Rental Property Investor · Seattle, WA · Member since 2019 · 12 posts · 1 vote
Long time podcast listener. Recent action-taker. ;)
My spouse and I recently agreed to take a more strategic approach to purchasing a home than just buying in the best school district in the Seattle area.
We've agreed to use my VA Loan to purchase a 2+ unit property in one of the following Washington cities:
- Renton/South Seattle
- Tacoma
- Olympia
- Spokane
We’d like to stay under $550k and do not intend on putting any money down.
Spokane offers the most inventory at a comparatively cheap rate. But, I’m concerned with its long-term, economic resiliency. The other metro-areas are more economically diverse and show signs of economic/population growth.
As new investors with the ability to relocate virtually anywhere in the west, how should we think about the evaluation of each market for BRRRR of multi-family properties?
Spokane, WA · Member since 2018 · 28 posts · 9 votes
7y
As far as growth is concerned Spokane is a great market. I would not invest in Seattle. I base this on political climate and projected industry expansion/contraction. Predicting the future is tough. My thoughts are that you can make money in any market, it is just harder in a stagnant or contracting one.
Spokane, WA · Member since 2018 · 28 posts · 9 votes
7y
As far as growth is concerned Spokane is a great market. I would not invest in Seattle. I base this on political climate and projected industry expansion/contraction. Predicting the future is tough. My thoughts are that you can make money in any market, it is just harder in a stagnant or contracting one.
Though Olympia might not be the most dynamic market, 3 things come to mind as to what Oly has going for it that make it a stable area in which to buy rentals:
1. It is on the I-5 corridor. Growth is inevitable along I-5. We also get a lot of Seattle and Tacoma commuters living down here for less expensive housing prices/rent.
2. Jobs market is stable largely due to the state government and military (JBLM).
3. More solid job growth due to the healthcare industry. Thurston County has an older average population compared to Pierce and King, which means the healthcare and elderly care industries (and their jobs) will continue to grow here.
Spokane, WA · Member since 2018 · 28 posts · 9 votes
7y
Are you interested in growth areas or revitalize areas. I am looking for revitalization. There are neighborhoods in the downtown area (north and east) where I am focusing. There are traditionally unkempt areas that are gentrifying and surrounding areas are ripe for money making fix and flip opportunities.
Real Estate Broker · Olympia, WA · Member since 2016 · 79 posts · 55 votes
7y
@Stefan Winkler well I don't see a lot of multifamily (2-4 units) being built currently. Mostly I see SFR developments and large apartment complexes last couple years.
Within the Urban Growth Area (UGA) of the 3 cities of north Thurston County-- Olympia, Lacey, Tumwater, you will find multifamily homes sprinkled throughout. Olympia and Lacey will have the most multifamily homes. The Tanglewilde-Thompson Place neighborhoods in Lacey are probably the best right now for finding (or converting into) a multifamily home. They are growing due to the Martin Way commercial corridor re-development... we finally have a Del Taco! :) ...and eastern Lacey (locally referred to as Hawks Prairie) that is seeing a lot of growth right now. The intersection of Martin Way and Marvin Rd just off I-5 exit 111 is the busiest intersection in the entire county, and it is right in the middle of the neighborhoods I mentioned.
Rental Property Investor · Seattle, WA · Member since 2019 · 12 posts · 1 vote
7y
@John Ala, I’m interested in ‘up and coming’ areas (hopefully not truly gentrifying). I’ll look around the areas you suggested. Thank you for your insights.
Real Estate Broker · Seattle, WA · Member since 2017 · 139 posts · 82 votes
7y
While you certainly get more for your $ in Spokane, the Puget Sound area is not likely to have any major drops in value for a long time. I recently attended a training with Denise Lones (the Lones Group) who is an expert on predicting the market. She pointed out the many large employers in the Seattle area, and the relative housing shortage. Based on that, if you can find something in the Renton area that cashflows, I would buy there because it will always be a good place to commute from into Seattle. If this is a place you’re going to live in for any period of time, also just consider where you want to live.
Rental Property Investor · Olympia, WA · Member since 2010 · 127 posts · 76 votes
7y
I think your best bet with the regions you're considering is probably either Olympia or Spokane/Spokane Valley. I've looked a lot at putting some chips on Spokane given their market is strong and likely to grow further. For an inland northwest city, Spokane is dirt cheap. There is some crime there and some rough neighborhoods, but there are some good small multifamily opportunities in good neighborhoods as well.
Olympia is still priced well in comparison to it's I-5 neighbors, and I can echo @Andrew Hodgson's optimism on the market: there is a lot of growth in the area as well as price pressure from Seattle/Tacoma markets. The economy is diverse and from a citizen-perspective, it makes the city interesting and vibrant. Cash flow is getting harder here, but it's a good long-term equity growth area. I think you can get both in Centralia/Chehalis, just 30 min south of Olympia.
Rental Property Investor · Seattle, WA · Member since 2019 · 12 posts · 1 vote
7y
@Jared Boundy I agree on the stability of the area. Our emotions lean towards Renton. We’ve lived in the area for a couple of years and like what it has to offer a young family. I could see buying a small duplex in Renton to get a local “foothold” and then looking elsewhere for future investment.
Rental Property Investor · Olympia, WA · Member since 2010 · 127 posts · 76 votes
7y
@Stefan Winkler I did bring up Centralia/Chehalis, which is 30 minutes south of Olympia. I'm not sure if it's designated this way, but I'd say it's a tertiary Seattle market, but probably too far for any Seattle commuting. But for cash flow and equity balance, it looks good from here. My job takes me to Centralia occasionally, so it's convenient for me. We own a 4-plex there (and looking for commercial MF properties there now...) and have been pleased with the cash flow and appreciation over the last couple years.
@Morris Sandvig If you're looking at the market, not so often! I almost ignore the MLS these days (ok, not completely) because there is precious little multifamily inventory and everyone is competing for the same deals. I bought some units off market last year via direct mail and wholesalers and all the units I bought were purchased with cash flow in mind. But if you want to be able to buy off the MLS and cash flow, I think the best bet for our friend Stefan is a more approachable market like Spokane or Centralia.