Dan O'Donnell's Blog

I grew up on Gooseberry Point and have many fond memories.  From crabbing with a stick and up to my waist in the saltwater when I was little, to riding my dirt bike on the ferry to Lummi Island when I was fourteen.  It was a great place to grow up.  My friends and I ran around the neighborhood with the local dogs usually close behind (no leash law), blowing up firecrackers and riding our bikes off poorly constructed jumps.  If you've seen the movie Sandlot, you get the idea.

It's a beautiful stretch of Beach, with Lummi Island to the west and many spectacular sunsets.  Gooseberry Point is one of the best kept secrets in Whatcom County.  It is located on the Lummi Indian Reservation, but you do not have to be a tribal member to live or own land there.  The Ferndale School district serves the neighborhood.

Gooseberry Point, you can see the Whatcom Chief ferry approaching the dock

The price of real estate is quite affordable compared to Bellingham proper and other nearby towns such as Ferndale, and dirt cheap compared to other beach communities in Whatcom County.  It's about a 15 minute drive to Bellingham and a bit closer to Ferndale.  Also, you can easily walk aboard the "Whatcom Chief" ferry for the five minute ride to Lummi Island, which has gorgeous beaches and views both east toward Bellingham and west to the rest of the San Juan Islands.

Saltwater waterfront home on Gooseberry Point, WA

The Whatcom Chief ferry to Lummi Island

So go visit sometime and see for yourself.  If you have any questions don't hesitate to call.  Thanks for reading,

Dan O'Donnell, 360-220-7157

RE/MAX Whatcom County, Inc.

Bellingham Real Estate Investor Network

Mission: "To educate and inspire real estate investors to ethically achieve success"

Last night was another great meeting for the Bellingham Real Estate Investor Network (BREIN).  Al Schweitzer taught us about collecting on judgements, screening potential business partners, and locating distressed property.  It was another good turnout with lots of great networking, and several new members joining the group.

BREIN now has well over one hundred members and holds monthly meetings, featuring national and local speakers on various topics.  Members include investors, brokers, lawyers, contractors, appraisers etc.  Everyone is welcome.

Timely real estate investing information as well as local Bellingham and Whatcom County information is offered, and members can learn from one another and even buy and sell property at the meetings.   

The next meeting is Wednesday, September 24th at 6pm, all are welcome.  Details are on the website.

July 2008 Meeting

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

Accurately pricing a home is key in todays market.  Your price should be based on recently sold properties, preferrably within the last six months, and currently listed properties as similar to yours as possible.  If your home has been on the market for six weeks or more with no offers, it is likely time to adjust the price.    

The below video gives a great glimpse at a real example of a price adjustment, and the effect it had on the sale of the home.

Watch Video    Robert Kiyosaki and some of his closest advisors explain our current economic situation and how to benefit from volatile times.  Kiyosaki is a successful investor and the best-selling author of "Rich Dad, Poor Dad", and many other widely read financial books.  He explains where real estate investing, along with other strategies, fit into our economic times, and why saving alone is not enough.

This video is part four of a four part series, the rest are all on youtube as well.

Please feel free to call or email if you or your friends and family need anything in real estate, I'm happy to help.   Sincerely,  

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

According to an August 12th article in The Bellingham Herald, Bellingham area home prices posted a 1.2% decline in the second quarter of 2008 as compared to the same quarter of 2007.  This small decline is a far cry from what the evening news might lead you to expect.  Also, according to the same article, Bellingham foreclosures accounted for only 3.5% of total sales, compared to the national average of 14.5%. 

The general real estate slowdown has certainly had an effect on our market, but not nearly to the same degree as in many other areas.  What this says to me is that Bellingham is a very desirable area experiencing a small price correction.  This correction comes as no surprise following a great run of price growth from 2003-2006.  I believe the area will continue to outperform most other parts of the nation. 

Population continues to rise in Whatcom County and plenty of retirees are choosing the area both for travel and relocation.  As for the exact local effect of the 2010 Olympics in Vancouver, no one knows for sure, but it sure can't hurt.  No matter what the national real estate market does, Bellingham will continue to attract people looking for mountains, islands, and mild weather.  Not to mention our proximity to Seattle and Vancouver.

These market slowdowns do not last forever, and are a great opportunity to invest in local real estate.  Whether you're a fist time homebuyer, or considering buying your next rental property, either one can have a huge positive effect on your long-term wealth.     I encourage you to read the full Bellingham Herald article cited earlier, and the paper's other recent articles on the local market.

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

Keys to selling your Bellingham home

Yes, you can sell your home in this market.  However, the market is slower than it has been.  Home sales by number of transactions was down about 25% in the second quarter of 2008 compared to 2007. 

There are fewer buyers out there than in past years, but the fact remains, you only need one buyer.  The market statistics are interesting and worth looking at, but don't get too hung up on them.  Your home will not 75% sell or 25% not sell, it will either sell or it will not sell, period. 

How do you ensure you are one of the "solds" as opposed to the properties just sitting on the market gathering dust? 

1. Get an experienced agent.  You want someone who has dealt in a slow market before and is confident they can get results for you.  Experience and references are key when selecting your Realtor.  Don't just flip a coin, ask them how long they've been in the business and ask them for some references.  The right agent will be able to guide you through all other items below.
2. Price your home competitively.  Your home's price should be based on market "comps" (short for comparables), homes for sale and sold in the last 6 ideally.  These "comps" should have similar numbers of bedrooms and bathrooms, square footage, year built, and as nearby as possible.  Put yourself in the mindset of a buyer, what is your home worth relative to these comps?  Buyers do not care what you paid for the property when you bought it, or how much you need to sell it for, they are looking only at the market.  If you have no offers after 4-6 weeks it's probably time to revisit the price with your Realtor.
3. Stage your home to make a great impression.  "Staging" is preparing your home to look it's best.  It includes decluttering, touch up painting, edging, trimming, eliminating unneeded furniture etc.  In Bellingham our climate is moist and we have lots of trees, so a pressure wash can be a great idea for gutters, sidewalks etc.  Also, check the roof for moss and clean out the gutters.  A previous post of mine goes into more detail on staging and has a great video you can watch at http://activerain.com/blogsview/642448/Great-video-on-staging .
4. Have some patience.  The average market time around the Bellingham area is around three months.  Keep the home in tip-top shape, and keep up the positive expectation.  Buyers feel that they have time to look around a bit in this market.  If your home doesn't sell in the first few showings, that's perfectly normal.  Every buyer has different needs and it just takes the right buyer for each unique property. 

If you have any questions about selling your Bellingham or Whatcom County home, please feel free to call me any time.  I'd be happy to talk with you at no obligation.  Thanks for reading,

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

Many investors, new to working with a professional management company, don't know what is a fair or typical fee structure. 

With smaller rental properties, there are typically two types of fees.  A "leasing fee" (for example, 50% of the first month's rent when a new lease is signed) and a monthly percentage of the rent amount (anywhere from 3-10% is not uncommon, with 6-8% being common in my experience).

I personally have never agreed to pay a "leasing fee" on my properties.  I don't like the idea that my manager gets paid more if my tenant turnover is higher and they're signing a new lease every year or so.  I want my manager to find tenants that are likely to stay for a longer period.  Turnover is costly, carpet, paint etc adds up if you have tenants moving in and out annually. 

So I pay only the monthly percentage of rental income, usually 6-8% depending on how many units, location etc.  On larger multifamily or commercial units, the percentages can be much smaller. 

With this simple approach, the more money that comes in, the more income you and the manager get, so your incentives are aligned.  Realize though, that the expenses of operating the building do not directly affect the manager, so he/she may be in favor of costly improvements that may seem excessive to you. 

As with everything, it is key to get recommendations from fellow investors for good property managers and interview several.  And remember, their commissioned sales people, so ask good questions and don't just listen to their pitch.  Don't be afraid to be direct and ask any question that comes to mind.  With a good manager, you should be able to have open and common-sense communication.

Think of the market value of your property.  Now imagine you had a car worth that same amount.  Would you let just anybody drive it?  Of course not.  Your property is just as important, so be smart about who you hand the keys to. 

I hope that is helpful, and feel free to contact me directly if you have any further questions.  I'm here to help.

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

Not 55 but found a place you like?

Are you looking for a mobile home and frustrated that so many parks are "55 and over parks"?  You might want to dig a little deeper. 

I recently sold a home in a 55+ park and was told by the manager that a certain percentage of people there can be under 55 years old.  So he told me that my buyer didn't necessarily have to be 55+ as long as they met the rest of the parks tenant screening criteria. 

This particular park is in Bellingham, Washington and the laws may differ in other areas.  But it is worth asking the question. instead of just assuming you aren't eligible to live there. 

So that's the hot tip of the day, I hope it's helpful.  If you have any other questions feel free to call any time, I'm here to help.

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

When you own investment property and have a professional manager in place, make sure you are actively watching that manager.  "Shopping" the manager, calling and pretending to be a tenant, may seem strange, but don't hesitate to do it when you have a lasting vacancy. 

I once had a 6 plex with 3 vacancies, so I had my friend "shop" my manager.  He called and was first directed to several other properties.  When he insisted on information regarding my property, which was 50% empty, he was told there was nothing available!  To this day I don't know why that happened, but I fired that company instantly and made sure the broker (boss) knew exactly what her employee had done. 

Want another example?  Ok, how about the time when the person responsible for returning phone calls on my property got in a motorcylce accident and nobody bothered to cover his responsibilities while he was in the hospital.  So I had 3 vacancies out of the 12 units they managed and prospective tenants weren't even getting a call back!  FIRED!

I also highly recommend having a good bookkeeper looking at your monthly profit and loss statements (yes, you should absolutely be getting a monthly statement!) to catch any mistakes that may happen.  These can be simple honest mistakes, or deliberate.  Either way, it's good to have another set of eyes looking over the numbers. 

So, watch em like a hawk, even if you are trusting and don't like to spy.  If you do pick the wrong manager at first, at least you will minimize the damage and quickly move on to what will hopefully be a great manager.  A great manager has a HUGE positive impact on an investment.  When you find one, make sure to treat them well and refer business to them if you can.  A great manager is worth his/her weight in gold. 

Let me know if you have any questions, I hope this is helpful.

Dan O'Donnell, 360-220-7157

www.HelpInWhatcom.com

RE/MAX Whatcom County, Inc.

The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?

 Hot Tip of the Day

A friend of mine was once buying an investment property, a rooming house.  He asked the bank if he could use his 3% commission as part of his down payment.  They said "sure". 

Being the clever guy that he is, he thought "I wonder if I was getting a 205 commission if I could use that as my 20% down payment?"  He asked the bank, the bank said "no".  So my friend said "how about 15%?" and the bank said "no".  Next he said "how about a 10% commission used toward my downpayment?" and the bank said "hmm, well, ok fine."

So they raised the purchase price by 7% (the difference between the original 3% commission and the higher 10% commission), and my friend used his 10% commission as half of his 20% downpayment.  Of course the property had to appraise at the new higher price.  The funny thing about appraisals is they often tend to come in at the purchase price.  Also, each bank will have it's own ideas on this concept, but it sure can't hurt to ask, and ask, and ask.

So there's an easy way for you agents out there to keep some more dough in your pocket when purchasing a property, one of the many perks to being both and agent and investor. 

I hope this helps, let me know if you have any questions.

Dan O'Donnell, Bellingham, WA