All Forum Posts by: Michael Haas

@Jacob Ashley if I knew of a city that combined all the best qualities of B, C, D class properties like you're looking for I would have already bought all the houses there, and I wouldn't be telling many folks on Bigger Pockets about it ;). 

I don't have a specific market for you, but my two cents is you might have more success hitting both high cash on cash return & appreciation with a STR rather than a LTR.

Best of luck in your search, but remember: real estate, as in all things, is a game of compromises... and if everything is a priority, nothing is a priority.

Yeah... real estate is fundamentally different than more liquid assets (like stocks).  No one who knows what they're doing would ever recommend trying to sell the peak, rent the downturn, and buy the lows. Even if you time it perfectly (and you won't) Transaction costs will eat up 13% of your capital. So yes - if the market dips 25% and you time it absolutely perfectly you might be able to eak out a 12% gain over the 4 year cycle, which would be 3% per year. Cash on cash return would be higher of course as you're leveraged, but so will your losses if you don't time it right (and you won't). 

@Nicole Brodahl congratulations on assuming ownership of those properties! You're on the right track - I think House Hacking is the #1 best strategy for beginning real estate investors, and BRRRR is a close #2. If I were in your shoes again as a new investors I'd focus on two things:

1. learn your numbers - you need to know the returns, expenses, financing, etc numbers that make a deal work for you. You can waste a lot of time looking at bad properties if you don't have a good handle on your calculations.

2. find your competitive advantage- Snohomish and King County are full of investors, and to stand out you're going to need to play to your strengths. Do you have cash, great financing or a w-2 that makes lending a breeze? Do you have the temperament and flexibility to do a house hack or a live-in renovation? Are you a great manager and have a phone full of reasonably priced labor and contractors for rehabs? Are you a systems guy ready to tackle property management? Do you love learning zoning and RRIO code and excel at building out extra dwelling units or renting existing units creatively to maximize rents?

Once you have these two things figured out its time to pull the trigger!

We're in Seattle, feel PM me anytime if you'd like to grab a coffee and talk more about investing in this region. Cheers!

@Chace Fraser is right - while investment loans almost always require 20% down (and sometimes 25% or more down!) there are lots of great Owner-Occupant loans for 3.5%, 5%, or 10% down. Owner occupant loans also typically have 0.2% - 0.5% lower interest rates than investment loans.

 If you live there for one year the property will have an owner occupant loan for the life of the loan (30 years in most cases!). So yes - if you live in your investment property for the first year you get a lower interest rate, and a lower down payment, for the remaining 29 years or whatever the loan term is.

Congrats! Finishing our renovations faster is a major priority for us in 2020 as well... Best of luck in the new year.

@Anthony Chao congrats on the house hack! My wife Jess and I have house hacked our way to six properties in the Seattle area - it really works.

We lived in Tacoma for 4 years and think its a great rental market - although its less expensive than Seattle is has appreciated considerably, and I don't think you'll be able to get a property that you'll be happy with for $200K without picking up a heavy fixer. We focus exclusively on fixers for our investments, but you should know it's not easy up here - we have a severe construction labor shortage in Seattle-Tacoma, so renovations often take longer and are more expensive than you would hope. Building your network of local contractors, subs, handymen, and laborers is an absolute must.

Feel free to message me if you'd like to talk more about Tacoma. Cheers!

@Jack Hemion - family is a great motivation to start investing! My wife just quit her job so that she can manage our 6 Seattle area properties and spend more time with our 9 month old. We're incredibly blessed that our properties have given her the flexibility to make that leap.

I wouldn't rule out Seattle, especially for a BRRRR or House-hack. I think you'll be a much better investor after some hands on experience, and I think the place to get hands on experience would be here, not with an out of state investment. We're getting some great returns in Seattle - a lot of the folks complaining about the Seattle area not cash-flowing are back-seat critics without any skin in the game.

I think I may have seen that property on the MLS @Mark Chieda - its in South Tacoma?

Sorry I can't help with a recommendation, we've got two rehabs going right now and all my regular guys are busy on our own projects haha.

Congrats on deciding to get started Abhishek! In addition to what's already been mentioned, the Fixated on Real Estate meetups usually pretty good. If I were in your shoes again as a new investors I'd focus on two things:

1. learn your numbers - you need to know the returns, expenses, financing, etc numbers that make a deal work for you. You can waste a lot of time looking at bad properties if you don't have a good handle on your calculations.

2. find your competitive advantage- Seattle/King County are full of investors, and to stand out you're going to need to play to your strengths. Do you have cash, great financing or a w-2 that makes lending a breeze? Do you have the temperament and flexibility to do a house hack or a live-in renovation? Are you a great manager and have a phone full of reasonably priced labor and contractors for rehabs? Are you a systems guy ready to tackle property management? Do you love learning zoning and RRIO code and excel at building out extra dwelling units or renting existing units creatively to maximize rents? 

Once you have these two things figured out its time to pull the trigger!

We're in Seattle, feel PM me anytime if you'd like to grab a coffee and talk more about investing in this region. Cheers!

It’d be worth running the numbers on a large house with a walk-out basement that could be finished out for long or short term rental. I’d anticipate that if you look at the whole financial picture, and include rent savings, owner occupant interest rate savings, smaller downpayment, tax benefits of home ownership, and rental income from the basement then a Seattle house hack will likely perform nearly as well as a high-cashflow out of state property, with a lot less risk. 

We got started via house hacking and have 6 rental properties in Seattle / King County now. Happy to grab a coffee with you and chat about that strategy a bit more- if your interested just PM me!