Newbie Investor In Seattle Area!

New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes

Hello BP Community,

My name is Mark and I am a recent graduate from Washington State University. I currently work a full-time job that pays well and often allows me days off during the week where I have had time to learn more about Real Estate (often Tues, Thurs, Fri and always weekends). With this time I want to begin investing my time and money into building a real estate portfolio for my future.

I am excited about getting started and will be reading and listening to podcasts as much as possible in the mean time.

Looking forward to hearing from you!

Mark Watkins (Greater Seattle Area)

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Michael HaasBusiness Member

Real Estate Agent · Redmond, 🌧️ 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 · 724 posts · 3k+ votes

@Mark Watkins Townhomes and SFH's look pretty similar - there's just less long-term upside on a townhome as you have less land, and doing a lot split or addition typically isn't an option. With SFH's and all the up-zoning happening in Seattle you may be able to build additional units on your lot as prices continue to rise and the ROI for those kind of activities increases.

Condo's, as lower priced assets, tend to be more volatile - they'll get hit harder during recessions and often rise higher during booms. I'd steer clear though, I run the numbers on Condo's for clients all the time and am almost never pleased with their performance as rentals.

As an owner-occupant, a single family house hack / basement ADU would get you a better CAP rate than a Multifamily in our market so that's another option.

You mentioned not knowing if you have enough Cash for a down payment - have you looked into different loan products? For an owner occupied multifamily going 3.5% down with an FHA loan is a no brainer. You're looking at $400-$850 k for that multifamily in the south end, or $700-$1,200k for one in the north end, so you can do that math by multiplying that by 3.5% plus some extra for closing costs.

PM me if you have more questions! We invest in the south end (5 properties) because it just makes more financial sense, but there are definitely ways to make it happen in the north end as well if work and friends have you anchored up there. Cheers!

[email protected]408-439-7873

HouseHack Seattle | Michael Haas & Team572 Reviews

Website View Page

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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
What type of investing do you want to start with?
0 Reply
Mark Watkins
OP
New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes
6y
My initial plan was to purchase a Multi family home, or single resident home near green lake area and rent that out to the buddies I currently live with from college until we move out. Although that wouldn't immediately cash flow, I would be able to use the money i'm putting towards rent into a house that I could turn into an investment property once we move out.
If I can't do that, I would like to find a multi family, 2-4 units, near seattle area that I could fix up and get some cash flow going with.

How did you get started? And what made your venture successful? Was it just getting started that made you learn along the way?
I appreciate the response!
0 Reply
Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
That is a decent plan. I got started with SFR rentals, you certainly learn a lot along the way and adjust your plan from there, doing the math up front correctly cannot be understated. Also people will calculate the same number differently, just be aware of that and don't try to reach some magical unattainable return that someone was only able to "get" because they didn't factor in management, or vacancies, or capex.
1 Reply
Mark Watkins
OP
New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes
6y
What have you found is your best method of researching deals? Currently I am using sites like Zillow and Realtor.com. I have looked very little into auctioned foreclosed houses but those seem as though they could become much better deals if you are able to lock in a price that accounts for any neccesary repairs or rehabs.
1 Reply
Jess Haas
Realtor · Seattle, WA · Member since 2019 · 117 posts · 165 votes
6y
Finding a multifamily near greenlake area that cash flows is near impossible(I'd even call it a unicorn). Scout Zillow and redfin to get a better idea of whats available and what areas you can afford. If you want to rent to buddies Id go with a single family and house hack. You will have a lot more options for SFH in the north Seattle area. Good luck! DM me if you have questions about Seattle and Seattle neighborhoods.
5 Reply
Mark Watkins
OP
New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes
6y
I think unfortunately you are right, it is likely a unicorn. If that is the case, like you said looking more north. Do you think a 3 BR townhome that I could rent to friends would be a bad investment? I would like to buy a house, but I don't know if I have enough for the downpayment quite yet. Townhomes operate a little differently in the market than SFHs correct? Should I expect less appreciation from a town home?
0 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
6y
Welcome to BiggerPockets Mark and good luck investing!
Podcast Guest on Show #121
0 Reply
Mark Watkins
OP
New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes
6y
Thank you Andrew!
0 Reply
Michael HaasBusiness Member
Real Estate Agent · Redmond, 🌧️ 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 · 724 posts · 3k+ votes
6y
@Mark Watkins Townhomes and SFH's look pretty similar - there's just less long-term upside on a townhome as you have less land, and doing a lot split or addition typically isn't an option. With SFH's and all the up-zoning happening in Seattle you may be able to build additional units on your lot as prices continue to rise and the ROI for those kind of activities increases.
Condo's, as lower priced assets, tend to be more volatile - they'll get hit harder during recessions and often rise higher during booms. I'd steer clear though, I run the numbers on Condo's for clients all the time and am almost never pleased with their performance as rentals.
As an owner-occupant, a single family house hack / basement ADU would get you a better CAP rate than a Multifamily in our market so that's another option.
You mentioned not knowing if you have enough Cash for a down payment - have you looked into different loan products? For an owner occupied multifamily going 3.5% down with an FHA loan is a no brainer. You're looking at $400-$850 k for that multifamily in the south end, or $700-$1,200k for one in the north end, so you can do that math by multiplying that by 3.5% plus some extra for closing costs.
PM me if you have more questions! We invest in the south end (5 properties) because it just makes more financial sense, but there are definitely ways to make it happen in the north end as well if work and friends have you anchored up there. Cheers!
[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
Website View Page
6 Reply
Mark Watkins
OP
New to Real Estate · Seattle, WA · Member since 2019 · 6 posts · 2 votes
6y
Thank you so much for the information Micheal. It makes sense that townhomes likely won't have the extra upside that SFH's will with less land to build and develop on in the future. I would love to buy a house down in the south end and house hack but ideally I would get one in the north end so I can rent out to my friends and be closer to work.
I've looked into loans a little bit, but mostly just assumed I would at least have to put 10% down. If I can find a bank to give me an FHA loan with 3.5% down that would be ideal.
I truly appreciate the information @Micheal Haus! It is good to learn as much as I can about our local market. Hopefully I can close in on a house hack soon.
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