First Time - Multi-Family House Hacking - Seattle Area
Hi all - I am planning on moving to the Seattle area in the next several months and am thinking about researching multi-family properties to house-hack as my first ever Real Estate purchase. Just curious if anyone has any tips/tricks as I begin this process. Would love some information on loan types, books to read, podcasts to listen to, etc. Pretty new to all this so appreciate the guidance!
Hi @Connor Christensen, happy to hear you are looking to get into house-hacking! I would love to share some tips and tricks I've learned on my journey as an investor so far. I send you a connection request!
Hi Connor! I am a house-hacker myself in the Seattle area. Books and podcasts are great (Todd Baldwin's BP episode is really great on house-hacking). I would also say, spend time looking at what the Seattle markets have to offer in terms of multi-family/house-hackable buildings.
I would say Seattle is unique in that the average home can be quite old compared to other markets. My house-hack for example is over 100 years old! Some neighborhoods have 100+ year old homes that have been converted or can be converted and other more suburban neighborhoods may have the newer duplex, triplex options. There are pros and cons to each, I am happy to answer any questions you have!
Hi @Connor Christensen, house-hacking is a great way to get started. My first home was a house-hack, though I didn't hear that term until about 13 year later! Mine was a 6-bedroom house, that nowadays could be operated legally as a duplex (had 2 kitchens). There are a lot of great resources talking about this here on BP for sure. Another unique thing about the city of Seattle specifically is that Seattle allows for a single family home to have 2 ADUs (accessory dwelling units), one of which can be detached. I would suggest looking for something that has good potential for adding 1 or 2 units. That could be a space where it would be easy to add a kitchen, a large back yard, an unfinished basement or attic (preferable with decent ceiling height). Could even be a garage that could be converted or added to. The beauty is that Seattle removed the requirement for owner occupancy a few years back, so when you're ready to move on, you could legally rent out up to 3 separate units. Hit me up privately if you'd like to discuss in more detail (I've got plenty of ideas, but too much to share here).
@Connor Christensen- welcome to the PNW and to BP - if you will need financing for your plans - best first step is to get formally pre approved for whatever scenario you are insterested in ...without financing in place , lots of the other steps wont happen
@Connor Christensen, I did house hacks myself and helped many clients do the same.
What form of house hack you have in mind? Rent by room/ Split level house/ ADU/ DADU/....?
Do you need to be in the City of Seattle itself, or one of the surrounding cities will also work out for you?
Quote from @Connor Christensen:Hi Connor, Make sure you check for noise if you are going with units with multiple floors. I house hack a duplex in Seattle which is two story and noise is one of the main problem. Good luck with your search!
Hi all - I am planning on moving to the Seattle area in the next several months and am thinking about researching multi-family properties to house-hack as my first ever Real Estate purchase. Just curious if anyone has any tips/tricks as I begin this process. Would love some information on loan types, books to read, podcasts to listen to, etc. Pretty new to all this so appreciate the guidance!
Be sure that you are well familiarized with Seattle rental regulations. Seattle is extremely tenant friendly and extremely landlord hostile. For example, with limited exceptions you cannot screen for criminal history, you cannot evict anybody (even under "normal" circumstances - we are still in the extended covid eviction protection period) during "winter" months or if they have kids or are in any way involved with the school system. You have to register your property and comply with inspection standards - most are pretty basic but there are some stupid standards like forcing all handrails regardless of age to be updated to modern standards that seem designed to hit everybody. You can't stop a tenant from bringing in their own roommates if their space legally can accommodate the extra people (and there is NO enforceable occupancy limit if you rent a single family house), and you can't meaningfully screen those roommates. Removing somebody for lease violations (other than rent nonpayment) or even squatters can take years. You have to offer payment plans to any applicant that requests them for deposit and last months rent and you can't consider that they elected that in your screening process. You have to go through formal third party mediation and offer payment plans if somebody falls behind on rent before attempting to evict for nonpayment. You can't charge a nonpaying or lease violating tenant your legal fees. Late fees and other such charges ancillary to rent are severely restricted or banned. The city pays tenant legal representation costs - you are on your own. The list goes on and on - in the last 5 years or so something like 39 tenant protection ordinances have been passed by the city.
The region is great as a whole, so you might want to consider a different close by market - Renton and Burien are both good options adjacent to seattle and there are others too.
If you are serious about seattle, before you do anything else attend RHA (rental housing association) www.rhawa.org seminars for new landlords on renting in seattle, and I think the city also does new landlord orientations periodically see https://www.seattle.gov/rentin...
It will be helpful to figure out what your price point is and that will determine location. One of my friends house hacks in Magnolia (has roommates) but she bought in 2018 with a low interest rate. She pays nothing to live there. Happy to chat with you about what you are thinking and give you some thoughts on the area.
Congrats on deciding to make the leap in to REI!
With a multifamily, unless you have cash, you'll have two options: At least 20% down on a conventional loan OR 3.5% down on FHA. In my opinion, you should only go FHA if you have no other option, but it's still definitely worth it if that is the only way you can get your foot in the door. There are other non-conforming options, but they'll be quite a bit more expensive.
Beyond that- you are in a good place to get more specific questions answered. A house hack like you are considering is the BEST way to start a portfolio. Just put it in your mind that you'll move and repeat this process every year or so for 10 years and you'll likely have the option to stop working if you like.
Good luck!
If you are purchasing a multifamily property as your primary residence (which you are if you are house-hacking), then you should not need a 20% down payment. But of course, you should verify that with your lender (or various lender you are comparing).
- Real Estate Agent
- Seattle Investor: 80 Client HouseHacks & Counting! I Own: 🏠7 LTRs 🗻6 STRs, 🏘️3 DADU's
- 1,383
- Votes |
- 682
- Posts
Hey @Connor Christensen - Househacking is how we built our 11 property portfolio, its a great way to get started! My wife Jess & I are on HouseHack #4 here in North Beacon Hill.
Seattle is great for allowing ADU's and DADU's on nearly all lots larger than 3,200 sq ft, essentially giving all houses the potential to be legally converted into triplexes! As others have mentioned the landlord tenants laws are strict in Seattle, which is why I reccomend ADU's and DADU's in Seattle (as its harder to use that strategy anywhere else) but for true Multifamily properties we recommend looking outside the city (as you can do that strategy anywhere)
Price points tend to be lower on the South Side of Seattle than on the North Side, so depending on your loan pre-approval amount, the number of units you're looking for, and the affordability of each of those neighborhoods you can start narrowing down your search from that.
Just a couple tips for you as you get started Househacking:
1. If you find a property with a second kitchen (ADU or MIL), be aware that 80% or more of those units have been built without permits. Not a deal breaker necessarily, but a risk to be aware of and mitigate.
2. Brush up on building code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)
2. Check the unrelated persons count in any city you're interested in. Seattle allows 8 unrelated persons in a rental house, unincorporated Snohomish County allows 6, but some cities allow as few as 3-4. House hacking financials get significantly stronger as you increase the bed count above 4, or add a ADU or separate dwelling unit. *This is more important if you're "renting by the room" with roommates than if you're "Renting by the unit" in a multifamily or a single family with your own private kitchen and entrance.
3. I've had success with cashflow rentals around Seattle 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 5-9 bedrooms SFHs that you can househack by the room or split up with an ADU / MIL. Building DADU's is a great strategy, and there are options to finance them so you don't need to pay the full construction costs out of pocket. Establishing a short term rental / airbnb in part of the home is another great way to maximize rental income.
Cheers and good luck! Message me anytime if you'd like to grab a coffee or hop on a phone call and talk house-hacking, it's definitely changed me and my wife's life for the better!
Instead of writing another post, I'll just echo what Michael Haas said above! Good luck Connor