All Forum Posts by: Michael Haas

@Eric Healy - the market here in Seattle dropped sharply in the Summer of 2018, but has recovered its footing since then. Those Seattle Times numbers at looking at YOY returns, which are in fact positive returns when you look at the bottom of the dip (late 2018) to now.

Hi @Jenna Lee - as an investor definitely make sure your primary residence also performs well as a rental- even if you aren't "House Hacking" and just want a home to live in. I'm speaking from personal experience here - our first primary residence wasn't a great rental, and we ended up selling it (and paying commissions, excise tax, etc!) rather than renting it out when we moved. Always better to have options and to hold properties longer for those better late-term loan pay down rates.

We house hacked our way to 3 properties in Seattle and have 6 now - all fixers, so we have a pretty extensive list of contractors and handyman. I pay $20 for labor, $25 - $30 for handymen, and $40 for contractors. As a newer investor with less volume you may find that you have to pay more though.

Most investors or investor-agents in Seattle won't refer you to their contractor / handyman teams, out of fear they'll take your project, get too busy, and not be available for future projects. I'm the same way - As an agent I only give clients access to the folks we work with, sorry I can't help more! On that note - if you're looking for an investment-focused agent don't hesitate to drop me a line over messages!

@Thomas L Hall - @John Barrett is correct that a lot of us Seattle area investors are searching for good and fairly priced GC's, Laborers, and Subs! Definitely feel free to message me if you have time between your own projects to come work on ours :D. 

Cheers and best of luck!

I second checking out Fixated on Real estate - I've been pleased with the networking and speakers we've seen there so far!

I don't see numbers that strong in Seattle often - which means you either found a heck of a deal or someone is wrong. Is this a off market deal with a seller facing personal hardship and dumping the property or something on the MLS? If its something on the MLS really triple check those numbers...

Given the school ratings I assume you're looking at South Seattle - if so you're not going to get that ARV anywhere but the CD, N. Beacon Hill, Columbia City, Mt Baker, Admiral, or something on the water, 1.2M anywhere else is an abnormality.

Whats your estimated cost for the four month rehab? Super high-end?

Cheers and good luck! Happy to help with the #'s if you're able to get a bit more specific.

I second the house hacking recommendation -We house hacked our way to 3 properties in Seattle and have 5 now - it really works! With the WSHFC down payment assistance program you can get into a house for pretty much just the closing costs- could be just 6k up front cash to close on a $500k house. If that house has a unfinished basement you can finish and rent out, or even just extra rent-able bedrooms, your mortgage payment will likely be significantly less than you currently pay for rent, + you reap all the tax benefits and forced savings effects of home-ownership.

I've had success with cashflow rentals in 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 6-9 bedrooms SFHs that you can rent by the room to young professionals and college students. Most are also are not establishing STRs, especially now that Seattle regulations limit most families to just 1 Airbnb/STR outside their primary residence.

Send me a message if you want to talk more about House Hacking. Its a great and low cost way to get started, and we wouldn't have been able to reach financial independence so quickly any other way.

PS: Don't try to time the market - I personally don't think Seattle is about to crash but hey, you could be right, I could be right, who knows. Make good investments no matter the market climate and you'll do fine.

@Cole Druffel
A FHA multifamily is a great place to start, and you definitely need to talk to a lender sooner rather than later - don't assume you can't qualify until you try!

If you're having trouble gathering the down payment, there's a Washington State Housing Finance Commission program that could help. WSHFC is a non-profit dedicated to helping every Washingtonian own their own home, and this program allows us to take out a loan with 3% down, then get 4% down payment assistance so the cash required to close is super-minimal (as little as $6,000 in some cases, depends on the purchase price of the property though).

This strategy works really well when you can combine it with “house hacking” – finding a house with separate entrances or a tall basement that can be rented out while maintaining your privacy. One reason this works so well is that owner-occupant financing (when you live in the house) has lower interest rates than investor/landlord financing, so you get the best of both worlds if you rent part of your primary residence out – rental income, tax deductions, and low interest rates on your home loan.

A lot of people I work with have no idea that programs like this even exist, and just assume they need 20% down, or a $100k, to buy a house. Totally not true! I definitely don’t want to push you either way on a big decision, but if buying a house someday is something that’s on your radar I do want to make sure you know about all your options.

You need to attend a homebuyer’s class taught by a WSHFC trained Realitor and Lender, I’m trained and am teaching a few of these early next year. 

Feel free to message me if you want an intro to a good investor-friendly lender, or want to talk more about house hacking!

Sounds like you're looking to do some Airbnb arbitrage without purchasing any property, is that right @Falisha Lee?

We have both STRs and LTRs. Our Airbnb in Seattle makes a killing and we've got one in Homer, Alaska that is ok. @Barry Je I would strongly consider the following markets for Airbnb/VRBO:

WA: Leavenworth, Highway 2 corridor, Walla Walla

Oregon: Bend

Waterfront is nice but the price premium tends to make it a bitter harder to get good AirBnb cash flow - since you mentioned that you're looking to cover expenses, not generate income, this may not be a big issue though.

Good luck and message me to talk about Airbnb anytime! STR's are a core part of our portfolio and strategy.

Never count on solely appreciation @Sun Kim - and friends don't let friends buy with negative cash flow! Your first deal's cash flow is the engine that powers you to your second property and beyond. 

If you've never bought a property before an owner occupied house hack or multifamily is probably the way to go. That's the way we started, and it made it very easy to snowball into the 5 properties we own now. Happy to grab coffee with you sometime and chat more, feel free to send me a message!