Need Advice, About to Do First Deal in Bellevue, Washington [Seattle]
Hi All,
First post here. I'm new to REI. Goal is to make passive income through buy and hold.
Deal Background (skip ahead to numbers if not interested):
I got excited about real estate and read a few books and listened to the BP podcasts. I live in the Seattle area, so I soon realized that it's far from ideal for monthly cash flow. I decided my best bet was to look outside of my area or find something off-market to avoid heavy bidding/comp. I preferred to stay local because I really wanted something that I could manage hands-on for my first project.
I started talking to everyone I knew talking about investing and their experiences. I found a few people in my network who were looking to sell houses off the market. Interestingly enough, my landlords decided last week to move to Hawaii and they offered to sell their house below market value on a few conditions (they wanted to sell to someone they knew/trusted). We agreed to move forward today.
Details
Price on Zillow: $570k (3b 1ba). They think it will be higher after actual appraisal
Actual config: 5b 3ba (they turned a big garage into two additional rooms + bthrm)
Rental Income: Rooms are rented separately as room share. They get ~$2500 total, ~$2000 not including my room.. I already knew, but they admitted that they are not renting for market value. If I raise rent to market value I can get ~$3000 or more.
House is furnished and I can rent as furnished
Zip Code: 98007 (Bellevue)
Location: great location. on bus line. quiet neighborhood. near a park. walking distance to a college. high rental demand.
Other Thoughts
This seems like a great fit for my strategy since I can get cashflow on day 1 or house hack, with the potential for appreciation. I can also be nearby or even live in the house to manage. Rent demand is very strong for multiple reasons (several universities, low inventory, Microsoft/other companies in the area). It seems like the economics work out.
The landlords have done a great job of screening (they can be choosy with huge applicant pool) and creating a great rental environment. All of the guys in the house currently get along great and it is very laid back. They say that they will teach me their landlording techniques/philosophy before selling to me.
Questions
Would like to see what you think about the deal and if you have any buying tips (negotiation, appraisal, attorney, etc.)?
Anyone bought off-market from someone they knew/trusted before? Anything I should be aware of or be sure to do?
Thanks!
NM