Hi BP! I'm looking into purchasing some duplexes or multi-family in cities around Seattle, WA. I was thinking of selling my home in CA right now and using the money for the investment. Very scary as I'm new at all this so I'm trying to do my research and trying to do it well. How did you guys get started? How did you decide a specific location is a good place to invest if you are not local...
I would recommend moving just south of Seattle into Tacoma, Lakewood, Olympia, etc.. I have been running numbers on every multifamily that comes on the MLS from Olympia to Marysville for about six months now, and have found that the best returns are always just south of Seattle.
Once you narrow down your area I would recommend finding an agent that knows the area like the back of their hand. They will be able to give you advice on which areas / streets to avoid.
Are you going to move to Seattle? Why do you want to invest here? If you are going to be doing out of state investing, it might be worth looking into somewhere you can receive better cash flow at a lower cost. Also keep in mind that Seattle becoming very tenant friendly.
I agree with Hans, Seattle is over inflated, and it's more and more difficult to find a deal that the numbers actually make sense on. As you move across the King County/ Pierce County line into Tacoma, the median house price falls almost $150,000. With Joint Base Fort Lewis/Mcchord (JLBM) that has several cities surrounding it, military rentals are in high demand, and the military gives soldiers a stipend for house that ranges between $1,300 and up. I'm former military, and understand that process well. I'd be happy to explain the benefits of it further if you need. I see a lot of multi-families in this area that are very well priced, with low vacancy rates and great positive cash flow. The link includes just a few multi-families around the JLBM area, just to give you an idea of what the market is like here. Let me know if you have any questions!
If your priority is cash flow, I would find something further away from the city of Seattle. The most ideal case is to find a suitable balance of both cash flow and appreciation.
I agree with all of the above. As a former property manager, I'm currently looking for a 5+ unit property and it will be more than likely in south king county. However I just found out that criminals (felonies only) are now a protected class in WA. So it would to be nice to be in an area around JBLM or a place like that because you'll always have a good pool of residents.
As an original New Yorker, I find landlord/tenant laws are VERY tenant- friendly.
@Maria Burks have a look at Everett up north of Seattle. Better appreciation and tenant quality (in my opinion) than Tacoma and southward. Have a look at the mayors annual city outlook which was presented last week for a great overview of what's happening around Everett http://myeverettnews.com/2016/11/02/hearing-everett-2017-budget-tonight/
Thanks everyone! I have some family in north washington, so I thought maybe investing there would be better than some place that I have no clue about.
I want to buy at a market that I can afford. I'm still researching around where I live now (SF Bay Area) but it's not looking good so I'm thinking about investing out of state. I'll definitely look into South of Seattle then and I will also try and find an agent that I can talk to regarding deals. Thank you for all the advice!
You're welcome! Feel free to contact me with any more questions. I service South Seattle and have spent most of my 10+ years in property management in that area as well. I'd be more than happy to answer your questions.
The courts here (eviction) in Pierce County are much more landlord friendly than they are in California !!! I came from CA and I will tell you that evictions are much less stressful for the landlord here. There are just so many opportunities for you if you plan to buy in Pierce County compared to SF Bay area. I have a duplex in Stockton and I'm not going to sell it but i would buy a duplex here in Tacoma or Puyallup in a hot second if I was looking for a great investment.
Seattle has a lot of pending legislation regarding landlording and in King County you MUST accept Section 8 so inform yourself before you buy but this is a great area to look into !!
@Mary Bass How are felons a protected class? Interesting. But I doubt that I will ever rent to one.
Depending on your budget, I think there are some good opportunities in Southeast Seattle to invest. As the light rail system continues to expand, there will be more and more appeal to live in the surrounding parts of Seattle. Good luck on your endeavors! Happy to be a resource in any way.
@James Marszalek I seem to remember hearing once that landlords are required to allow their military tenants break their leases if they go on deployment or something along those lines. Is there any truth to that?
@Ben Lukes Yes, the military clause is part of WA State Law. Here's the code:
RCW 59.18.220 (2) Any tenant who is a member of the armed forces, including the national guard and armed forces reserves, or that tenant's spouse or dependent, may terminate a tenancy for a specified time if the tenant receives reassignment or deployment orders. The tenant shall provide notice of the reassignment or deployment order to the landlord no later than seven days after receipt.
Originally posted by @Ben Lukes :
James Marszalek I seem to remember hearing once that landlords are required to allow their military tenants break their leases if they go on deployment or something along those lines. Is there any truth to that?
That is correct. It's true for any lease, even if that language is not in your lease. It's also true for program's like Home Partners of America, which is a "Lease with an Option to Purchase". It applies to PCS orders (Duty Station Change) or Deployment Orders.
There are duplexes that are cashflow on MLS in renton highlands which is a way better location than tacoma. I own multifamily there so i know the numbers. Renton highlands is going through gentrification right now it has a lot of rooom to grow both in appreciation and cash flow.
@James Marszalek So I've always thought of military tenants are pretty stable in part because of the stipend you mentioned. But doesn't the deployment and PCS issue cause problems for landlords that rent to military tenants? I would think a lot of people at JBLM would go on deployment at the same time, so not only would you lose your tenant, but it would also be pretty hard to find a replacement. Is this an issue? If so, how do you deal with it?
Hey @Ben Lukes . I'm prior military. Spent 7 years in the Army, and deployed twice, and lived off base almost the entire time. In almost every base across the country, in order to live off post, you have to be married, or a certain rank (typically higher ranking). Single guys that would otherwise live in the barracks are normally required to live on post, meaning that the majority of the people you will be renting to is a family, not a single soldier. Also note that the Military Clause in a lease agreement simply allows the soldier to break the lease without financial consequence. The clause doesn't say you have to hold the unit for the soldier while they're deployed, that wouldn't be reasonable. In this situation, the military sends a moving company to pack the contents of their unit, and puts it into storage for the term of the deployment. When the soldier returns, he/she secures new housing and they deliver the household goods to the new location. That explain it? Good question man.
As far as not being able to find a replacement, I've never had that problem here. I rent in popular neighborhoods that also happen to be convenient and close to the base. Also note, with a base as big as JLBM, it's highly unlikely the base would ever be 100% deployed at the same time. There's Always people incoming and outgoing. Unlike one of my other duty stations: Fort Wainwright, Alaska. 90,000 population total for the base and city. When we deployed, we ALL deployed, about 8,000 soldiers. Turned the city into a ghost town. So, there's a polar opposite for you. Don't buy rentals in Fairbanks, AK unless you have a plan B!
Thanks for the thorough explanation @James Marszalek , I really appreciate it. I've been looking around JBLM and also Bremerton for my first purchase, so I know military folks will be a big part of my tenant base.
Definitely. Feel free to reach out if you have any other questions. I've been on both sides of that coin for a while. Good luck!
Hi @Maria Burks ! Out of curiousity, do you now live in Washington, or are you out of state? I know that the returns in other states are quite a bit better for cash flow, so I'm curious about why you chose Washington - maybe you see a trend in my market that I'm blind to! Good luck :)
To answer your question, Curt. First of all, I agree with you. I was told that it was just passed and we will see more about it in the coming month or so. I'll report details when I see them. It's more important to to larger apartment communities that are more heavily looked at by Fair Housing.
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