All Forum Posts by: Sean Smith

@Lily Tang there's a lot to consider when stacking a few strategies together like this (HELOC to fund down payment + STR + MTR/LTR potential).

A few things I'd be thinking about:

- Focus on high bedroom-count properties. Right now short term rentals that offer unique stays for large groups often outperform the standard SFHs. Hotels and other STRs struggle to compete with a 5 bed house with a view for example. Plus, a large bedroom-count property cash flows much better using the MTR/co-living strategy over a standard 3bed 2ba.

- When analyzing STR revenue use multiple data sets, not just one. Unless there's proven STR revenue from the seller, AirDNA is what most lenders will use to underwrite a STR deal. Stack together AirDNA, Awning, Mashvisor, and others to get a healthy look at Revenue, ADR, and Occupancy.

- 20% down on a SFH in Seattle proper will be tough to cashflow if you go LTR. But a SFH property with a DADU already built? That'd give you a better shot. Able to swing a small multifamily? I see multifamily deals pencil for LTR fairly often and can diversify your income streams.

@Chance Quinlan good on you for getting started. You're completely right how overwhelming it is jumping into investing for the first time.

Here are a few resources I often give to people getting started:

- Free Online Rental Property Calculator and the Bigger Pockets Calculator

- Niche.com : neighborhood scoring tool and dataset. Use this to compare/contrast zip codes locally. Decent data for neighborhood ratings, school ratings, crime statistics, etc.

- A few books I recommend Millionaire Real Estate Investor , Bigger Pockets Beginners Guide , and a required reading if you've haven't before Rich Dad Poor Dad

- Pick a strategy & market to start with -- don't try to do 20 different things at once (this gets you nowhere!)

Good luck and welcome to the BP community!

@Pritam Karmakar online sources like Redfin and Zillow are good starting points for small multifamily and the occasional larger multifamily deal. Crexi and Loopnet showcase more commercial, industrial, mixed use and multifamily deals. Better deals are found networking with brokers, wholesalers, and other investors in the local area. The best deals are ones you source yourself direct-to-seller.

If you purchase a 2-4 unit building you can usually qualify for 30-year fixed loans. If you purchase 5 units or above you'll typically need to obtain commercial financing. Commercial loans often are fixed for less time (5-10 years is common) with smaller amortization periods (25 years is pretty common).

Hi Lisa, I know that MacPhersons handles association management in Seattle & surrounding. It'd be worth giving them a call. Happy to make a direct introduction as well just shoot me a message.

Welcome aboard @Ale Ayestarán and hello from Seattle! Excited to see where you steer the BP ship!

 Hey @Joey Klusmann jumping in to the PNW real estate game is exciting! I'm very familiar with the major WA markets but less so the OR markets.

To answer your questions:

1. Is a HELOC the best way to access cash for purchasing an investment property, or are there better alternatives?

You can absolutely use a HELOC to access capital, though it comes at a cost and may further hurt your already tight cashflow numbers. It doesn't hurt to get a HELOC in place now in case you stumble upon a lightning in a bottle opportunity where you need the capital. But I wouldn't call it the most efficient capital.

2. Are there any loan options that allow for a low percentage down payment on an investment property if we don’t plan to live in it?

Non-owner occupant multifamily loans are almost always 15% down+. 

3. Is there anyone familiar with the Pacific Northwest market who can offer tips or advice on finding cash-flow-positive properties?

I find cashflowing rental properties fairly often here in the PNW. It comes down to your risk tolerance, willingness to live in a unit or not, and where you want to live. This is very much possible. For example I came across a townhouse-style duplex recently with 2 2bed/2ba's in the high 700's. Each unit would rent for 3250+ and would be a decent live-in 3.5% down play. Is this massive cashflow? No. Is there room to budget for maintenance, capex, vacancy, etc? Yes. 

Unless you're willing to put a substantial amount down (30% or more) or live in one of the units, it's not easy to find cashflow. If it was easy, everyone would be doing it ;)

Hi @Daniel Budnik congrats on deciding to start! House hacking is likely your best way to get into the market these days. If you intend to live in the property you can use an FHA loan which only requires 3.5% down ($26,250 using your $750k number above) plus some closing costs. If you go for a multi family you can use the expected income from the other units to help you qualify for higher purchase prices. If you can swing it you should look for something that needs a little work where you can get in at a lower cost basis, build some sweat equity, and benefit from these low down programs.

My first deal was a live-in renovation. Works great when you're young and don't mind a wild mess of a house for some time. Nowadays the wife and kid make it a little harder to pull that off ;)

@Devon Smith I recommend asking your agent/broker for their favorite inspectors - they should have a few. If you still need a great one though, I'd suggest giving Ryan Lepine a call. He is incredibly thorough and to the point. Big fan of his approach. 

Ryan Lepine - Lepine Home Inspections

206-235-6919

@Ren Navarro welcome to the forums. Development is a hot segment of the market here locally. ADU & DADU plays are becoming increasingly common with the favorable changes to residential zoning. Any specific area you're looking at?

Thank you for clarifying - this is an important distinction. Owner occupied small-multifamily properties make up a good chunk of the new-investor market. Here's hoping new investors will remain incentivized to jump into the game. Otherwise the 2-4 unit buyer pool may shrink.