All Forum Posts by: Ryan Schickerling

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $275,000
Cash invested: $40,000

Short term rental on the Olympic Peninsula

What made you interested in investing in this type of deal?

Cash Flow

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Conventional

How did you add value to the deal?

Redid the floors, updated the kitchen

What was the outcome?

Cash flowing short term rental

Lessons learned? Challenges?

Very difficult to find reputable tenant turnover, especially during a pandemic and labor shortage.

I just purchased a 2nd home in Port Angeles, Washington using a vacation home loan with 10% down. I intend to vacation there occasionally, and the remainder of the year rent it out on AirBnB/VRBO. I have done some superficial research about tax laws in the state of Washington and came across an additional tax paid for STR, and that a LLC is required to file these taxes with the state.

I am requesting some advice with best steps forward. My preference would be to not create an LLC at this time.

@M Shah I was looking to get at least 50-60% of my monthly mortgage payment covered by the tenant, and for my portion of the monthly mortgage to be less than what I was currently paying in rent for a 2 bed 1 bath in Seattle. That way, at least I was building equity into a home that will appreciate well. 

I think if you're interested in househacking for your first deal, the first step is to identify what type of living situations you are comfortable with. For me, I have a girlfriend and a dog, so having a completely separate living space was a must when looking for a home. There were some properties in Seattle that would have required a lot of work to make 2 separate living spaces, but the better deals were just outside of the city. Given the competitive market, and my inability to put 20% down, I was getting outbid on a lot of the duplexes/SFHs with 2 kitchens and was forced to think outside the box to create my own. In the end I'm very happy with the home, but the renovations, tenant screenings, purchasing a home for the first time, and then refinancing was a good amount of work.

If you are more flexible with your living situation and open to having roommates, I think an easier and more profitable way of househacking is purchasing a 4 bed 2 bath SFH and renting out by the room.

Once you determine what your ideal living situation is, next step is to get pre-approved by a lender.

@M Shah, definitely agree with the above. I am currently househacking in unincorporated Renton, purchased a split-level home in 3/2019 with a 5% down conventional loan. Was able to convert the lower level into a separate unit by adding a kitchenette using no interest 18 month financing through the construction company. Now I have the lower level rented, recently refinanced to a lower rate, and almost have my mortgage completely paid for. Definitely recommend househacking as a first deal as it exposes you to a lot of the aspects of real estate investing.

I looked at many neighborhoods in and around South Seattle so I could be within a 30 minute commute to work. Renton fit that category, but I also looked at properties in Des Moines, Kent, White Center, Burien and Federal Way. The main thing I was looking for was a duplex or a split level home that I could convert to 2 separate, livable units. This house was the latter. 

Investment Info:

Single-family residence buy & hold investment in Renton.

Purchase price: $456,000
Cash invested: $21,000

Househacking, 3.5% down conventional loan. Rentable ADU.

What made you interested in investing in this type of deal?

First property, buy and hold, decrease monthly expenditures

How did you find this deal and how did you negotiate it?

Real Estate agent, networking

How did you finance this deal?

Savings + Conventional loan

How did you add value to the deal?

Bought below market value, adding Kitchen and patio

@Jeff Burdick thanks for the input! And I’ll also keep Irving park in mind. I really appreciate the advice.

I was not aware of the 5% Home Possible loan, I will do some research on it. Thank you!

Thanks for the advice! I’ll be sure to take talk to a lender very soon.

Thanks for letting me know!