Tacoma area multi-family

[David Goetz]

Hello fellow BPers,

I am currently living near Tacoma, WA and looking to buy a 2-4 unit multi-family property in pierce county. I would like to find a local RE agent that is knowledgeable about investing in the area and looking for recommendations/references.

The plan would be to finance with 20% down payment and I am looking for positive cash flow even being in this expensive area.

I appreciate any input

David

[Michael Haas]

Hey David,

Given that Tacoma and Seattle both have ADU friendly laws on the books, we've found Single Family to cashflow better than multifamily in many cases if the single family home has an existing ADU, or the potential to put one in.

There's a lot we can talk about on ADU's, but one thing worth calling out is that as many as 90% of them have been built without permits... so although they're legal in Tacoma, they're only legal when permitted and many of those on the market are not. There's tons of options for legalizing an unpermitted unit or leaving it as it is, so I'd recommend exercising caution, rather than avoiding unpermitted work all-together.

If you're buying a true multifamily, one benefit of house hacking is the ability to put 3.5% down on a FHA loan- this can push your cash-on-cash return through the roof, and you only need to live in the property for a year to qualify for an owner occupant (low down payment loan).

If you end up househacking a SFH with or without an ADU you can get better loan terms going conventional, with a 5% downpayment.

Feel free to hit me up for a phone call or a coffee to chat more - we do a lot of multifamily and single-family w/ ADU's in Pierce and King County. Cheers!