INVEST IN SEATTLE AREA WITH 30K OR GO OOS

4 Replies

My grandmother had just passed and left me 30k. I've studied REI since I was a senior in HS and know the basics of REI. for the moment I am unemployed because I had to take care of her until her passing and now I am debating on how I should invest. the Seattle area is very expensive and 30k won't go far with cash so I would have to get a loan and go back to being a pool boy to house hack or BRRRR in my local area but I really hate working for other people. my 2nd option is to look out of state and find something i can purchase with 30k cash and the get hard money for rehabbing. im really stuck and don't want to throw away my Grandmothers legacy so I would really appreciate any advice on what you would do in my situation, thank you all!

@Jereck Galloway imo you are focusing on the wrong thing right now. Your focus should be on increasing your income which will make REI much much easier as it's very difficult to get lending otherwise. Bank the $30k for now. If you really want to invest in RE as your full time source of income one day, consider working in the industry in an area of interest that will help you knock out 2 birds with 1 stone: you can increase your income AND get valuable experience that will payoff in the future. Options: construction, electrician, plumbing, painting, REA, property management, etc. To answer your question specifically, local is generally safer. Research the House Hacking strategy, it's a great place to begin investing. Consider reading "Set for Life" by @Scott Trench if you haven't already.  

@Jereck Galloway woah hold up, there's almost never a reason to put 20% down on a house-hack. If you want to build a rental portfolio you need to defend your cash, and that means taking advantage of the lower down-payment (3% & 5%) loans available to owner occupants and house-hackers. 

If you're going to BRR or invest our of state you'll want to increase your income first, but if you're house-hacking you can start your REI journey much earlier. With the WSHFC down payment assistance program you can get into a house for pretty much just the closing costs- could be just 6k up front cash to close on a $500k house. If that house has a unfinished basement you can finish and rent out, or even just extra rent-able bedrooms, your mortgage payment will likely be significantly less than you currently pay for rent, + you reap all the tax benefits and forced savings effects of home-ownership.

I've had success with cashflow rentals aroundSeattle by getting off the beaten path- there are established investors bidding up the price (and therefore compressing the cap rate) on many small multi-families, but those same investors are not going after large 6-9 bedrooms SFHs that you can rent by the room to young professionals and college students. Most are also are not establishing STRs, especially now that Seattle regulations limit most families to just 1 Airbnb/STR outside their primary residence.

Send me a message if you want to talk more about House Hacking. Its a great and low cost way to get started, and my wife and I wouldn't have been able to quite or job and reach financial independence so quickly any other way. Whatever you do, PLEASE don't put 20% down on a house-hack in the Seattle market, your cash-on-cash will not be what it could be. 

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