Geoff Tallent from City of Seattle discussed rental housing inspection. The framework of the inspection program is to effectively address rental housing problems, focus on important issues of safety and livability, to keep costs low for registration and time, keep program focused on compliance, stay within legal and constitutional limits, program needs to be self-supporting. Nearly all properties in City must register, including SFR, ADUs, condos, duplexes and larger apartment complexes. Rooms in owner-occupied houses and vacation rentals, institutional housing such as dorms or government housing not included in program.
July 1 2014- 10+ units must register
5-9 units by January 1, 2015
1-4 units must register by zipcodes between 2015-2016 (My two properties have to be registered by Dec. 31, 2015)
There will be an online system to do the registration. $175 per unit to register, with $2 for each additional unit.
Cost for a City inspector will be $130 per property, with $25 for each additional unit. Private inspectors will set their own rates.
Comments from attendees included that it may be time to sell their rental properties within the City of Seattle, especially owners of SFRs. One participant wanted to know whether those implementing the program were landlords themselves.
About a dozen Washington cities have adopted similar programs of rental inspections.
WLA has concerns about shortage of housing, affordability.
Ron, McCallister, Small Business Computer Security: It takes 7-9 minutes to figure out the 7-8 character password. Double that password and it now takes 16 years - a phrase is the best password e.g."My dog's name is Nash."
Also a password such as my!pa$sword will be virtually unbreakable.
Credit card number over the phone is written on a piece of paper for most vendors and medical offices. Everything written down for the tenants must be secured, including ss#. Neatdesk allows you to scan all information into the cloud. Is the cloud area secure?
Seven years to maintain documents. C-Cleaner ccleaner.com will get rid of everything on your computer. Wipe data takes 2-3 hours. It must be done about 7 times to delete everything.
Crosscut shredder better than long panel shredding.
Everything you put on the internet is open, unless it is SSL. Your information is sent in plain text. Faxes can only be read by fax machine, but if it is scanned, it can be read.
houses2rent.com is speaker's website
Malwarebytes.org - get this for free and check your machine
It is not sufficient to do your banking on a separate browser, it should be on a separate computer.
Colleen McAuliffe, Dispute Resolution Center - offers mediation in small claims court. Both parties must agree to use these services. 75% of the cases mediated are landlord tenant cases, and mediation is able to resolve about 67% of these.
Mediations can be done at their center, charged on a sliding scale, for any disputes that the parties cannot resolve on their own.
Aaron Neilson, Collection Realities Today: Does a lot of landlord tenant work, and collections outside of this.
Bank accounts, automobiles, what assets they own should be on tenant rental applications.
Judgments last for ten years and can be extended for another ten years.
Charging order can be used to access business equity in a self-owned business.
Evan Loeffler, Ten Steps to Evict:
Be sure to follow the law
Robert Cannon, ClearView Wealth Management: 1031 Exchanges have been in place since the 1920s. Standard financial planning focus, diversification among asset classes, having lots of liquidity.
Steve Kotz, Glass Doctor: Low E glass is so important, put it on sunniest windows. Purchase price is based on specified glass manufacturer. Window framing used is vinyl; aluminum is terrible insulator. Vinyl technology is about 25 years old, and has improved.
No material lasts longer than vinyl for window frames.
Art Conrad from Seattle City Light, focused his remarks on multifamily properties. More than half of their clients live in multifamily units. Powerful Neighborhoods is a free program for multifamily owners with an auditor to identify energy-saving measures and to install new light bulbs, showerheads and aerators.
Common area lighting program of SCL may be of most benefit to multifamily owners.
John Wells, maintenance. Single lever faucets, plumber's grease is great for getting O-rings on. Copper pipes and water pipes that burst can be repaired with quick connects with rubber connector. Plumber's goo can be removed with heat gun. A continuity tester can check that plug-in is wired correctly. Electric tester with laser that will tell you the temperature to identify heat leaks, insulation leaks.
Peter Wright, Paragon.
$676K per unit for Bravern, $178,000 per unit in Seattle now, $250/sf; cap rates are below 5 now. GRMs up from 11 to 12.7 this year. Loans are more readily available for performing buildings.
Seller financing has made a good comeback.
A lot of lending along I5 corridor, but not in Kitsap. Rates for 5 years 3.2%, 7year rate 3.9%, 10 yr at 4.6%. Seattle prices are up dramatically. Eastside is a great market; sales volume has gone up in Tacoma, prices not so much; Snohomish picking up, but concerns about Boeing.
130 of 300 transactions this year in King, Snohomish, and Pierce were in Seattle. 7 cap average in Pierce, Snohomish is 6.7.
7500 new units will come on line this year in Seattle, highest level since 1991. Another 14,000 units are being built.
Assumptions that there will be continued strong job growth to support all the new units coming online. $3/sf is the estimate that builders are using.
Older, smaller buildings have lower overhead, will be able to offer lower rents than the large new complexes.
Dupree and Scott have a map showing where all the new complexes are being built, concentrated in Ballard, Capitol Hill and S Lake Union.
The key to real estate is location, location, location. If you were thinking of buying now, buy on the fringes. Look for upside potential. Look at all pricing indicators for value: price per unit, per sf, cap rate and Gross Rent Multiplier.
Cash flow or appreciation? Short or long term?
Peter Wright thinks cap rates will start making their way back up again, based on connection to interest rates. He thinks we may be getting close to a bubble again, that cap rates will lag closely to interest rates.
There have not been many foreclosures on multifamily in Seattle, most have been bought up.
Happy Investing!
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