are. I'm in Memphis and have no experience in Seattle but I've worked with a dozen or so investors from there and the laws/price points pushed those clients to invest out of state. I have hundreds of clients from the west coast and they prefer to invest passively in the southern/middle part of the country because the price points are easier and the states are landlord friendly areas. 

If you do decide to go the passive route do your homework on who/where you're invsting with. My clients prefer to work with a company who owns the entire process top to bottom. Meaning they buy the properties with their own money, do their own renovation to the property and own their own management company on the back end. This ensures the interests will be mutually aligned as they will be married with you through the longevity of the investment. 

Feel free to reach out if I can be of any assistance. Best of luck getting started! 

I'm in Seattle, and we avoid the city like the plague. Currently we are focusing on South King County (Des Moines) and Pierce County (Tacoma). Lots of opportunity south and north of Seattle, especially if you're not looking for something turnkey. 

Check out East Tacoma around https://maps.app.goo.gl/WXfByPMTtYq8jqww7. 

There's new developments all around here, nice and quiet neighborhoods.

@Wayne Lee the Seattle market can be a tough one to break into, especially with median home sales hovering around $800k. In my opinion, the location of your investment should be largely driven by your overall investment goal and risk tolerance. 

Are you looking for strong cash flow? Seattle is getting squeezed making cash flow harder to find.

Are you looking for appreciation and population growth? Historically, Seattle is a phenomenal market for this. I suspect Amazon, Microsoft, and the other tech giants' push for return-to-office is going to drive more high-income activity into the rental market again. Especially in areas near SLU, commuter lines, etc.

How risky is our market? Of course Seattle (and even the surrounding metro's like Tacoma) is less landlord-friendly than others. Check out Pierce County's Measure 1 that just passed this week. It's aggressively favoring renters, putting more restrictions on landlords. This should be a point of consideration when looking locally.

My advice: whichever market supports your investment goal (cash flow/appreciation/etc) and your risk tolerance (laws & restrictions) is a good place to start looking for deals.