First investment property multiplex hunting

12 Replies

We are just about to move to Seattle area which is very expensive purchase price so we are considering our first investment property being down south. We have been looking at properties in realtor.com but are kind of floundering for our next steps. Should we choose a definitive location and find a real estate agent there to help us? I'm a little lost on the first steps.

I would probably look for states that tend to be more landlord and business friendly. There are many investors that have found good opportunities in the southern states so I think you're on the right track. Before picking a particular state or area, I'd suggest narrowing down the locations you're thinking of investing and connecting with people who have experience investing in these areas through BiggerPockets and ask them. Besides Realtor.com, you can always try properties listed through Craigslist. I found two off-market deals going through Craigslist after I could not find any deals on MLS. You can also try local rental listings for properties or apartments for rent - and contact the property owner and see if they might be interested in selling - sometimes they might have high tenant turnover and may actually want to sell and willing to make a deal. Hope some of this info helps. Also, when you have decided on a particular area, you can always connect with a local realtor and ask them to set you up to receive MLS listings. You can likely find recommend realtors through the BiggerPockets community. Good luck and I hope some of this info helps.

@Michael Haas . It's very overwhelming trying to figure out how to start out! We don't have too much cash for a down payment so to purchase in Washington it seems like we would need to house hack to follow the VA or FHA loan policies but we would need to be close to base which is quite spendy. Using the 2%/50% rules of bigger pockets we haven't found anything that would even remotely work for us. That has led us to think about remotely purchasing some cheaper properties in Detroit or in southern USA but that intimidates me as well being so far away!

@Brandon Vukelich Unfortunately we don't have too much money for a down payment and in order to use our VA loan or FHA we would have to occupy a multi family. With us having to be close to the Navy Base in North Kitsap, I haven't been able to find anything that would be a good investment.

Originally posted by @Callie Mejia :

@Brandon Vukelich Unfortunately we don't have too much money for a down payment and in order to use our VA loan or FHA we would have to occupy a multi family. With us having to be close to the Navy Base in North Kitsap, I haven't been able to find anything that would be a good investment.

Ah, so possibly out in Bremerton or Port Orchard?  There are opportunities for 2-4 unit properties out there.  Most duplexes and triplexes have been moving fairly quickly.  If you'd like to share your criteria for a "good" investment, I can give you input on whether or not you're likely to find something to match.

 

@Callie Mejia the 2% rule is rarely achievable here without a massive rehab or re-development project. The 1% rule is more achievable, but even then its tough. We tend to target a GRM (Gross Rent Multiplier) of 10 or less, which puts you just under the 1% rule. That being said, its jaw-dropping how much wealth my wife and I have built through appreciation and loan pay-down... 5 of our 7 properties do cash-flow quite well, but cash flow is only one part of building multi-generational wealth through real estate investing.

The VA loan should work well for you, even with very little cash to invest. I'm partial to house hacking over out-of state investing, especially if you have a VA loan entitlement. We've house-hacked most of our rental properties here and LOVE this strategy. I'm happy to talk with you on the phone a bit to help you narrow down what you're looking for and how to move forward.

PS - thank you for your service!

@Callie Mejia , the house hacking method could work for you. I am in Poulsbo. Smaller MF listings do pop up, mostly in Bremerton. But there are some in the Silverdale area as well. Feel free to shoot me a message and we can chat more about what you're looking for, what kind of rehab you'd be up for handling, etc. Kitsap is a lovely area. Plus, easy access to the Seattle side for when things calm down. :-/ 

Not knowing your financial situation, I think you'd be able to find something in Bremerton for sure. Tacoma is past competitive, so unless you're up for a pretty big project/rehab, you may want to stick to Bremerton. Welcome to Rainytown!

Hi @Callie Mejia - Welcome to the Pacific Northwest and thank you for your service. House-hacking is a great strategy and a great way to learn the in's and out's of real estate investing while building your finances and balance sheet. I just helped a client purchase a 6-plex over in Bremerton and believe there is a lot to like about the area. Hope to see you around the forums! 

It sounds like Bremerton might be a good fit? You might look into houses with ADUs and house hack that way. The city is also going to be relaxing their ordinances on new ADU construction in order to comply with the bill E2SHB 1923 that passed last year, which should make new ADUs cheaper to build. If you are planning on staying in the area or keeping your investment property for a while then that could be a strategy as well.

We started off investing in Bremerton, fell in love with it and then moved there. I won't sugar coat it entirely, the housing stock is old and a lot of the houses need work (more often than not, a LOT of work). We've really loved being close to everything: (covid aside) downtown with all the breweries and restaurants, just a few minutes away from hiking trails and a "secret" waterfall, 30 minutes to Seattle via fast ferry etc. If you do end up considering Bremerton and have any questions on neighborhoods, I'm happy to throw in my two cents!

@Callie Mejia I would highly encourage you house hacking over going out of state I 100% am partial towards this than going OOS like @Michael Haas mentioned.

It would be a crime for you to have the option to use the VA loan to house hack in an area like Seattle but opt out to invest OOS instead. :)

Seriously though, get with an agent in your area that is an investor themselves and/or understands 2-4 unit investing well in your area. As hot as the market is right now the buyers that I’ve been working with have been picking up great house hack opportunities in 2-4 unit properties here in San Diego.

Best of luck to you!