Expensive Market Place - What To Do

[Daniel Heverling]

I am facing a dilemma and I'm sure others are facing this issue too. The issue is multi families are getting very expensive because vacancies are so low and the market is red hot for multi family properties.

I want to buy a fourplex or triplex in my area of Bellingham, Washington. I'm going to live in one of the units and rent the other units out because I'm using a VA loan, so I get to take advantage of zero down.

The problem is that I'm in an expensive marketplace. I have ran the numbers every direction and most every property in the area violates the rules on this site (50% rule, etc) The cap rates are low 6s and the gross multipliers are well north of 10.

So what to do is the issue. Do I just wait on the sidelines because the prices are too high or do I jump in and take advantage of the low interest rates? I am not going to buy in another city because I want to live in the place.

Any thoughts??

Dan Heverling