Need Advice on purchasing first multifamily for profit in Pacific Northwest

[Joey Klusmann]

My girlfriend and I have been exploring the idea of purchasing a multi-family property as our first investment, in addition to owning our primary residence. We're based in the Pacific Northwest and have primarily focused our search in this region.

One of the main challenges we've encountered is that multi-family properties tend to be quite expensive—typically starting in the mid-$500,000s and up. When we compare the mortgage costs to the average rental income in these areas, the numbers often don’t support positive cash flow.

We've considered purchasing an investment property without living in it, but that would require a 20% down payment. Alternatively, if we were to move into the property and live there for at least a year, we could qualify for a 3.5% down payment. However, the resulting mortgage would be significantly higher, and it’s unlikely we could charge enough rent to cover it.

We have a few questions:

1. Is a HELOC the best way to access cash for purchasing an investment property, or are there better alternatives?

2. Are there any loan options that allow for a low percentage down payment on an investment property if we don’t plan to live in it?

3. Is there anyone familiar with the Pacific Northwest market who can offer tips or advice on finding cash-flow-positive properties?

[Brandon Vukelich]

Hey @Joey Klusmann , you are correct. Prices remain elevated and depending on where you are targeting, it will be $550K+ for any "ok" duplex around Pierce, Kitsap and Thurston Counties. Not really going to find prices that low for a starter multifamily in King or SnoCo. Often the numbers don't support it because some investors still try to get into a deal with 20-25% but in reality, it's more like 30%+ to get to positive cash flow. You need to review a lot of opportunities to find ones to pencil. Even if you could find a low down payment financing option, it usually won't work unless you don't mind running negative for awhile.

The "Pacific Northwest" is a pretty broad area. I watch all multifamily 2+ units up to about $7,500,000 between Everett and Olympia. If you're looking for someone in Bellingham, Vancouver/Portland or Spokane, I may be able to refer some brokers. Alternatively, you can use the "find an agent" feature here on BP or you can check 3rd party listing sites for brokers listing the types of properties in your areas of interest and contact them directly. Best wishes on your journey!