Investing in Aberdeen WA

Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes

Hey All,

Does anyone out there besides Brandon have experience investing in Aberdeen, WA or Gray's Harbor in general?

I have been researching the area a lot and would love to hear some investment feedback. It seems to be the only place in Western Washington to meet the 2% rule.

Thanks,

Grant

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Brandon TurnerPro Member

Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes

12y

Noooo keep the masses away!! ;)

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Stephanie Dupuis
Residential Real Estate Broker · Bremerton, WA · Member since 2013 · 494 posts · 142 votes
12y
Connect with Michele Fischer form Longview, WA.
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Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
12y
Noooo keep the masses away!! ;)
Podcast Guest on Show #92
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OP
Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes
12y
Thanks @Stephanie Dupuis for the tip, I will contact Michelle.

And sorry @Brandon Turner the secret is out!! ; )
1 Reply
Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Hi Grant,

I do not personally invest there but have helped clients buy/sell there. Currently under contract helping seller/buyer on a 26 unit downtown so I do all the underwriting and valuation. What questions do you have?
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OP
Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes
12y
Zach,

I am looking for REAL vacancy rates, top employers and the outlook for the area over the next 10-20 years.

Thanks,
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Grant,

The problem with Aberdeen currently is that it’s located within Grays Harbor which overall as a county has the 2nd highest unemployment rate; however, they have a large deep water port and the only deep water port on Washington’s Pacific Coast. There was talk of having it be a crude oil gateway, but that has not gained traction yet. This would change everything in 10-20 year outlook, if it were incorporated. If you had a crystal ball and could predict that it would be in the future, it would be worth buying all these cheap properties in Aberdeen. Aberdeen is probably the largest retail center within the area, but it’s still not very strong. If you’re interested in demographics, I have these and would be happy to send them.

In the 26 unit were seeing a lot of seasonal workers come back for the winter wanting to lease up the past couple months.

Brandon may be able to elaborate more on this as he is local to the area.

I am not sure you can gather a real vacancy rate for "Aberdeen" as it would be hard to sift through all the stabilized and distressed data.

If it's in Aberdeen I am usually working with some sort of distressed property as I don't know anyone looking for stabalized units there.
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
When I am personally looking to invest or helping a client I will often swing by the cities economic/community development individuals office and have a chat. They can be a great resource for information, as can the building and permitting to see what's going on.I haven't spoke with Lisa in months now but she is very nice.

http://aberdeenwa.gov/department-directory/
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Jeff S.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
12y
Was talking to an agent there and he said " the economy here is collapsing".
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Ah, forgot to add another point, I would encourage you to have your agent (if you don't subscribe to the software to do this) provide you lists, demographics, employers, ect - the lists of reports that are available to us out there is insane.
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Originally posted by Jeff S.:
Was talking to an agent there and he said " the economy here is collapsing".

It's been collapsing for a while. Was there any bright side to his outlook or all gloom and doom?
1 Reply
Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Demographics
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Jeff S.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
12y
@Zach Schwarzmiller I was just trying to get some info and he said that. Don't think he needs to sell RE to eat.

When I was there a headline talked about laying off city bus drivers. Was just thinking about those landlords that own their properties.

I like it up there though. May venture up there but busy here for now.
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Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
12y
Yeah, Aberdeen is interesting. I wouldn't say "collapsing" at all, but I don't foresee a lot of growth. It's an economy held up largely by welfare, social security, and other government programs, so I don't see it getting worse. If anything, I think it's more stable because of that.

I typically run a 98% occupancy, but I'm also very efficient at getting properties re-rented, since I rely on that cash flow to survive. I would guess average would be around 95%.

The biggest problem with Grays Harbor right now, I think, is the Flood Insurance problem. Over the past month, we've been hearing doom and gloom stories of flood insurance rates being jacked up to absurd levels. Not all of Grays Harbor is in the flood zone, but the cheap houses are, and I have a number of them there. Each of these properties are now required to have a $550 elevation certificate, which is a nice chunk of money from my pocket. Personally, I don't think I'll buy any more in the flood zone unless I'm buying with Cash (so no flood is required) or flipping to a cash investor.

Also, the other great thing about Grays Harbor is that there is no violence problem. Like, I'm never fearful anywhere. The biggest problem we have is drugs, but those are fairly easy to screen for. But it is sad to see how many people here have DUIs and felonies from drug charges. Without getting too political, I think that's a result of the "welfare" mentality here on the Harbor, where a lot of people don't have to work.

Speaking of work - although the unemployment rate is really high - I've never known a good person that couldn't find a job. The unemployment rate is high because the majority of those folks were used to working $45 an hour jobs at the lumber mills, and when they closed - those people just stopped looking. There are "now hiring" signs all over town- but they are typically minimum wage jobs. Which, again, is why I think Grays Harbor is a really stable place to rent- cause the rental prices are all in line with minimum wage.

Anyways, those are my 2 cents on the issue!
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
Brandon has great feedback. I know a lot of our tenants in the 26 unit fit criteria as well. Were renting small studio's fairly cheaply so it's easy to keep them full with individuals with lower income.
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OP
Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes
12y
This is why BiggerPockets is AWESOME!!! I spent many days, nights and hours researching investing in Aberdeen and learned far more here in this post.

Thanks so much guys!!!!

@Brandon Turner

@Brandon Turner
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Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
12y
Nice @Account Closed ! And honestly, if you ever want a tour of the area, i'd be more than happy to show you the good/bad/ugly of Aberdeen. I think it's a good place to invest IF you know how to separate those areas and know what you are getting into!
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Henry Gallagher
Hoquiam, WA · Member since 2014 · 5 posts · 0 votes
12y
"Originally posted by @Brandon Turner:

The biggest problem with Grays Harbor right now, I think, is the Flood Insurance problem. Over the past month, we've been hearing doom and gloom stories of flood insurance rates being jacked up to absurd levels."

I've also been hearing the same thing. I'm curious to learn more about it so I can figure out how much truth there is to the doom and gloom.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
I like to fly into the airport and have lunch.. other than that I have looked at financing a few developments and Multi.. Its a very sterio typical dead Timber fishing related town in the Northwest. Other than the metro areas of Seattle and PDX.. most of the Oregon and WA coast has been in a depression state for 20 years or longer. probably when some of you younger guys were just in grade school. caveat Emptor would be the word of the day from my perspective.. And its cheap for a reason. its tweaker ville
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Zach Schwarzmiller
Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
12y
@Jay Hinrichs I used to fly there for lunch too!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Zach Schwarzmiller

SR-22/G2
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Henry Gallagher
Hoquiam, WA · Member since 2014 · 5 posts · 0 votes
12y
Originally posted by @Jay Hinrichs:
I like to fly into the airport and have lunch..

Just a heads up before you fly down here next time is Lanas cafe is moving from the airport into downtown Hoquiam. They've outgrown the current space at the airport and will be moving into a larger space. Maybe someone else will move into the old spot. It was a real treat to watch planes takeoff and land while you eat.
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Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
12y
Some of you pilot guys should fly in for lunch and come take me out on a flight! :)

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Lorin K.
Tacoma, WA · Member since 2015 · 141 posts · 29 votes
9y
I was working for a company that needed me to drive into Aberdeen. I have lived in the Sound since 1975 and never been to the city. I do agree the city is very depressed. I remember standing on the second floor of the highschool looking at all the houses and they looked all weathered and beaten. It still amazes me just how cheap these homes are compared to the rest of western washington all the way up to Blaine Washington, another town I love.
Did some one say they had a flood plain map? What about parking a house boat on a empty lot? :)
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Mike Kulakevich
Vancouver, WA · Member since 2017 · 1 post · 4 votes
9y
I see this conversation happened four years ago. Does anyone have an update on what is happening in this area now? The economy and @Brandon Turner what all happened on "doom and gloom stories of flood insurance rates"?
4 Reply
Christian Soldat
Aberdeen, WA · Member since 2017 · 2 posts · 2 votes
8y
I live in Aberdeen now; just moved here after retirement due to low cost of living and land. Looking into investment property/commercial property. Does anyone have any updated info on the current environment in Aberdeen area? I drive around and it looks like a bunch of drifters and is definitely a low income area; my initial thoughts are: if only someone could figure out how to catch all the pass through traffic going to west beach or ocean shores and the coast. I know overstock.com had facilities in the near by area...I could only hope that other BIG companies would look into this area as well (i.e. Amazon).
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