Investment outlook for Tacoma / WA

Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes

I am an investor from Seattle area. I am looking into Tacoma area to grow my portfolio (Buy and Hold). The cash flow is reasonable, and there are some fixer lowers readily available.

What do people generally feel about Tacoma, maybe 10/20 years from today? On one hand there is hope that Tacoma can become what is Oakland for SF, on the other hand with high crime rates, and not much high quality local employment it can continue to remain as a black spot in the greater Seattle area.

I was looking into the news of light rail expansion, but appears that it is yet to be voted.

What are your thoughts about Tacoma in general?

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Jameson Sullivan

Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes

I work as a commercial broker in Washington and am based out of Tacoma and we are seeing a lot of major businesses open units here in Tacoma coming from not only Seattle but out of state as well. This does not speak to the residential market, I understand, however the long term outlook on many neighborhoods in Tacoma is bullish. Personally I plan to continue investing here as I think people will continue to flee 4 and 5 dollar a foot rents in Seattle for a more comfortable 1.75 to 2.50. The construction of a train only adds to the reason for otherwise Seattle residents to move down.

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Erfan Nezami
Bothell, WA · Member since 2015 · 3 posts · 0 votes
10y
I am too interested to know what BP investor think about this question
0 Reply
Bruce Stayner
Real Estate Investor · Snohomish, WA · Member since 2012 · 15 posts · 5 votes
10y
I own three SFR in Tacoma. As you said I bought them as fixers and the cash flow is great. On the rare occaision I have a vacancy I put an ad on craigslist and have multiple applications within 24 hours. Most of them from people who actually work in Seattle. People are looking to move down there in order to escape the high rents in Seattle. I think it is a trend that will only continue.
3 Reply
Tom G.
Investor · Olympia, WA · Member since 2015 · 97 posts · 31 votes
10y
Tacoma is a wonderful little city that will be a real jewel in the near future. Crime trends are consistently and rapidly falling and we are seeing a strong revival in several areas. I have a dozen properties here and they are among my favorite.
2 Reply
Stacey T Rodgers
Tacoma, WA · Member since 2016 · 10 posts · 2 votes
10y
I am looking for mentor/partner that can show me the ropes. I moved the area about 2 yrs ago and I am new to this business. I am ready to learn and put 100% effort into this.
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Pete Perez
Engineer/Real Estate Investor · Renton, WA · Member since 2015 · 368 posts · 120 votes
10y
@Rudy Manna
Is it possible have anything more than a guess regarding the outlook of a city 10/20 years in the future? This isn't intended to be a mean spirited question at all. Just curiosity. What factors would you use to make that type of prediction?
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Adrian Chu
Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
10y
There is limit land in the Greater Seattle area. To the west is the sound, to the east are the mountains, the most logical expansion is north or south. Right now, there is already a Sounder commuter train that takes people to/from Seattle during rush hours. With prices skyrocketing in Seattle, we are seeing the growth expand north/south. Got to have a place to fit everybody. :)
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Tim Angevine
Contractor · Spokane, WA · Member since 2013 · 25 posts · 12 votes
10y
With land becoming less and less available in King County I think that you are going to see solid overflow into Pierce county that being Tacoma and surrounding areas. If you go down Meridian on south hill all you see is building, Pierce county is going to continue to explode. Tacoma is going to look more and more appealing to the buyers getting priced out of the Seattle area. Just my two cents.
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Rudy Manna
OP
Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
10y
Its good to hear that fellow investors are mostly bullish about Tacoma.
Most of the growth in Tacoma so far is driven by the fact that Tacoma was one of the hardest hit in 2008 recession. Even then current prices are 10% lower compared to 2008 highs.
We can all agree that Tacoma will continue to grow as Seattle grows, but the point is that can Tacoma grow as fast as the areas closer to Seattle (or at least close)? If there is correction, how badly Tacoma will be affected? Are there local dynamics (Tacoma jobs/safety) strong enough?
Agree some people from Seattle will move to Tacoma but I can argue that it will be a very small trickle down effect. There will be cheaper condos in Seattle area, constructions in North and South all the way till Tacoma.
My point is without any game changers such as light rail extensions or large employer setting base in Tacoma, growth rate in Tacoma will be lower than Seattle and immediate neighbourhood.
I like the cash flow and buying in tacoma for that. But less bullish on growth.
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Ryland Taniguchi
San Francisco, CA · Member since 2015 · 786 posts · 717 votes
10y
Originally posted by @Adrian Chu:
There is limit land in the Greater Seattle area. To the west is the sound, to the east are the mountains, the most logical expansion is north or south. Right now, there is already a Sounder commuter train that takes people to/from Seattle during rush hours. With prices skyrocketing in Seattle, we are seeing the growth expand north/south. Got to have a place to fit everybody. :)
With the urban village strategy, the trend is for more people moving back into the urban core and the city of seattle keeps increasing density.
The trend will be migrations to central seattle and shoreline. I own a lot of cash flow rental properties in Tacoma but I don't think the trend is moving south to Tacoma nor North to Marysville.
One of the interest trends is that only 60% of the population that lives in Seattle works in Seattle. That means that just under half of the people living in Seattle are communiting out of Seattle to work.
Because of the trends, I am now even backing out of projects in Tacoma and Arlington even when we got the land for free and primarily focusing on urban development just in Seattle.
Yes it is true that there is no vacant lots in Seattle but there are LR2 and LR3 zoning everywhere. There is an abundance of low rise multifamily development deals that make great profit and almost no flips that make any sense. Also, we do find properties that would make great flips but they make even more profit as a development projects.
https://www.theurbanist.org/2015/02/04/measuring-success-on-the-urban-villages-strategy-part-1-what-its-all-about/
http://blogs.seattletimes.com/opinionnw/2015/01/29...
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Erica Raby
Rental Property Investor · WA · Member since 2018 · 36 posts · 4 votes
7y
@Rudy Manna
Did you ever get tour foot into the Tacoma market
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Aaron NelsonBusiness Member
Real Estate Agent · Seattle, WA · Member since 2016 · 307 posts · 191 votes
7y
Hey @Erica Raby, saw you resurrected this thread. There is a lot going on in Tacoma and the surrounding areas. Most of the areas have seen double digit appreciation the past couple of years in most areas. Neighborhoods are gentrifying right and left and there are several development projects that are growing the area.
My wife and I own and self-manage a portfolio of rentals in the area that have done very well for us, and I’ve helped several clients find cashflowing investment properties. Let me know if you have questions or want to chat!
[email protected]425-880-2580
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Kenny C.
New to Real Estate · Puyallup WA · Member since 2009 · 85 posts · 39 votes
7y
@Aaron Nelson you're finding cash flowing properties in and around Tacoma?
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Jameson Sullivan
Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
7y
I work as a commercial broker in Washington and am based out of Tacoma and we are seeing a lot of major businesses open units here in Tacoma coming from not only Seattle but out of state as well. This does not speak to the residential market, I understand, however the long term outlook on many neighborhoods in Tacoma is bullish. Personally I plan to continue investing here as I think people will continue to flee 4 and 5 dollar a foot rents in Seattle for a more comfortable 1.75 to 2.50. The construction of a train only adds to the reason for otherwise Seattle residents to move down.
3 Reply
Jeremy Benezra
Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
7y
Anyone have a good map of the Tacoma neighborhoods. I can find basic ones with South End, New Tacoma... But what about more small neighborhood specific, and with some metric for analyzing quality of neighborhoods, price of housing...? Thanks!
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Matthew Cullen
Member since 2018 · 10 posts · 4 votes
7y
Just found this map the other day. https://www.cityoftacoma.org/UserFiles/Servers/Ser...
I would add the the south end is block by block, you have to really know the area. I invest in Tacoma, the only total no go area for me is the eastside north of 38th and east of 7. Long way to go there.
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Jeremy Benezra
Flipper/Rehabber · Sammamish, WA · Member since 2016 · 57 posts · 14 votes
7y
Thats kind of similar to what I've found. I'm looking for something that zooms in deeper than the 8 zones.
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Jameson Sullivan
Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
7y
If you Google Tacoma Zoning Map you will get a GIS that has overlays you can place over and should have neighborhoods. Many of the upcoming neighborhoods, as mentioned above, are street by street. Hilltop, McKinley, Lincoln and South Tacoma are particularly finicky.
2 Reply
Michael Swadberg
Property Manager · Tacoma, WA · Member since 2019 · 2 posts · 0 votes
7y
Half my rental properties (5 of 9) are in the Tacoma area. It's been good here for many years and will continue to be so in my opinion. I say that not having traveled all throughout the rest of the Country yet however. Also, stay out of my neighborhood. Your Competition is not agreed to at this time. Go away. lol
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Aaron NelsonBusiness Member
Real Estate Agent · Seattle, WA · Member since 2016 · 307 posts · 191 votes
7y
Originally posted by @Kenny C.:

@Aaron Nelson you're finding cash flowing properties in and around Tacoma?
Yes, I do.
[email protected]425-880-2580
White Coat Realty534 Reviews
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Kenny C.
New to Real Estate · Puyallup WA · Member since 2009 · 85 posts · 39 votes
7y
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Jameson Sullivan
Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
7y
I want to chime back in here because there's literally no such thing as a "cash flowing property." A cash flowing property for you might not cash flow for someone else. It all has to do with cash on hand, equity, and your debt product. People call me all the time and say "hey, I'm looking for a cash flowing 8-plex"... That's not how it works.
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John V.
Rental Property Investor · Bay Area · Member since 2018 · 2 posts · 0 votes
7y
How does it work? I'm interested in rental properties in Tacoma but saw that prices have increased dramatically. It seems that there are quite a few flippers which is a deterrent. It's a bit difficult to find a qualified realtor.
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Aaron NelsonBusiness Member
Real Estate Agent · Seattle, WA · Member since 2016 · 307 posts · 191 votes
7y
Originally posted by @Jameson Sullivan:

I want to chime back in here because there's literally no such thing as a "cash flowing property." A cash flowing property for you might not cash flow for someone else. It all has to do with cash on hand, equity, and your debt product. People call me all the time and say "hey, I'm looking for a cash flowing 8-plex"... That's not how it works.
Yep, terms, financing and strategy all matter. Mortgage payments scale with the size of the loan, the interest rate, amortization, etc. “Standard” financing terms in the 2-4 unit non-owner occupied space are very different than the commercial (5+ unit) real estate world.
Buying turnkey is different than buying value-add. Expenses and renovation costs can vary. I had one client who got a $6000 bid to replace an electric panel. Then he called the guy I recommended and got a bid for $2500.
At the end of the day, a good, investor friendly real estate agent will generally help buyers think through these nuances and set realistic expectations. They also help set their clients up for success by helping them buy right and build their team that will help them mangage right.
[email protected]425-880-2580
White Coat Realty534 Reviews
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Jameson Sullivan
Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
7y
I work with a lot of new investors and help them the best I can to walk through the steps of how to make a deal work. Happy to take the time on the phone with anyone who has questions. I'm no guru or anything, but I can walk you through fundamentals of a deal and where the upside lies and if there's something I don't know, I have people that do. I'm doing a lot brokerage-wise in small to mid sized multifamily right now (4-20 units) and would be happy to take the time to talk with anyone.
Best,
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