I was looking at Zillow and Redfin for a potential sfh to buy as a first cash-flow investment, but everything that I found was a negative cash flow even before the rehab costs.
I live in Seattle and was scouting for anything in a 1.5h drive radius (Tacoma, Marysville, Bremerton).
If you found anything in this area in 2019 - could you please share what it was? So that I callibrate a bit towards what's feasible? Was it on MLS or an off market deal?
I think what I am asking for is an inspiration :)
Thank you in advance!
It is very hard to find cash flowing SFR in most parts of western Washington right now. Anything north of Pierce county is going to be rather expensive and you just can't get high enough rents to cashflow on the property. I would consider looking further south in centralia, chehalis, and Longview. Pretty much anything south of Olympia but along I-5. I just bought in Klamath Falls, OR to make a test run down there.
@Justin Frank Thank you, Justin! That was my impression as well. Good luck with your test run ;)
You'll have to venture outside the "Seattle Area" for sure. Don't be afraid to look east as well. There are a lot of small farming towns that could work or go really far east to Spokane or Tri-cities areas.
Yes, Seattle (King Co) is tight. There are still opportunities in the greater Tacoma area. Are you fixed on SF only? Depending on what you are looking to invest, you may be better off looking for 2-4 unit property. If you're willing to share you investment goal/target, I may be able to provide a little further input.
@Brandon Vukelich , thank you! I am not fixed on sfh, however many sources recommend it for a starter.
My main goal is to diversify currently heavily stock/bond invested portfolio + gain experience. Initial budget of 30k +/- and cap rate of 5-10%
@Nik Moushon Thanks! I will definitely be checking there.. but wanted to see if there is something I missed closer first ;)
@Pavel Gritsai we have been purchasing small multi families in Everett since 2013. Purchased 20 in units in 2018 and closed a fourplex at 2927 Federal Ave (REDFIN should have all the details on it) so far in 2019. Everett is the best market around IMO
@Grant Fosheim thank you! That is very good to hear! Hope your business prospers!
I second @Grant Fosheim , look for Everett to be the next Tacoma.
@Pavel Gritsai - My clients have been finding cash-flowing rental properties throughout South King and Pierce Counties. Some are on-market deals, some are off-market. Some are SFR, some are multifamily. It really depends on the buyer's strategy and what they are trying to accomplish.
I recently helped a buyer purchase a 4-plex in Northern Tacoma for a househack. Another client bought a duplex in Lakewood for $270K that rents for around $2400/mo. Another an SFR in East Tacoma for $280K. On the surface those deals may seem good to one investor and bad to another; it really just depends what each wants. For example, the fourplex is in a A-class location and has about $200K in potential equity with a little TLC that the buyer wants to do himself because he has the skill set. The Lakewood duplex was an out of state investor looking for cashflow in a gentrifying area with zoning upside. The SFR buyer makes a bunch ton of money on his W2/1099 and simply wants to buy the house, pay it off, make some cosmetic updates and then do a lease-option in an appreciating area.
I strongly recommend connecting with an experienced and knowledgeable agent who invests in real estate him/herself and leveraging their knowledge to help you find the right property.
@Aaron Nelson thank you for the very detailed response and a good advice!