Marysville, WA · Member since 2018 · 4 posts · 1 vote
Hi, I’m new to BiggerPockets. I’ve been listening to the podcast and I’m really interested in investing in Multi-family properties. I haven’t done any REI before, but I’m about to sell my home this summer (purchased in 2012) and should have a large chunk of cash to invest with. It’s hard to find a good Four-plex for less than $1 mil. I feel like it should be cheaper to buy a small piece of property and do new construction. Does anybody know of trustworthy contractor in the Snohomish County area? Or possibly Island County? My family and I are considering moving to Whidbey Island. The commute wouldn’t be so bad from my work(Boeing). Anything helps. Thanks.
Rental Property Investor · Everett, WA · Member since 2015 · 458 posts · 386 votes
8y
Hi Donavan,
The only disadvantages to the 4plex currently is availability and pricing. There are less of them on the market at the moment and as such the prices are up. In general, more units is better. Staying under 4 units allows you the best access to long term financing at attractive rates. This is especially true if this is a house hacking situation.
The challenges generally fall into two main categories: financing & managing tenants. From your post above it seems like you will have funds available from the sale of a property so down payment and financing shouldn't be an issue. As for managing tenants, that will really depend on your personality, willingness to learn new things and comfort level holding people to the terms of the lease.
At the end of the day, this is all very doable. If you are going to live in the property, I would just suggest that you follow the terms of your leases exactly and rather than tell tenants you are the owner, just introduce yourself as the property manager. Both things will make managing your property simpler.
Rental Property Investor · Los Angeles, CA · Member since 2016 · 130 posts · 69 votes
8y
Hey Donavan,
Welcome to BP! Depending on where you look, you should be able to find a 4-plex for less than 1 million. If this is your first time investing, you may want to start with a smaller deal. However, don't let me sway your goals or confidence!
Are you looking for 4-plexes in Snohomish County? Are you looking to HouseHack the 4-plex?
Marysville, WA · Member since 2018 · 4 posts · 1 vote
8y
Yeah Snohomish County mostly, possibly Island/Skagit/maybe northern King County. A House Hack would be ideal to begin with but I’m looking to end up with good cash flow so I would hope to have several Multi-Families. I figured if I’m going to invest in a duplex/triplex, why not a Fourplex? Go as big as I can while staying out of the commercial loans.
Realtor · Lake Tapps, WA · Member since 2017 · 19 posts · 3 votes
8y
Hey Donavan, welcome to the BP family!
In my opinion, the Multi-Family deals on market in Snohomish County are not ideal right now to invest in especially for a first timer. Prices are way too high and rent is not high enough to cash flow unless you have a very significant down payment, but still your ROI would not be very good. I am an investor and licensed realtor in WA state as well. I represent many investors in the Pierce/King county area and from my experience, If you move your search more south into the pierce county area you will be able to get a MUCH better deal. Feel free to message me personally if you want to talk.
Rental Property Investor · Everett, WA · Member since 2015 · 458 posts · 386 votes
8y
Hi Donavan,
Multi-family properties are an extremely hot segment of the market at the moment. With the really strong demand the best properties are getting purchased very quickly and often for above the asking price. That said, there are options for 4plex’s in Snohomish County that are much less than $1M. In Everett the last few I saw sold for between $550 - $680k. As previous responses stated the the cash flow will depend on your down payment the terms of your financing.
If I were in your position, I would get pre-approved with your preferred lender and start networking with agents. By letting people know your time frame, budget and that you have approved financing you should have no problem getting offers submitted when good options pop up on the market. Additionally, attending some of the local meet ups can help you connect with other local investors.
There are no guarantees unfortunately. However taking a few of these actions can help your chances of being ready when an opportunity arises.
John
Rental Property Investor · Mount Vernon, WA · Member since 2017 · 50 posts · 14 votes
8y
Hi, my dad owns Xtra-Therm Insulation and insulates houses for Adair Homes, Reality Homes, Encinas Construction and a few others. They are such a pleasure to work with. If you choose one of them let them know we referred you.
Marysville, WA · Member since 2018 · 4 posts · 1 vote
8y
Thank you. I appreciate all of the helpful information. I am curious what you guys thought about 4 units vs 2 or 3? Is there an advantage to less units? It would seem to me that cash flow is better at 4, but what are the disadvantages to a fourplex?
Rental Property Investor · Everett, WA · Member since 2015 · 458 posts · 386 votes
8y
Hi Donavan,
The only disadvantages to the 4plex currently is availability and pricing. There are less of them on the market at the moment and as such the prices are up. In general, more units is better. Staying under 4 units allows you the best access to long term financing at attractive rates. This is especially true if this is a house hacking situation.
The challenges generally fall into two main categories: financing & managing tenants. From your post above it seems like you will have funds available from the sale of a property so down payment and financing shouldn't be an issue. As for managing tenants, that will really depend on your personality, willingness to learn new things and comfort level holding people to the terms of the lease.
At the end of the day, this is all very doable. If you are going to live in the property, I would just suggest that you follow the terms of your leases exactly and rather than tell tenants you are the owner, just introduce yourself as the property manager. Both things will make managing your property simpler.