All Forum Posts by: Michael Haas

Definitely possible to cash flow in Seattle, especially on the south end. Its definitely harder to buy off the MLS, but you can get a deal done if you aren't competing with retail homebuyers. To give you an idea of the properties you should be looking at though, here's my last five deals in Seattle, all at 6.5-9% CAP rate:

1. N. Beacon Hill 7 bedroom, extensive cosmetic reno needed

2. West Seattle cabin - structural issues, cash only

3. Judkins Park 3 bed (with an option to make a DADU in the back of the large lot) - added a bathroom, extensive cosmetic renovation, some structural.

4. N. Beacon Hill estate sale (I won't even tell you how many bedrooms this one has, suffice it to say its a lot) - extensive cosmetic, rat infested, some water damage.

5. Admiral neighborhood (West Seattle) View 5 bed - Hoarder house (4 dumpster loads), Estate Sale, Extensive Cosmetic needed

See any patterns? In buy in hold rental investments your friends are - 1. lots of bedrooms 2. absolutely disgusting properties with good bones, and 3. quick sales, especially estate sales or similar. Although most of these were on the MLS, they were the listings with no pictures besides the front door, and they were definitely not professionally staged lol.

PS: You should never count on appreciation as an investor, but at the same time owning 3-5 half million dollar properties and adding 200K to your net worth in those occasional 10%+ appreciation years isn't a bad deal!

PPS: Some of these were cash only properties, so you won't be able to access those deals unless you have the wealth, experience, or network to be trusted with someone else cash. You'll re-fi out of those properties anyway so you do get to re-use the same cash over an over again and/or pay back your line of credit/investors, which definitely helps. 

Cheers and best of luck! Feel free to message me with any specific questions, and definitely keep posting on BP - we're all here to help each other succeed!

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.

Always happy to talk more about house hacking if you have specific questions you want to message me about- 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!

Hi @Thanh Mai Do - contractors are so tight on time lately, it’s really hard to get a good deal. We’re currently rehabbing two properties at once so everyone I’d recommend is already on our jobsite 😅. What are you looking to get done? Full rehab or just a few things?

@David Clark - that’s a super common misconception- WSHFC assistance is definitely not just for first time homebuyers! There are a lot of different programs, but the general requirement is that you do not currently take advantage of WSHFC- so as long as you sold/don’t own the first home you bought with WSFC funding, you can buy another with one of their programs. 

What kind of rent are you paying on your $4,200 market rent property? if you’re getting a sweetheart deal you should hold onto that and just buy a straight rental somewhere like Tacoma or Rainier Beach, Seattle. 

I've seen a few good meetups on the north side but less happening consistently on the south side- which is ironic because South Seattle definitely cash flows better :). 

We've been thinking of starting something regular in North Beacon Hill, and in the meantime message me if you'd like to meet up and chat. Cheers!

We house hacked our first three properties in Seattle, and are now up to 5. Its a killer strategy. As for  Seattle - the city regs can be onerous, but there's a ready supply of tenants and rental rates are pretty healthy. If you focus on large properties, rented by the room or split levels rented on separate leases, you can definitely cash flow on the South side of Seattle. Feel free to message me to chat about where to look for cash flow in King County, and good luck on the first property!

For seattle, look up "Seattle RRIO" to get a overview of the city-specific regulations. 

I second house hacking - with the WSHFC down payment assistance program you can get into a house for pretty much just the closing costs- could be $12-15k 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. 

Send me a message if you want to talk more about House Hacking- We've house hacked our way to 3 rental properties in Seattle, are rehabbing a 4th, and have a 5th under contract. 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.

There's a 6.4% CAP quadplex for sale in Georgetown right now - we passed on it because we're finding better returns on our other seattle properties. Unless you've got really rough financing though that should cashflow.

What’s worked for us in seattle is being patient and creative. There’s a lot of wealth here so if you want a good deal you have to wait for it, or look where others aren’t looking/aren’t willing to look. Good luck!

@Aaron Wong I wouldn’t steer your towards Kitsap given your situation, but there is a fast ferry (passengers, no cars) from Bremerton to downtown seattle that takes 30 minutes and a car ferry that takes 60.  You’re right that if you need to drive without the ferry it’s longer. 

Have you looked at N. Beacon Hill? It’s closer to downtown with a 10 minute light rail ride, is right off the freeway, and more walkable, more diverse, and better cashflow than Ravenna and most of north seattle. 2 of our 5 properties are there and we LOVE the neighborhood. 

You should be getting $1100+ a room for a 3 bed in Ravenna no problem- the basement of our 8 bed houses in N Beacon Hill rents for about $800 a room, and there isn’t much updated and nice housing any cheaper than that. 

We used to live in Ravenna, but I’m not a big fan of the neighborhood. Depends on where you work and what you’re looking for, but there are plenty of other places that are livable, walkable, safe, attractive, well maintained, AND have good rental income. Ravenna is definitely an great owner occupants neighborhood but the price points make it hard to cash flow there.