All Forum Posts by: Michael Haas

I agree with @Steve Vaughan - Our strategy has been to House Hack every single year until we either 1. have enough money to put 20%+ down on an investment property loan, 2. Have a baby or other life circumstance that makes it too difficult 3. get sick of buying rentals and decide to sell them to folks from Bigger Pockets at a significant discount (Just fishing on that last one ;) ) 

Good luck and keep the ball rolling!

@JATIN KALRA "Personally, I would rather live in a 1 bedroom condo rather than 5 bed 3000 sqftSFR even if they were both same rent."

You are not your tenant my friend - I assume since you'd rather live in a 1 bed condo your single or with a partner but no kids. Your tenant in a 5 bed house will be a large family, or (much more likely in the Puget Sound Region) a group of young professionals each with their own room. 

Our experience is that Condos/Townhomes tend to be easier to rent but are often harder to cashflow. We've had a lot of success cash flowing large single family rentals, often rented by the room to young professionals.

Kent and Auburn will likely be quieter rental markets and you may see a bit less demand, but that's just me guessing - we don't have any rentals in Kent or Auburn :). 

Good luck! Feel free to PM me to grab a coffee and talk about rental strategies in more detail. 

With the amount of capital you have saved up you could definitely do a house hack here in Seattle, and definitely won't have to pay more than $1,000 for the remainder of the mortgage. They can be hard to find, but most of our Seattle house hacks have paid us to live there, and the ones that haven't had all cost less than $1,000 for the remainder of the mortgage. We buy detached single family homes, but you can definitely go with a town-home if that's what you'd prefer- you'd want to focus on large square footage, high bedroom count, and consider avoiding luxury features that add cost like rooftop decks unless they're important to you.

Typically house hacks operate similar to a home office deduction - take your eligible, deductible expenses and multiply them by the portion of the house that is a rental (for example, if you buy a 4 bedroom town-home and live in one bedroom you could deduct approximately 75% of eligible expenses). I'm not an accountant so you should definitely talk to your's, but this is the advice we've received from our accountant. 

My two cents on PMI: its not that bad if your credit is good, and there are a lot of benefits to minimizing your cash investment in a deal. Cash-on-Cash return/ROI will almost always be significantly higher on a 5% down payment than a 20% down payment, even with PMI.

PM me if you'd like to grab coffee and talk house hacking! We've been buying a property to house hack just about every year since 2013 and have a solid portfolio of rentals now, happy to share what has worked for us. Cheers!

Seattle can be a great rental market despite all the regulations we like to complain about. Shoreline, Bellevue, Renton, Tacoma, etc are all great choices as well. Just a matter of deciding what is important to you, what you're good at, and where you want to go and start narrowing your opportunity set. Best of luck and feel free to reach out with specific questions!

As long as the property is 1-4 units the lending requirement can be the same/similar to a Single Family primary mortgage, but 5+ units would have to be a commercial or investment loan (typically 20-25%+ down and different terms). 

Are you thinking of buying a small multi-unit property and “house hacking” it for the additional income @Munish Suri? That’s how we started investing, a great strategy for high cost areas like here in Seattle!

And if you ever find yourself dealing with more complicated electrical issues do give Eco Electric a call, they do a lot of work for us and they're really kind and honest folks. Cheers!

LOL. A great example of Occam's razor: "of any given set of explanations for an event occurring, the simplest one is most likely the correct one."

Congrats on the house hack @Kamran Rahman and glad the electricity is back on. We're in Seattle too, let me know if you'd like to grab a coffee and talk RE/House Hacking sometime. Cheers!

Its unlikely that the HOA / Building is having an issue but it never hurts to check. Your main feed into the circuit breaker is live (because some fixtures have power) so the problem is between the circuit breaker and the dead outlets/heaters, which should all be inside your unit and involves your wiring.

I house hacked a new property each year in Seattle and now own 6 rental properties, and if there’s anything being a landlord has thought me it’s that tenants can be kinda dumb sometimes. I would hold off on assuming you have a bigger problem until checking the box personally, and I would get a “tic tester” ($19.99 device that looks like a pen and tests for electrical current) and check your outlets and heater for power if that doesn’t work. 

Hi @Kamran Rahman - typically when you lose power to all or a portion of an electrical circuit it'll be one of the following:

1. Circuit breaker has flipped (basic I know, but you didn't explicitly say you checked the breaker so its worth double checking)

2. Broken Run - you have power at the box, at the breaker, and at least some of the outlets or lights on the circuit. Its possible that a wire was cut, a daisy-chained outlet was jiggled loose, or something of that nature. The wires connecting to the dead outlets do not have power.

3. Misswire/bad connection/ broken outlet - The wires connecting to the dead outlets are live, but the outlet is dead. Check that the outlet is wired correctly and making good contact with the line and/or replace the outlet.

If this sounds like to much bother or you don't care then call Eco Electric in Sodo. They're great but, like all good electricians, not cheap.

@John Myers is right - its hard to beat a 2-4 unit property with an FHA loan as a way to get started, especially in expensive markets like Seattle. Househacking a large 4-8 bedroom single family home is just as good, and deals on those properties are much more readily available than small multi-families.

Are you considering investing here, out of state, or undecided?