Goals to Acquire First Rental Property in WA

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Goals to Acquire First Rental Property in WA

Lucy Lang
Member since 2019 · 3 posts · 7 votes

Hi Everyone! I'm new to Bigger Pockets and my goal in 2021 is get started with acquiring my first rental property. It'll be a SFH with a MIL unit or ADU where I can house hack and use the collected rent to pay down my mortgage. I need to get the ball rolling and eventually utilize other RE strategies such as BRRRR.

I am located in Seattle, WA. Currently look at homes in Edmonds, Shoreline, and Lynnwood. 

For my agents/investors, do you have any other suggestions? What has your experience been like with this market? Would love your feedback/input. 

Thanks in advance! 

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Michael HaasBusiness Member
Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
5y

@Lucy Lang the market is definitely hot here, but Househacking works spectacularly well. We're on our 4th house hack personally, and have just been moving up and converting the old properties to 100% rentals as we go.

I think you're looking at some great areas! Price points tend to be lower on the South Side of Seattle than on the North Side, so if you like Edmonds, Shoreline, Lynnwood I would also consider Renton, Burien, and others on the South Side. A lot of this depends on your loan pre-approval amount and the affordability of each of those neighboorhoods.

Just a couple tips for you as you get started Househacking:

1. If you find a property with a second kitchen (ADU or MIL), be aware that 80% or more of those units have been built without permits. Not a deal breaker necessarily, but a risk to be aware of and mitigate.

2. Brush up on code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)

3. Check the unrelated persons count in any city you're interested in. Seattle allows 8 unrelated persons in a rental house, unincorporated Snohomish County allows 6, but some cities allow as few as 3-4. House hacking financials get significantly stronger as you increase the bed count above 4, or add a ADU or separate dwelling unit. *This is more important if you're "renting by the room" with roommates than if you're "Renting by the unit" in a multifamily or a single family with your own private kitchen and entrance.

4. I've had success with Househacks and cashflow rentals around 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 5-9 bedrooms SFHs that you can househack by the room or split up with an ADU / MIL. Establishing a short term rental / airbnb in part of the home is another great way to maximize rental income. 

Cheers and good luck! Message me anytime if you'd like to grab a coffee or hop on a phone call and talk house-hacking, its my most used REI strategy and the most used strategy of my clients as well... and it has definitely changed @Jess Haas and my financial and personal lives for the better!

[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
WebsiteView Page
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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Lucy Lang:

    Hi Everyone! I'm new to Bigger Pockets and my goal in 2021 is get started with acquiring my first rental property. It'll be a SFH with a MIL unit or ADU where I can house hack and use the collected rent to pay down my mortgage. I need to get the ball rolling and eventually utilize other RE strategies such as BRRRR.

    I am located in Seattle, WA. Currently look at homes in Edmonds, Shoreline, and Lynnwood. 

    For my agents/investors, do you have any other suggestions? What has your experience been like with this market? Would love your feedback/input. 

    Thanks in advance! 

    Welcome,  Lucy! 

    I don't have any tips for your market, but have been househacking with a MIL apt for 13 years and highly recommend it. If we were to live in the apt, our payment would be fully covered. 

    Glad to have you!

    2Reply
  • Lucy Lang
    OP
    Member since 2019 · 3 posts · 7 votes
    5y

    Appreciate the warm welcome @Steve Vaughan! So glad that house hacking has worked out for you.

    I'm currently working from home until required I'm required to go back to the office. My plan is to stay 20-30 min commute into downtown Seattle in case. I am also open to other areas of WA if the commute is reasonable. I'm still fairly new to the Seattle market since I've only moved out here a year ago. 

    Looking forward to connecting with more individuals on BP! :) 

    2Reply
  • Aaron Flake
    Real Estate Agent · Mukilteo, WA · Member since 2018 · 124 posts · 148 votes
    5y

    Hi Lucy! I'm an agent with Windermere in Mukilteo and also an investor within Snohomish County. The market is crazy right now but I'd love to help you find an investment property to meet your goals! Feel free to message me with any specific questions or criteria you are looking for in a home. Welcome to Biggerpockets!

    1Reply
  • Michael HaasBusiness Member
    Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
    5y

    @Lucy Lang the market is definitely hot here, but Househacking works spectacularly well. We're on our 4th house hack personally, and have just been moving up and converting the old properties to 100% rentals as we go.

    I think you're looking at some great areas! Price points tend to be lower on the South Side of Seattle than on the North Side, so if you like Edmonds, Shoreline, Lynnwood I would also consider Renton, Burien, and others on the South Side. A lot of this depends on your loan pre-approval amount and the affordability of each of those neighboorhoods.

    Just a couple tips for you as you get started Househacking:

    1. If you find a property with a second kitchen (ADU or MIL), be aware that 80% or more of those units have been built without permits. Not a deal breaker necessarily, but a risk to be aware of and mitigate.

    2. Brush up on code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)

    3. Check the unrelated persons count in any city you're interested in. Seattle allows 8 unrelated persons in a rental house, unincorporated Snohomish County allows 6, but some cities allow as few as 3-4. House hacking financials get significantly stronger as you increase the bed count above 4, or add a ADU or separate dwelling unit. *This is more important if you're "renting by the room" with roommates than if you're "Renting by the unit" in a multifamily or a single family with your own private kitchen and entrance.

    4. I've had success with Househacks and cashflow rentals around 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 5-9 bedrooms SFHs that you can househack by the room or split up with an ADU / MIL. Establishing a short term rental / airbnb in part of the home is another great way to maximize rental income. 

    Cheers and good luck! Message me anytime if you'd like to grab a coffee or hop on a phone call and talk house-hacking, its my most used REI strategy and the most used strategy of my clients as well... and it has definitely changed @Jess Haas and my financial and personal lives for the better!

    [email protected]408-439-7873
    HouseHack Seattle | Michael Haas & Team572 Reviews
    WebsiteView Page
    8Reply
  • Sherief Elbassuoni
    Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
    5y

    @Lucy Lang, welcome to BP. MIL or ADU are two forms of house hacking that we use a lot to force appreciate the property, add value, and add more rooms.

    Regarding the Cities, it all depends on two main factors. How far you are willing to live away from your work (commute time) and the number in the preapproval letter from the lender. Right now, a lot of people are working from home, but it is expeted that some will keep doing that, while others go back to the office.

    You can also keep you options open for locations that are served by light rail. This will open more options for you.

    Feel free to reach out. I am always open to more conversation over phone or coffee!

    Best of luck!

    3Reply
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