Is cash flow possible in Seattle

[Chen Tong]

I want to purchase an investment property in Seattle. Searched many deals but wasn't able to find one any where close to 1% or 2% rule. The cash flow all come down negative. Is Seattle area still worth buying? 

[John Barrett]

@Chen Tong you really are not going to be able to use the 1% or 2% rules of thumb in the Seattle MSA.  Seattle and the surrounding markets have experienced very high level of appreciation over the last few years. Those rules are more applicable for markets that are centered on cash flow (generally low appreciation). 

You can still find deals that make sense on the MLS though you will need to be patient (wait for the right opportunity) but prepared (ready to submit a strong offer on a property that meets your criteria). Given the low level of inventory there is a lot of competition for every property. At some point it will change and become a buyers market, however that appears to be a ways off.

As such, this likely means you will need to change your investment strategy.  Look for ways you can use what's currently available on the market to generate higher returns (greater income or lower operating costs) or offset your living expense while capturing market appreciation. This could be via house hacking or renting by the room style models.  Regardless of what's going on in the market, you always have choices.  Choosing to save money and wait for a better opportunity is also an equally valid choice.  Just focus on what will work best for you and move you towards your ultimate goal.

Best of luck,

John