Just hit $70,000 savrd as a student in Seattle, what now?

Question

I just hit the savings goal I wanted to hit before graduating in June. I’ll start work full time in September and make $79,000. I’d like to do rentals but Seattle is looking like it’s about to crash.

Do I buy locally in a less expensive area?

Do I just do 20% down or shoot for something bigger at closure to 10-15%?

Should I go out of state?

Are there any classes I should take?

Sorry for the newbie questions, I appreciate any advice you have!

Michael Haas · Answer

I second the house hacking recommendation -We house hacked our way to 3 properties in Seattle and have 5 now - it really works! With the WSHFC down payment assistance program you can get into a house for pretty much just the closing costs- could be just 6k up front cash to close on a $500k house. If that house has a unfinished basement you can finish and rent out, or even just extra rent-able bedrooms, your mortgage payment will likely be significantly less than you currently pay for rent, + you reap all the tax benefits and forced savings effects of home-ownership.

I've had success with cashflow rentals in Seattle by getting off the beaten path- there are established investors bidding up the price (and therefore compressing the cap rate) on many small multi-families, but those same investors are not going after large 6-9 bedrooms SFHs that you can rent by the room to young professionals and college students. Most are also are not establishing STRs, especially now that Seattle regulations limit most families to just 1 Airbnb/STR outside their primary residence.

Send me a message if you want to talk more about House Hacking. Its a great and low cost way to get started, and we wouldn't have been able to reach financial independence so quickly any other way.

PS: Don't try to time the market - I personally don't think Seattle is about to crash but hey, you could be right, I could be right, who knows. Make good investments no matter the market climate and you'll do fine.

Mike Dymski · Answer

Congrats, that's impressive. How in the world did you save so much while in school?

Maybe start out by house hacking to cover your housing costs.

Mike Dymski · Answer

August will be here in no time. It takes time to figure out where and what to buy anyway and how to property manage.

This is a refreshing change from all the college drop-out posts lately...with all the limiting beliefs on debt and opportunity cost.

Theresa Harris · Answer

@Kelly McCandless First congrats on saving $70K. You can see if there is a local meet up in your area where you can talk to people in your area who are also interested in real estate. Also talk to a bank or credit union to find out how much money you could borrow for a mortgage. That will have some impact on what you can buy and where. There is nothing wrong with buying in another market, but make sure you can either handle it remotely (buy within a short drive) or find a good PM. Don't be in a rush to buy your first place, but at the same time if you find something where the numbers work, go for it.

Are your plans long term buy and hold? Short term rentals? flips?

I wouldn't take classes.

Are your plans long term buy and hold? Short term rentals? flips?

I wouldn't take classes.

Kelly McCandless · Answer

@Mike Dymski

Waiting definitely wouldn’t hurt and it’d be a good education period.

It turned out well but part of it was going into a major where I knew there’d be a job. I can see how it wouldn’t work out well for a lot of people.

Kelly McCandless · Answer

@Mike Dymski I worked for years saving up for school, but then got scholarships that covered all my schools and living expenses. I also majored in a field with lucrative internships and lives at home.

House hacking sounds like a good choice. I won’t know my work location until August. Should I wait until I have a solid idea of location then?

Kelly McCandless · Answer

@Theresa Harris

Thank you for the advice.

I’m interested in long term multi family rentals, but single family is likely where I’ll start for cost reasons. I just put a few cities into the keyword search to look for meetups upon reading this, so thank you for suggesting it.

Nathan Norway · Answer

Well for starters congrats on that milestone! I'd guess you are familiar with the forums and resources on here so that's a good start.

What is your long term goal? Do you want to house hack to reduce your expenses and increase your ability to save? Do you want to be in apartment complex syndication? Do you want to fix and flip single family homes? I'd start by reading some books / articles and start defining your investing goals to help you narrow down your options for what you've worked so hard to save up for!

David Greene wrote books on out of state investing and BRRRR which could both be applicable to you if your market is pricey. It really comes down to how much those percentages are of your savings, how much cash flow and appreciation could you get with that money buying 1 property versus 3? Keep learning and start to develop a team of people around you to help you achieve your goals!

Best of luck to you!

Kelly McCandless · Answer

@Nathan Norway

Thanks for your reply. BRRR and moving towards apartment complexes is my main interest. I would like to eventually make enough to do it full time. I enjoy my field now but don’t want to feel trapped in it.

Roni E. · Answer

I would look at passive investing into a deal as you stated you are working full time. As always do your homework.

Just hit $70,000 savrd as a student in Seattle, what now?

Just hit $70,000 savrd as a student in Seattle, what now?

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