2% anywhere in Western Wa? 1%?

Question

Hey guys,

I'm just curious if any one has any thing that hits 2% in Western Washington? If so- would you mind sharing some details? If its SFH or Multi, how you found it, did you do a major reno..ect....

It seems so out of the realm of plausibility to me here and I'm even north of Seattle in Snohomish County.

Jan Wanot · Answer

@Natalie Kolodij, sounds like you have a good plan with options, and exit strategies.To @Jered Sounders point, you CAN delay moving into an owner occupied property if doing some rehab based on Fannie Mae's Homestyle Renovation Loan. The loan stipulates that you occupy the property within 60 days. However, I'm sure you could extend that for as it took to complete the rehab. Confirm with your lender.As you've heard, there are definitely 1%+ and even 2% rental in Western WA. I'm currently rehabbing a property near UW Tacoma that I plan to rent by the room, which will hit about 1.5%. Found on CL, and put offer in that day. Like @Ruth Bayang mentioned, you gotta move quick :) I'm currently working on building my network, so that I can have more people in my pipeline sending opportunities in which we can all succeed. That takes time, but attending BP meet ups is a great start if you don't do so already.

Tom Burckhard · Answer

@Natalie Kolodij, I agree with the others, 2% are harder to find but are out there if you are ready to pull the trigger when they show up.  I am currently under contract for a 1% duplex in an improving neighborhood and am happy with that; of course I'm still looking for those 2% deals! I'll add that a network and relationships are key, @Ruth Bayang seems to have that; great job Ruth!  As an example, just last week I missed out on a Tacoma fix and flip in a great neighborhood even though I offered a lot more than the actual selling price.  It sold to someone the sellers knew and had a long time relationship.  It happens and on to the next one!

Ruth Bayang · Answer

@Rudy Manna, I'm sure there are others hitting the 2% rule as well who are maybe not on BP or are not active.

There are deals to be had, even in our hot market. As you might have guessed, this was an off-market deal that I snapped up within an hour of its availability.

Natalie Kolodij · Answer

The other element for me is I'm most likely relocating to Charlotte, NC in 2 years and there are way more options for lower end rentals there which hit the 2% rule all day.

I was just thinking it seemed silly to not take advantage of Seattle's highly appreciating market while I live here and can purchase something in this market for 3% down vs 20%. I figure either a flip or a long term hold situation would help in some manner.

Long term would allow some diversification to my portfolio and having something in a more stable market, even if it didn't cash flow as well.

Ruth Bayang · Answer

@Tom Burckhard, thank you. You hit the nail on the head about a network and relationships. The wholesaler who brought me this deal shared it with only a handful of people. I got first dibs because the wholesaler had brought me deals before and I got beat out by others, literally by minutes. He knew I could make a decision quickly and wanted to make sure I stood a chance this time around.

Brent Coombs · Answer

@Natalie Kolodij, are you ready to go, at a moment's notice? @Ruth Bayang has given you the secret: "off-market deal that I snapped up within an hour of its availability"! Snooze = Lose...

Ruth Bayang · Answer

Bought a SFH in Tacoma (one block from PLU) earlier this year for $124,000. Did $10k in renovations.

Rents for $2600Bought a 4 plex in Shelton two weeks ago for $102,000. Doing $40k in rehab.Confident that I can get a minimum of $2400 rent for all 4 units

Natalie Kolodij · Answer

Hi @Jered Souder

I'm about 80% on Charlotte at this point.

A lot of your response is unfortunately putting words into my mouth. I specifically said I was searching for off-market and looking for one of two options, whichever presented a deal that met the numbers. Additionally, I'm obviously aware that the market won't go up 10-20% in two years. And no, a lender won't allow you to purchase a home under occupancy requirements if you intent to move into it at some point. Or at least- not that I've ever heard of.

The options are

A: A live in fix in flip for two years. In which I'm forcing appreciation through the renovation. And again, as with any flip I'd only get into the property if the numbers worked. I would sell when I moved and have more cash available to begin putting into buy and hold properties in NC.

or

B: A MFH which would allow me to accumulate more savings to invest upon moving, as ideally it would allow for my self to live rent-free or close to it. In this situation, I would hang on to the property. I wouldn't get a MFH that didn't cash flow- so it's not only relying on appreciation. But additionally, this market has, on average, appreciated by 3% annually for the last few decades. My point being that somewhere like Charlotte, until recently, hasn't had anywhere near a similar growth rate. So rather than having all my eggs in a high cash flow, less proven market. It allows some diversification which would help mitigate risk. Unless I'm....totally off base on portfolio diversification.

Jered Souder · Answer

@Natalie Kolodij, Being that you are newer to real estate investing and planning on moving to Charlotte, NC ( how certain is that?), does it make sense to just start looking in Charlotte and Skip the WA purchase? Do you want to manage a possible weak cash flowing property from across country in two years (or are you going to get a great deal and sell it...counting on appreciation is not a great deal)? What if you bought a property in 6 months in NC and then rented it for 1.5 years before moving? You might even be able to get a owner occupied loan if you intend to move into it when you move there (but you might want to get someone else's opinion on that). Please don't take offense to this because none is intended, but I just want to help you out..."not taking advantage of Seattle's highly appreciating market" is a red flag. This is the mentality that many, many people had in 2006, 2007 and 2008. Never ever count on appreciation. I don't want to discourage you from investing or going out and finding and doing a deal because you should do a deal. But it has to be the right deal. Do not settle for a mediocre deal because you think the market will go up 10%-20% in two years.

Daniel Speer · Answer

I'm sure you will very successful.

2% anywhere in Western Wa? 1%?

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