Having trouble finding 1% rule property in Washington state

[Weijia Yu]

Context: 

I live in Seattle and plan to start BRRR investment. However, I couldn't find any public 1% rule deal in Washington state, even in Spokane.

Question:

Is it realistic to find properties that meet 1% rule in Washington state? If yes, should I try more sources such as foreclosure?

[AJ Shepard]

@Weijia Yu

The 1% rule is only a back of the napkin quick calculation to see if the property will make money. I would start to develop a pro forma deal sheet and start evaluating deals.

We are buying in portland and surrounding areas, they do not all meet the 1% rule as they are sold, but with a value add component to them they can get there. Same thing with the CAP rate.

First of this year we bought a 4 plex for 385k rents at 600/unit. This would be .6 of the 1% rule. We put 70k into it, some cash for keys and raising rents to 1100/ unit. When you look at that calculation 4400/455k, it’s pretty close....

Deals are out there in this area, you just have to look harder and be willing to put in some work. If you think that you’ll just have something drop in your lap it’s not gonna happen. Search for wholesalers in the area and get on their list. Drive by houses and send hand written notes. Knock on doors and talk to people.