Multi-family investing in the Pacific Northwest

Seattle, WA · Member since 2019 · 8 posts · 1 vote

Looking to get in to multi family real estate investing in the Seattle, Tacoma and Olympia Area after BRRRR A duplex or 4-plex.

Any thoughts and advice on the PNW multi-family market?

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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

Multi's are competitive out here- we have a growing SFH portfolio in Seattle and have been trying to buy a few Multi's for about a year now but nothing has penciled out. Even without considering the Seattle City Ordinances, Tacoma and Olympia may be better neighborhoods for you - our SFH's in Seattle have been getting great returns but I haven't found anything comparable for Multi's. Some good high 5% and low 6% CAPs in both those neighborhoods, which after improvements and raised rents might be 7% CAPs - the properties I'm seeing in Seattle tend to be .5% lower CAPs than that and often have less potential to add value.

I'd check out Renton too - I'm pretty bullish there.

Cheers and good luck! I don't work much down in Olympia, but we're actively investing in Seattle, Renton, and a bit of Tacoma so shoot me a message if you'd like to grab a coffee and chat in more detail.

[email protected]408-439-7873

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Jared Boundy
Real Estate Broker · Seattle, WA · Member since 2017 · 139 posts · 82 votes
6y
If you find a good deal, grab it! Good multifamily properties get snatched up pretty quickly around here.
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James Terrell
OP
Seattle, WA · Member since 2019 · 8 posts · 1 vote
6y
@Jared Boundy copy. Thanks man
0 Reply
John Barrett
Rental Property Investor · Everett, WA · Member since 2015 · 458 posts · 386 votes
6y
@James Terrell The best thing you can do is spend sometime figuring out your strategy and learning the market.
By getting really clear on what your plan is with the property you want to BRRRR (light rehab or heavy value add, etc.) you will be able to move quickly. Additionally, make sure you have your financing line up as being able to close quickly can help you get a property even if you are not the highest offer. There are a lot of opportunities that come up in the market but only if you are prepared and ready to execute on the one that meets your criteria.
Best of luck,
John
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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@James Terrell the market around here is really tough, and it seems like buyers are diving in with not much regard for the numbers; at least to me it seems that way. Tacoma is not San Francisco! All the best!
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Brandon VukelichBusiness Member
Real Estate Broker · Tacoma, WA: 🏢 27 LTRs 🏡 3 STRs · Member since 2018 · 549 posts · 458 votes
6y
Have you been staying on top of the news on Seattle regarding landlord-tenant laws? I refuse to invest there and advise others to look elsewhere. Yes, it is a solid market for rents and appreciation but not worth the risk in my opinion. There are definitely better opportunities in the greater Tacoma area but the market is hot. Smaller 2-4 unit deals move quick, no time be a tire-kicker. CAP rates are around 5.5%, higher in certain neighborhoods. Depending on the specific area, you can generally pickup a duplex for mid $300's, a triplex for low to mid $400's but most decent fourplexes are going to run $550k-$650k. Sorry, don't know much about Olympia. Feel free to connect or reach out with a DM anytime. Best wishes on your goals!
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Keli Coleman
Rental Property Investor · Olympia, WA · Member since 2018 · 29 posts · 20 votes
6y
Originally posted by @Brandon Vukelich:
Have you been staying on top of the news on Seattle regarding landlord-tenant laws? I refuse to invest there and advise others to look elsewhere. Yes, it is a solid market for rents and appreciation but not worth the risk in my opinion. There are definitely better opportunities in the greater Tacoma area but the market is hot. Smaller 2-4 unit deals move quick, no time be a tire-kicker. CAP rates are around 5.5%, higher in certain neighborhoods. Depending on the specific area, you can generally pickup a duplex for mid $300's, a triplex for low to mid $400's but most decent fourplexes are going to run $550k-$650k. Sorry, don't know much about Olympia. Feel free to connect or reach out with a DM anytime. Best wishes on your goals!

I agree. I cannot afford seattle none the less, but i would never buy in that city due to the recent changes. Pierce county and south!

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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
6y
Multi's are competitive out here- we have a growing SFH portfolio in Seattle and have been trying to buy a few Multi's for about a year now but nothing has penciled out. Even without considering the Seattle City Ordinances, Tacoma and Olympia may be better neighborhoods for you - our SFH's in Seattle have been getting great returns but I haven't found anything comparable for Multi's. Some good high 5% and low 6% CAPs in both those neighborhoods, which after improvements and raised rents might be 7% CAPs - the properties I'm seeing in Seattle tend to be .5% lower CAPs than that and often have less potential to add value.
I'd check out Renton too - I'm pretty bullish there.
Cheers and good luck! I don't work much down in Olympia, but we're actively investing in Seattle, Renton, and a bit of Tacoma so shoot me a message if you'd like to grab a coffee and chat in more detail.
[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
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Aaron NelsonBusiness Member
Real Estate Agent · Seattle, WA · Member since 2016 · 307 posts · 191 votes
6y
@James Terrell - My wife and I have BRRRR'd properties and own Multifamily rentals in Pierce County. South King and Pierce are undergoing a lot of gentrification as people are priced out of Seattle and move South for affordability. These areas have experienced significant price and rent growth over the past handful of years and there are several drivers that hint at continued growth.
Despite what others may claim, Cap Rates are mostly irrelevant when it comes to small multifamily properties (2-4 units) as these assets are valued and priced in a different manner than 5+ units. Keep this in mind when you’re analyzing potential acquisitions and be sure to work with someone who has a lot of experience in the area.

[email protected]425-880-2580
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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
6y
@Aaron Nelson - when you say "CAP rates are mostly irrelevant when it comes to small multi family properties" what exactly do you mean? I agree that comparing 4- units to 5+ units is apples to oranges, but sounds like you were getting at something deeper here.

Thanks!
[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
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