All Forum Posts by: Michael Haas

PS: Most of the Seattle wholesale deals I get sent are barely deals, but I'm sure there are better wholesalers out there than the ones I'm in contact with :). 

Congrats on the success out-of-state Jonathan! In Seattle we primarily buy distressed properties off the MLS (often estate sales), but also reach out to owners of vacant properties in the neighborhoods where we already have rentals. We just bought a hoarder house off the MLS in West Seattle that you couldn't even walk through - I think it went with 8 days on market and 6 offers.

We haven't had much luck closing off market deals in the neighborhoods we're active in (Class A / B+ neighborhoods for the most part), and when you can get that kind of MLS action on absolutely wrecked properties I'm sure other investors are having as much trouble scoring deals off market as we are.

I'm an investor/agent and work primarily investors, let me know if you'd like to grab a coffee and chat. Cheers!

@Vic V. - I'm not an expert on the permit process, but as I understand it you're correct. Its not enough just to meet the criterion for an ADU though, as you also have to submit plans and receive permits for those additions/alterations.

Simply putting a wet bar in would be seen by the city as just having roommates, and although you would need to get a permit for running new water/electrical to the wet bar (like you need a permit for most alterations) those permits are over the counter and require a simple inspection, usually without plans needing to be submitted or any kind of approval period. 

I don't have all the city-by-city regulations in front of me, but most will have all or some of the three "Poison Pill" regulations that slow ADU development. Those are:

1. Off street parking requirements

2. Owner Occupancy Requirements

3. Minimum and maximum size requirements

This is a LTR right Joe? Definitely legal to manage your own rental property, whether you live here, California, or on the moon. 

She will need to get a WA state business license for her rentals, and register them with the city of Tacoma, but none of that requires WA residency. Just google "Tacoma Rental Property Registration" to find the city forms. 

Best of luck!

Hey Seattle BPers - I've got a challenge for you: pull out your crystal ball, your data sets, and your intuition and predict the highest appreciation Seattle neighborhood in 2020, 2021, and 2022.

Winner gets something. Maybe a trophy. We'll see.

My calls:

2020: North Beacon Hill. Legitimately the best neighborhood in South Seattle (sit down Columbia City). After taking the crown in 2017 (18% appreciation!) North Beacon Hill is due for another big year 

(Or maybe Greenlake- all the benefits of the new Ravenna-Roosevelt lightrail station opening in 2021, without having to live in Ravenna-Roosevelt.)

2021: North Delridge. A hidden gem of a West Seattle neighborhood, with great bus and bike access to downtown. Lightrail is coming in 2031, which will be cool if we're still alive then I guess.

2022: Judkins Park. With light rail opening in 2023 and Vulcan's 23rd and Jackson project celebrating its 2nd birthday, the neighborhood will start blowing up. Who knows, maybe we'll even get some of those those fancy ice cream shops like North Seattle has.

@Edward Seid Bothell is a good recommendation. I think Judkins Park (Close to the 2023 lightrail station, which is at i-90 with entrances of both Rainier Ave and 23rd St) is hugely undervalued and is an incredible choice for anyone commuting to Bellevue. While you wait for lightrail, hang out at the Vulcan redevelopment project on 23rd and Jackson, set to open Summer 2020. 

I'm calling Judkins Park as the highest appreciation neighborhood in Seattle in 2022.

A rare Seattle native sighting!

Howdy Chris and welcome to BP. What part of Seattle are you/your rental in? I assume since you're (digitally) hanging out here that you're looking to acquire more?

Cheers,

Nice @Vic V. - we've been Seattle/Tacoma for almost a decade, but are originally from the Cupertino/San Jose area.

Usually a dwelling unit (like a MIL or ADU) become a dwelling unit in the city's eyes because it has a kitchen, specifically a stove. Its the stove the city cracks down on, as you can work around this by installing a wet bar which can include a sink and fridge,does not include a stove, built-in microwave, dishwasher, a garbage disposal, or a gas line.

With the second kitchen your house would act more like a duplex with two units rather than a house with roommates, in practice the pwnership experience is pretty different when you have a separate entrance and separate dwelling units. 

@Jesse Watson - I'm not a lender, and I'm sure your lender will be able to explain this more clearly (message me for the contact info of some good ones!), but its your "I should be able to cash out some of the new equity for the same monthly payment" reasoning that is messing you up. Pulling cash out of your home through a refinance will almost always increase your monthly payment, because your payments are connected to the balance of the loan. Most investors pull the maximum equity out of their property in order to finance other deals, and accept that their monthly mortgage payment will be higher. A cash-out refinance has different goals than a rate refinance (which is what I think you're thinking of), where you leave your equity in the home and simply get a new loan to take advantage of lower mortgage rates. On a rate refinance you would see lower mortgage payments, but you wouldn't get your cash out.

In your example, if you fully refinance to keep you LTV at 80% you're refinancing a $600,000 mortgage into $720,000 mortgage. You're trading $120,000 of your equity for cash and that cash is coming from a higher mortgage amount.

Its worth noting that your equity and net worth has gone up as well - before you had $150,000 equity (20% of $750,000) and now you have $180,000 equity (20% of $900,000).

Does that make sense?

The drawbacks of house hacking are the same as the drawbacks of almost every other wise financial decision, such as not buying new cars, not going into credit card debt, or investing in your 401k. Just like your friends with massive credit card debt may have nicer clothes than you do, your friends who aren't house hacking will have more space, privacy, and comfort in their own home. From the outside looking in, it will look like your friends are wealthier and more comfortable than you are.

The good news is you won't be paying to live in your home like they are, so you can buy six houses in the time it takes them to buy one. Because of that, while they're at work paying for their house and their junk, you and your wife can be in your living room with your baby, writing BP forum posts at 3:10pm on a Wednesday, because neither of you need a 9-5 job anymore since you have a multi-million dollar portfolio working for you (true story, its our story) .

To answer your down payment question, there are two reasons NOT to put 20% down on a property - you can't afford it, or you can but want to use more leverage to invest in more properties. The reason for this is that Private Mortgage Insurance (PMI) is a requirement for loans with less than 20% down, and it will eat up $100-$300 of your cash flow, every month, until you get 20+% equity in the property. If you get a 3.5% down FHA loan PMI is there forever (or until you refinance).