Newbie starts out to seek the first investment in Seattle area

[Eric Huang]

Hello BP community,

I'm in late thirties. I relocated to Seattle about 4 years ago with my wife and 2 kids (4 and 7). I have a house since 2017, which may offers a line of credit approx. about $100K. I wanted to use the money to start off the journey As of now, I've primarily focus on residential properties with the priority on SFH, mainly because I wanted to start with easy management and get my feet in the RE investing world first. I work in tech industry with a pretty good pay. I love the job and don't plan to quit (at in the next 5-10 years).The RE investment will help me built my retirement quicker and stronger, and on the way there I have more financial freedom to travel and more options in my career path.

I'm looking for suggestions. 1. Seattle is a highly competitive market. Very appreciate if you offer any insights on the areas that can still possibly have the positive cashflow properties? I heard a lot of people talking about N. Tacoma, or N. of Seattle (such as Everett, maryville, Snohomish, etc.). Again, as an inexperienced investor, I prefer handleable prosperities (or via cosmetic flipping) and quality tenants (for class B properties). 2. I want to minimize the cash investment so plan to leverage, such as HELOC. Any recommendations on where to get good HELOC? Thank you.

Eric

[Gideon Sylvan]

Hi @Eric Huang, the greater Seattle area is not great for cash flow, and that's sort of it's advantage. The appreciation has been strong but rents have gone flat or down since covid. The good news is that is in part due to millennial renters becoming buyers, increasing demand for prices and decreasing demand for rents. Tacoma is certainly an option, but I think you'll find cash flow is difficult in north end versus South Tacoma or East Tacoma. Central Tacoma and South Seattle are becoming cooler, so perhaps there will be some rent appreciation there. But at the end of the day, I would think of Seattle in terms of generational investment strategy (what is it worth in 20+ years), and to bundle cash flow losses into the total ROI. For example, if you lose an average of $200 per month for 10 years, you're down $24,000 (with a "0% interest" loan). If values are flat for those 10 years, that's a loss, but if they increase 0.5% per year on average, you're good. I'm not saying it will increase—that's where your investment thesis has to come in. HELOC wise, BECU has historically been a good friend of local investors. I have a few there.