New members from Washington

18 Replies

Hey everyone! New members introducing ourselves, as recommended. I say "members" because it's my girlfriend Kellie, and I. Working on this project. Were currently living in Washington. 

We're looking to invest in the Marysville/Lake Stevens area. Our short term goal is to purchase a cash flowing property by January. 

Our long term goal is to be able to supplement our income using rental properties. We want either a duplex or a SFR.

I'm kinda curious on how the market is? Are prices high? Is it a good time to find a buy and hold opportunity? If so what factors should we be looking at? Curious to know how to research the success of others who are in our market also. 

Anyways, these are all questions I'm sure have been answered in the forums. So in a nutshell we're Tony & Kellie :)  

Welcome to BP.  My office is actually in Lake Stevens, so familiar with the area, and high prices!

Good to see that you have some goals that you can track against, be sure to review your goals constantly.

looks forward to seeing you at a meet up.

Hi James, I live here in Marysville also really close to Lake Stevens, I too am looking for house to flip and buy wholesale, but Troy is correct you have to be careful where in Marysville you buy because anything in the tribes are is lease land and I have a friend the  tribe did not extend the lease an basically lost the house. There is house that are in that area but is deeded land and those would be ok. 

Thats the first iv'e heard about land leases. Does that mean the land is leased to you, and the indian tribes have the authority to deny you permission to own that land? Either way I was thinking of steering clear of the reservation area. 

Your right about Lake Stevens being high priced. I can't seem to find anything under 200k and thats even pushing it. With rents being in the $1800-2000/Mo area, I really want to stay below 200k. I was curious about foreclosures and everything that goes in to purchasing one. It seems to be the only option if your trying to create cash flow. 

Thank you for all the welcomes! 

Originally posted by @James Haffner :

Hey everyone! New members introducing ourselves, as recommended. I say "members" because it's my girlfriend Kellie, and I. Working on this project. Were currently living in Washington. 

We're looking to invest in the Marysville/Lake Stevens area. Our short term goal is to purchase a cash flowing property by January. 

Our long term goal is to be able to supplement our income using rental properties. We want either a duplex or a SFR.

I'm kinda curious on how the market is? Are prices high? Is it a good time to find a buy and hold opportunity? If so what factors should we be looking at? Curious to know how to research the success of others who are in our market also. 

Anyways, these are all questions I'm sure have been answered in the forums. So in a nutshell we're Tony & Kellie :)  

 Welcome to BP. 

This is a great place to get information and ask questions from people doing it in your backyard.

Originally posted by @James Haffner :

Thats the first iv'e heard about land leases. Does that mean the land is leased to you, and the indian tribes have the authority to deny you permission to own that land? Either way I was thinking of steering clear of the reservation area. 

Your right about Lake Stevens being high priced. I can't seem to find anything under 200k and thats even pushing it. With rents being in the $1800-2000/Mo area, I really want to stay below 200k. I was curious about foreclosures and everything that goes in to purchasing one. It seems to be the only option if your trying to create cash flow. 

Thank you for all the welcomes! 

 I'm in Snohomish and fairly familiar with the areas....you can't find any thing in Monroe under$ 200k let alone Lake Stevens. 

Any thing in this area that will rent for $1,800-$2,000 is going to be a $350,000 + House. 

If you find something under 200k it will be under 1000 sq feet and definitly need work. It would be closer to a rental value of $1,000 

I'm just curious what made you pick an area you're not super familiar with as opposed to your back yard? Military base towns provides fairly good rental potential. 

Welcome to Bigger Pockets @James Haffner and Kellie! Back in the late 60's, I did weekend Naval Air Reserve drills at NAS Whidbey. 

You're not going to find an $1,800 - $2,000 rental without spending $350k or more. Otherwise, with such a high return on investment, the locals would have snapped them up long ago. $1,400 for a very nice 3 bdrm apt or fairly nice house is probably closer to the ballpark, unless you can create some sort of edge.

I get my local rental values from Apartments.com and do my MLS searching on Redfin.com. Redfin is free and has some great search functions and, if you mark something as a Favorite, they'll keep you posted on status changes and selling prices. The links to comparable properties lower on the page can be interesting, too.

I only know of two Snohomish county regions with sub-$200k homes, and those aren't exactly common. But, they can be found, sometimes even in decent shape. Just be sure to get to know the market values really well by looking at a lot of listings.

One area is between Granite Falls and south to nearly Monroe, along the eastern edge of the population, before you get into the mountain foothills. The problem here is that it's a very long commute into Seattle and about a half-hour just to get to Everett. So, rental values will generally reflect that by being lower. You also need to watch out for river flooding here. It doesn't happen often, but it can. If there's a nearby river and all the main house stuff is 8' up in the air, with just a garage and possibly unfinished space at ground level, that's a dead giveaway. You'll sometimes see high-water marks on the wood framing.

The other place for sub-$200k is inside the city of Everett. A lot of it is a pretty tough crime area, though. Plus a lot of the houses are a century old, so you may have lead paint  and old wiring/plumbing issues that may not have been upgraded. Also, the city is about to do some major sewer upgrading and combined sewer/water prices are expected to run $100/month. So, if you do rentals, make sure that the tenant pays all the utilities. 

If I was a little younger and didn't have something better going, I'd be investing in fixer SFR's with lots of bedrooms in north Everett, within walking and biking distance of the fast-growing Everett college on the north end of Broadway. This is where you'll find an edge where a cheap house can cashflow like a more expensive property.

I'd be setting up co-housing situations for student housing. Basically, this means having a master tenant who then subleases bedrooms to students, typically in the $400 - $500/month each range. Many students aren't nearly as picky about where they live as are families, as long as it's convenient to school, possibly not even owning a car. And, they don't seem to mind sharing common living spaces with others - it may not be that much different than the family situation that they just left.

The master tenant/manager needs to have a situation that will make it worth their while, perhaps net free rent, but they'll have plenty of incentive to keep the rent paid and the property cared for. And, conveniently, you can do this with multiple properties and they'll all be within about a mile of each other. 

Unless you have a ton of cash to play with, or want to develop multifamily, that's the lowest-hanging fruit that I know of in Snohomish county. Hope that helps.

Fly Navy!

Chris

@Chris Newman

Good input. I wouldn't buy in Granite Falls or most areas of Everett. 

I'd buy in Everett near silver lake- it's basically Lynnwood. 

But North Everett and Granite Falls are are both too sketchy for me. Granite Falls has a lot of issues with Meth out there. 

Rent's will be proportionately lower in either area too.  I think it's also a little harder to find quality renters in Snohomish country- lower income overall. 

OH YA flooding is an excellent point- even if your house isn't likely to flood if you're in a classified flood plane your insurance is way more. 

Back in the 60's I'm sure the Navy was a different world! I would love to go back in time and see what that was like :) 

I haven't really decided on a location yet. My Mom said she would rent our house to her if I buy one in the Marysville or Lake Stevens area. That would keep things really simple since 1/2 the year I'm not around. 

As for Oak Harbor where I'm currently at, I've only looked a little, but the rents here are much lower then everywhere else and prices are high. Rents are ranging between $1000-1100 for a 3 bedroom house, and apartments are around $800-900, but the HOA would eat anything that cash flowed on a condo. There is talks of a growing military presence which could increase the rents in the area, and the cost of homes.

You mentioned multi-family homes. I looked for those also but had trouble finding many duplexes for sale. But It seems like a duplex or triplex would be the ideal investment. 

 I appreciate your responses, you guys mentioned a lot of things I didn't even think of. All though prices are high and it seems like theres nothing that will cash flow. I think with a little creative thinking I can figure something out. 

@Natalie Kolodij

I wouldn't live in either area. We were trying to identify sub-$200k neighborhoods where it might be possible to cashflow a little. You get what you pay for, at least sometimes. 

I hear a lot more about gang activity and serious crime in south Everett down to Alderwood Mall, than north by the college. Student co-housing there is the only extra edge for cost/cashflow that I know of. I think that, as WSU continues to expand at Everett CC, the neighborhood rents will tend to go up and that will flush more of the low-rent culls further south. But, that's not what I'm doing with SnoCo REI.

Yea iv'e put some thought in to the areas around Burlington also, my main concern is the job market out there seems slim. A lot of people love Anacortes though, its nice, a lot of military, and peaceful.

I was looking at Lake Stevens again. After some research I found that they have high rents and are going to attract a better tenant. Knowing there is a bit of a cushion with higher rents makes me feel more confident we can find something in the 220k and below range, and be able to rent it out with cash flow.

I think finding something that offers something unique that other landlords don't offer will be my angle. It would be a high cost investment and a huge down payment, but there's a lot of potential there that maybe other people aren't looking to far in to because they feel like there never going to find a home in the price range they need. After a brief look I was able to find homes around 220k. 

I guess if worst comes to worst I wouldn't mind living in Lake Stevens also! 

The biggest concern I have with renting out to college students is having to deal with college kids not being able to pay rent, then dealing with an eviction.

@James Haffner Good for you in finding 220k properties in Lake Stevens. They should certainly cashflow nicely.

You wrote: "The biggest concern I have with renting out to college students is having to deal with college kids not being able to pay rent, then dealing with an eviction." 

I'm certainly not trying to talk you into this strategy - you've got your thing going and need to follow through with it. There are many pathways up the mountain.

However, for the sake of other readers, having an onsite house manager/master tenant in a student co-housing situation will shift all of the potential eviction hassles onto them. I would hate this job, too. But, no matter what their sub-tenants do, the master tenant is still responsible to pay the full rent. If only because the interior fittings don't need to be as nice, this is going to be higher than a straight lease to a family, and that extra rent goes straight into the profit column. 

This real estate management experience at a young age is probably more valuable than what the school teaches. :-) They'll be just one short step away from buying their first investment property.

Welcome to BiggerPockets!  My husband and I are also a couple investing, and it works out well to balance our strengths and weaknesses.

I agree with others to maybe look closer at Oak Harbor.  A weak job market may be  a reason to not concentrate and get 10 untis in that area, but I don;t think it rules out starting there.  We have five properties in a similar demographic area and they are cash flowing great, which takes the sting out of the non-existent appreciation.

There are a lot of reasons to not concentrate on the college student market, but I wouldn't put evictions and non-payments high on the list.  The parents co-sign, and both the parents and students have credit they want to protect, so thy are unlikley to let things go to eviction.  There was a recent BP podcast about renting to students you may want to listen to.

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