New to investing (Seattle area) looking for tips to get started

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New to investing (Seattle area) looking for tips to get started

Elmer Bonilla
Member since 2021 · 26 posts · 19 votes

Hey everyone, I’m new to BP this is my first post and really enjoying the awesome info on the forums. I’m in my mid 30s and ready to jump into real estate investing. We moved to the Seattle area almost 4 years ago and purchased our primary residence in 2018 in Snohomish county. I work a full time W2. My wife and I have been discussing ideas on how to start on our investing journey and I was hoping some of you could share some insight on the best approach for a couple with 2 young kids.

We talked about the idea of partnering up on a number of flips in order to learn the ropes and generate some cash to later invest into BRRR properties. I believe this is a common practice (?). We would most likely do this through a HELOC. Thoughts on this?

Another idea is to sell our primary to buy a duplex to house hack and invest some of the money on flips or buy additional rental properties possibly out of state (maybe Columbus, OH) Preferably we would keep our primary and rent it out but would like to tap into our equity to purchase the duplex or other type of small multi-unit.

We're also thinking about purchasing BRRR properties out of state.

My main questions are:

  1. Is tapping into the equity of my primary residence my best option to start partnering up on flips and getting my feet wet?
  • Considering BRRR in Tacoma, is this still a good market. I've seen cheaper small multi-units in that area. How about Everette and other north cities like Marysville, Lake Stevens, Tulalip
  • Is out of state investing a good idea when getting started?

Thank you for reading. I would be happy to connect with members and agents.

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Kyle Wells
Realtor · Lake Stevens, WA · Member since 2018 · 122 posts · 91 votes
5y

Hi Elmer and welcome to BP! Personally, I would highly recommend selling your primary (tax free!) and househacking a duplex. You are killing two birds with one stone. 1. You significantly reduce your monthly living expenses, and 2. You get your feet wet on your first investment property that you will eventually turn into 2 doors. 

I also own three properties out of state (purchased 1 while living in Kansas City for 2 years) and it is more difficult to manage not being there. Even with a PM, they don't manage it how you would. I now focus on investing locally and focus on the North Snohomish County area as the demand is high and it's a booming area. I find it beneficial to buy in an area you know and that's convenient to you. Good luck!

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  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Elmer Bonilla:

    Hey everyone, I’m new to BP this is my first post and really enjoying the awesome info on the forums. I’m in my mid 30s and ready to jump into real estate investing. We moved to the Seattle area almost 4 years ago and purchased our primary residence in 2018 in Snohomish county. I work a full time W2. My wife and I have been discussing ideas on how to start on our investing journey and I was hoping some of you could share some insight on the best approach for a couple with 2 young kids.

    We talked about the idea of partnering up on a number of flips in order to learn the ropes and generate some cash to later invest into BRRR properties. I believe this is a common practice (?). We would most likely do this through a HELOC. Thoughts on this?

    Another idea is to sell our primary to buy a duplex to house hack and invest some of the money on flips or buy additional rental properties possibly out of state (maybe Columbus, OH) Preferably we would keep our primary and rent it out but would like to tap into our equity to purchase the duplex or other type of small multi-unit.

    We're also thinking about purchasing BRRR properties out of state.

    My main questions are:

    1. Is tapping into the equity of my primary residence my best option to start partnering up on flips and getting my feet wet?
    • Considering BRRR in Tacoma, is this still a good market. I've seen cheaper small multi-units in that area. How about Everette and other north cities like Marysville, Lake Stevens, Tulalip
    • Is out of state investing a good idea when getting started?

    Thank you for reading. I would be happy to connect with members and agents.

     Hi Elmer, that's great to hear you're ready to get in the investing game. I assume your market is pretty expensive? If you have the right team, OOS investing can be made easy. 

    1Reply
  • Kyle Wells
    Realtor · Lake Stevens, WA · Member since 2018 · 122 posts · 91 votes
    5y

    Hi Elmer and welcome to BP! Personally, I would highly recommend selling your primary (tax free!) and househacking a duplex. You are killing two birds with one stone. 1. You significantly reduce your monthly living expenses, and 2. You get your feet wet on your first investment property that you will eventually turn into 2 doors. 

    I also own three properties out of state (purchased 1 while living in Kansas City for 2 years) and it is more difficult to manage not being there. Even with a PM, they don't manage it how you would. I now focus on investing locally and focus on the North Snohomish County area as the demand is high and it's a booming area. I find it beneficial to buy in an area you know and that's convenient to you. Good luck!

    2Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y

    @Elmer Bonilla

    Welcome to BP community! It is a great place to meet new friends and learn about various aspects of real estate and more.

    Check out BP Podcasts: https://www.biggerpockets.com/podcast

    Wishing you the best!

    0Reply
  • Brandon Myking
    Member since 2021 · 9 posts · 18 votes
    5y

    @Elmer Bonilla

    We find ourselves in a similar, though not identical situation. We have been debating whether to sell our current residence or pull equity (HELOC, cash-out refi) in order to further our investment portfolio. What has been helpful for us is to run the numbers (use BP rental investment tool). Then decide, would I buy my current house at it's market value(less selling costs) for an investment? If I were to pull equity from my home, would the rental income generated from that property provide positive cash flow to cover the new amount financed? If it's close, do I expect my current residence to appreciate much faster than other investment opportunities? Cash flow is what will keep you in the game in order to build wealth through appreciation.

    I live in Tacoma so if you would like to discuss anything further feel free to send me a message. Good luck with your journey. 

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Elmer Bonilla:

    Hey everyone, I’m new to BP this is my first post and really enjoying the awesome info on the forums. I’m in my mid 30s and ready to jump into real estate investing. We moved to the Seattle area almost 4 years ago and purchased our primary residence in 2018 in Snohomish county. I work a full time W2. My wife and I have been discussing ideas on how to start on our investing journey and I was hoping some of you could share some insight on the best approach for a couple with 2 young kids.

    We talked about the idea of partnering up on a number of flips in order to learn the ropes and generate some cash to later invest into BRRR properties. I believe this is a common practice (?). We would most likely do this through a HELOC. Thoughts on this?

    Another idea is to sell our primary to buy a duplex to house hack and invest some of the money on flips or buy additional rental properties possibly out of state (maybe Columbus, OH) Preferably we would keep our primary and rent it out but would like to tap into our equity to purchase the duplex or other type of small multi-unit.

    We're also thinking about purchasing BRRR properties out of state.

    My main questions are:

    1. Is tapping into the equity of my primary residence my best option to start partnering up on flips and getting my feet wet?
    • Considering BRRR in Tacoma, is this still a good market. I've seen cheaper small multi-units in that area. How about Everette and other north cities like Marysville, Lake Stevens, Tulalip
    • Is out of state investing a good idea when getting started?

    Thank you for reading. I would be happy to connect with members and agents.

     Out of state investing can be rewarding for people in expensive markets like Seattle. You should check out Columbus, Ohio and read this article on OOS investing 

    https://www.biggerpockets.com/blog/core-four-real-estate-team

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    0Reply
  • Chace Fraser
    Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
    5y

    Sounds like you have some good ideas! I'd recommend speaking with an investor friendly agent who's in your same shoes about what options you might have. @MichaelHaas (for some reason I can't tag him) would be a good one to contact!

    0Reply
  • Paul Lennick
    Member since 2019 · 22 posts · 13 votes
    5y

    Hello,


    I sent you a message, I was in your same boat about a year ago.

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    5y

    I started with SFH in 2009-2015 which I was working my engineering gig. My first rentals where in Seattle but then I learned about cashflow. I think a lot of people will debate investing OOS or for appreciation but cashflow in secondary markets worked for me and let me know if you have any questions on that.

    0Reply
  • Sherief Elbassuoni
    Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
    5y

    @Elmer Bonilla, tapping into the equity you have (HELOC) is a great way to purchase your next deal.

    If I am in your place, I will keep the options open and will look at both the south (Tacoma, Seatac,...) and the north (Everett, Marysville,...)

    I am not a big fan for OOS since we can still find good deals in our market and the appreciation is great. 

    1Reply
  • Elmer Bonilla
    OP
    Member since 2021 · 26 posts · 19 votes
    5y

    @Zeke Liston I responded to your message

    @Kyle Wells great point about killing two birds with one stone! I like that. Also really interested in north snohomish market will respond through message. 

    @Brandon Myking what a great tip. Rentals in my area are slightly under or just about as much as my mortgage so I don't think i have much opportunity for cash flow. 

    @Chace Fraser thank you for the contact I will reach out to him! 

    @Lane Kawaoka thank you for sharing I'm learning quick that cash flow is the key to long term success. 

    @Dmtryi thanks I have been consuming lots of podcast lately. 

    @Remington Lyman thanks for sharing that article by David. He has so much good stuff that man. I will be ordering my copy of "Long distance real estate investing". 

    @Paul Lennick I will respond to your message 

    @Sherief Elbassuoni got it, instead of south vs north I will focus on wherever deals can be found. Thank you 

    2Reply
  • Aaron NelsonBusiness Member
    Real Estate Agent · Seattle, WA · Member since 2016 · 307 posts · 191 votes
    5y

    Hey @Elmer Bonilla - Welcome to BP and the world of real estate investing! Flip vs BRRRR vs Buy and hold. In-State vs Out of State. The right choice ultimately depends on your goals, level of experience and where you're starting from. It also depends on the amount of time you're willing to put in.
    I do a lot of work in Tacoma and know the market well. Happy to chat with you more!

    [email protected]425-880-2580
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    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Elmer Bonilla Congratulations on your decision to jump in. Many don't get this far.

    Yes, If were in your shoe, I will tap into the equity in my primary residence via HELOC.

    Yes, Out of State Investing is a great option for you since you live in Seattle (An expensive Market).
    BRRRR is a great strategy, just make sure you have your SOLID CORE FOUR in place
    Read @David Greene Book on Long-Distance Real Estate Investing and that your get you started.

    Look for an ON-FIRE Real Estate Agent and the rest will be a breeze.

    You do need to narrow down your search to your 2 top markets and go ALL-IN.
    I will strongly suggest you focus on 1 niche for your first 1 year if you want to gather the momentum you need.
    Goodluck

    [email protected]832-776-9582Podcast Guest on Show #469
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    0Reply
  • Matthew Kimball
    Investor · Lake Stevens, WA · Member since 2016 · 36 posts · 19 votes
    5y

    Welcome! 

    I love the idea of selling your primary and house hacking a 2-4 unit multi. If you are willing to go through the process of living like that you can make massive steps forward with relative ease and simplicity. Say you do something as simple as house hack just one three-plex for each of the next 5 years... you could buy a primary residence at that point and end up with 15 doors! That puts you well on your way to financial freedom.

    I am flipping houses for cash flow to invest into rentals, but I am not in a position to house hack. If you like your W2, just do the house hack method for 5-10 years and you can be free. Flipping is not necessary, but could used to expedite your timeline. I have used my HELOC a ton. It can be a great tool, but just make sure you are using it carefully so you don't get in financial trouble. It is not free money, but a tool to leverage you forward.

    I like out of state investing for the prices, but generally would much rather have local properties. I am in Lake Stevens and it's getting pretty pricey up here, yet still much lower than in Seattle.  "Generally" I don't think the market matter too much, it's all about the overall deal. You can buy stuff out of state for much less, but the earnings are generally much less as well so it's a give and take. Personally I would rather have twice the units out of state that have growth potential, but that's because it it much harder to buy into King/Snohomish County.

    If you think about your overall goals for you and your family, that can help you decide your path. Flipping is a different path than wholesaling, which is also different than rentals. You CAN do them all, but they are each a different animal. Always the best option is to focus on one until it gets momentum. If you like flipping, go for it. But if it's only a tool for rentals, then skip it and just focus on methods to get rentals.

    REMEMBER... this is a marathon not a sprint. Make a little progress every year and you'll be well set in 10+ years.

    I am in Lake Stevens so feel free to reach out.
    0Reply
  • Jay C.
    Seattle, WA · Member since 2014 · 307 posts · 170 votes
    5y

    Respectfully you would have to have a screw loose to want to get involved in real estate investing right now with market conditions and CoV. Especially in WA state where laws are coming down the pipe to make being a landlord miserable and likely unprofitable.  Now if you have cash and can take loss when you dont get paid that's one thing but if you are like most here when in truth the banks own your properties forget it. 

    I cannot dump my properties fast enough. Getting top dollar for them as well. In the end Good Luck and you are going to need it. Keep in mind the failures on this site and there are many seldom circle back to paint the reality of things. 

    0Reply
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