Advice on first property... BRRR or move in ready? WA state.

[Jason Khoury]

Hi everyone, this is my first post here.  I am a recent college grad (May '23) and getting married in August.  I am looking for my first property in NW Washington.  I am considering two properties.  Both are small, but within my budget. With rents being inflated in this area I would rather paydown my own mortgage than someone else's.  

One of the homes is move in ready, with very little potential for value add due to the awkward layout and limiting lot size.  $370k

The other property is very old (1920), with orignal electrical, windows and plumbing. The lot is 3x the size of the other option and the home has very high potential for value add. (Detached garage, larger lot, rapidly growing region) Financing would be FHA 203k.. $380k

My questions are: In todays market would you jump into a BRRR with the upcoming election and uncertainty in the markets? Or would it make more sense to get into a move in ready home and play it safe?

I know that much of it is based on personal risk tolerance but any advice would be greatly appreciated. 

Thank you!

[Sarah Reece]

Hey Jason! I'm in your area (Edmonds, WA) and shocked that you can find anything upright at those prices. I'm impressed!!

My question would be how much noise are you up for and what are your longer term goals?

The rehab property obviously has a ton more potential...is that what you are looking for? A lot of the neccisary work will be expensive without much short term ROI. Plumbing/electrical, etc. is not for the faint of heart and only make sense to me if you are looking a buying and holding for an extended period of time. With a 203K you won't be able to do much of the work for yourself, so that is a limiting factor on how much you can get done astetically in the begining. Homes like you are describing are a bit of a lifestyle for awhile (not a bad thing as long as you know that is what you are doing for the weekends and with your free money). The other home sounds like more of a set and forget type - move in and then get back to living your life as you see fit. Your investment will grow with the market, which based on our geography will continue to be increasing for a bit since we are so limited on supply.