Out of state - Ocean Shores, Gray Harbor County, Washington market Information

[Sarah Becker]

I am curious if any other Bigger pocket members have explored this are and can comment as to the market conditions and recommend any professionals (contractors, agents, inspectors, handymen, property managers, attorneys or JV partners) in the area.

I am a broker and investor in California I have been traveling in the pacific northwest more recently.

As we all know California can be a pricey market. I have done very well as an investor in CA and while I do not plan on fixing what's not broken, I am considering exploring and expanding into out of state cash flow markets.

My past experience with out of state investing was not a positive one (mind you that this was 10 years ago) but I learned a tremendous amount from my mistakes. Whew... Education is  sure expensive when learned the hard way. I will leave it at that. :)

I have been reading bigger pockets like a crazy woman and I have found a wealth of information. @Brandon Turner's posts  have been a tremendous help regarding Grays Harbor County.

My overall thoughts on the area are as follows and I would love feedback or additions to this from BP members:

 The market is depressed. Foreclosures are high. This reminds me of some of my northern CA markets about 3-4 years ago when I really wish I had been able to by and hold way more properties.  While the market may not be poised to turn around quickly  my thoughts are to purchase properties with positive cash flow and hold for 2-10 years.

Anyone who can weigh in on this market place is greatly appreciated.

[Account Closed]

@Sarah Becker look out, that is @Brandon Turner neck of the woods....he may chase you away from his tucked away gem ; )

I did a preliminary analysis of the Aberdeen / Hoquim area about a year or two ago and decided I did not want to invest there mainly due to the fact that the economy is/was shrinking and it is too far off the I-5 corridor to attract any new substantial businesses. The numbers are attractive though.

[Sarah Becker]

Thank you @Grant Fosheim. I appreciate your feedback. Hopefully I don't get 

@Brandon Turner mad at me! :) I have family in Bellingham WA and was looking up there first as well as Kitsap County but the prices are so high in Bellingham It is not a big change from CA.

I guess ocean shores was mainly of interest due to the coastal waterfront combined with the seemingly very low price points. I've done well with undervalued waterfront properties in the past.  But it sounds like the cost of flood insurance can be a factor on  cash flow and for resale. Still researching. :)

[Aaron Ramm]

I have also been watching the Ocean Shores area for a while to see how I could make some of the low cost properties make money for me.  I just don't see it, as much of the employment there is seasonal, and there's no big industry to support growth.  I haven't ruled it out though......my creative side is ALWAYS thinking!

[Jay Hinrichs]

@Sarah Becker

  grays harbor has been in a slump for years and years... no doubt low end cash flow will work for someone like Brandon who is local... The money in Seattle just does not go there they spend their Microsoft money on water front in the Sound... some of the least expensive ocean front in the entire western hemisphere is located in that area.. these were fishing and timber towns that died...

there is no correlation to were you live  or work.. IE 40 minutes from sac and hwy improvements to 65.. etc.. plus were you live you just get all the overflow from retiree's from BAy area that want to move to the gold country to retire.. Not much of that happening in those areas.. I looked at a few deals there in the day.. Don't think of that area as a rebound area.. it is what it is.. low end cash flow.. and sedentary values.. but I love the airport at Hoquim used  to shoot approach's and have a hamburger .. have not been in a while so not sure if the on airport rest. is still open.

I could be all wrong but that is my take on it.. LOL>

[Brandon Turner]

Hey @Sarah Beckeryeah this area can definitely be interesting! I think it's probably a lot more similar to midwest investing than the west coast. As others have said, the market is not growing and doesn't have a mass industry. That said, (and I mean this as a good thing) it can't get much worse :) Like, there is nothing driving people away from the area, and the community supports itself well. This will likely never become a high-cost area, and I wouldn't assume appreciation any more than the rate of inflation. 

Contractors can also be a little tough to find (I've got a post on this coming out tomorrow) but not impossible. 

There are also no real great property managers that I've found. 

That said, the cash flow is definitely here. IF you know what you are doing. The CapEx will kill you more than anything else, so be sure to budget for that. Like, most homes are 80 years old, so pipes break, insulation is sparse, and it rains... a LOT.

I sound pretty negative on Grays Harbor investing, but I don't mean to. I actually love investing here, but I've spent the last 8 years figuring out how to make things work well. It might be a bit of a learning curve for an out-of-state investor. So if you decide to pursue Grays Harbor let me know and I'm happy to offer any insight I can and share contractors, neighborhoods, etc. 

Oh... and Ocean Shores is an entirely different beast. They got hit hard there in the real estate collapse, but people DO buy there. I sometimes think of buying properties there for the appreciation aspect, but I haven't had the guts yet :)

And @Jay Hinrichs- you should fly up to the airport in Hoquiam sometime. I'll take you out to lunch :) 

[Jay Hinrichs]

@Brandon Turner

   Deal always nice to have someone you know pick you up at these smaller airports  :)

is the restaurant on the field still in operation it was pretty good in the day.

I think this is or is close to my 4,000 post in less than 13 months.. do I get a badge or anything for that... Plus not one of my posts is a welcome just to add volume to my post numbers like some of the others do  LOL....

[Sarah Becker]

Thanks a Bunch @Brandon Turner the lack of contractors and property managers could be a big problem for me. I do have a homeowner client that Is retiring and looking to buy in ocean shores. I am listing their home here in CA on Wed. and then they are planning getting serious about looking. I have spoke to few agents but I'm not sure they meet my (admittedly high standard) so if you have an agent that you know is really good in the area message me let me know. I can put up with an "okay agent" here and there for a good deal myself but my clients need the best. :) of course... that's what they are used to... uhhem.... no self promation here! LOL

I appreciate everyone's feedback about the area. I'm still unsure. Is there much of a vacation rental market in ocean shores?

[Jay Hinrichs]

@Sarah Becker

  not to be self serving but I am building new construction in Seaside OR.. right now your clients could pick finishs and the homes I am building have 270 degree views are above the tsunami zone ( which is sought after)..   :)  just a shameless plug for a little ole builder developer here in Orygun

[Sarah Becker]

let's talk @Jay Hinrichs send me some info and I will gladly discuss with them when we meet this week. :)

[Jay Hinrichs]

@Sarah Becker

  email coming your way.. I have 3 going sold one today !!! .. one more lot to start then I have the option to build out the remaining 10 lots in this sub.

[Mike R.]

we owed a lot (other side of street from ocean) in ocean shores for a few years and ever built.  i would stay away from the area.  Why?  1) the city is not very attractive (disjointed development, only one grocery store, cheap retail offerings, etc) 2) they continue to allow driving on the beaches and the rednecks/kids drive crazy so you really have to watch out especially with small kids, 3) during the summer season they allow horse riding on the beach and you will see several "companies' with trailers of horses for rent.  however, they don't require these companies to clean up the "messes" that horses naturally create so the beaches can have a fair amount of horse crap…not nice.  4) the ocean is always cold in WA and the ripe tides are constant which leads to a few deaths every year.  all these issues  leads us to avoid the area because we do not think it makes for attractive investment for renters or retirees.

[Stephen Schaefer]

So I'm bringing this back up, because there's not a lot of talk about Ocean Shores.

@Sarah Becker Did you figure anything out about this area?

My wife and I want to move back to WA, specifically the Ocean Shores area, it may include up the coast to MoClips, or Grays Harbor/Aberdeen to start, but definitely that area. The reasons why not to invest, is in part a reason why I personally want to live up there. It won't grow! Tired of people lol. 

But, the market is super cheap, I've been looking at cheap houses in Aberdeen, cheap Ocean Shores houses, could be good seasonal rentals in the VRBO market. And if there is not a good selection of property managers, well this may be good news for someone who is interested in filling that void.

I'm getting read to sell here and move up that way. But the plan is to rent for 6mo or so to scope it out. Yup, I miss the 9mo drizzle, the cool temps, and the most perfect 3 summer months anywhere.

[Matt Gragg]

If you buy a home in Aberdeen or Hoquiam in the floodplain and want to improve the property more than 45% of the assessed value you will have to lift it out of the flood plain and install a new foundation.

Ocean Shores has costs like a HOA to live in the town, however, there are great deals and rehab properties to be had in Ocean Shores and further north up the coast as well.

Another option if planning to invest in the area would be to rent the property out. I think HUD pays $979.00 a month for a 3 bedroom in that area or close by.

[Troy Fisher]

I've been on the hunt to purchase a campground in  Ocean Shores/Ocean City, and was disappointed when I talked to the owner at Screaming Eagle a couple of years ago.  He was going to do a flip but decided to hold on to it. I think there are some interesting opportunities headed north toward Copalis, and drove the town a little bit in July, but I tend to think of it as more of VRBO then long term rentals.  And in Ocean Shores they killed that market a bunch of years ago.

[Joseph Quarto]

Hi All,

Have been reading the posts about Grays harbor & investing.  I live PT(about 9 years) in OS, so I feel pretty qualified to talk about it.  Gharbor & OS are 2 different animals.  GH is still pretty depressed in most areas.  But OS is basically a middle to slightly upper middle class community of retirees(lots military) & vacation get away homes.  The market was quite depressed from foreclosures due to ARMs on 2nd homes, etc.  But it has been coming back pretty strong this year.  We have a great community center, Lakes, Canals, convention center, Fire/Police/Library food, POffice, Golf Course, grocery store, shops & of course beaches.  

Great community, quiet, lots of tourists, lots of stormy weather (especially in winter), yet only 1 1/2 hours to Olympia - 2 1/2 to Seattle.

Most of the forclosures left are in pretty bad condition.  A few deals left, but everything else is pretty much priced right.

For instance, We are looking to sell our house to move closer to grandkids.  So our 3 bed/2 ba. (newer roof, WH,) close to everything while protected from strong winds on the beach is listed at $165k.  Not much left in the price range in this condition. Also the lot next door I own will sell with it as a package.

Any interest OR just further questions about GH or Ocean Shores, just drop a note.

Later

Joseph Q   

[Joseph Quarto]

Hi All,

Have been reading the posts about Grays harbor & investing.  I live PT(about 9 years) in OS, so I feel pretty qualified to talk about it.  Gharbor & OS are 2 different animals.  GH is still pretty depressed in most areas.  But OS is basically a middle to slightly upper middle class community of retirees(lots military) & vacation get away homes.  The market was quite depressed from foreclosures due to ARMs on 2nd homes, etc.  But it has been coming back pretty strong this year.  We have a great community center, Lakes, Canals, convention center, Fire/Police/Library food, POffice, Golf Course, grocery store, shops & of course beaches.  

Great community, quiet, lots of tourists, lots of stormy weather (especially in winter), yet only 1 1/2 hours to Olympia - 2 1/2 to Seattle.

Most of the forclosures left are in pretty bad condition.  A few deals left, but everything else is pretty much priced right.

For instance, We are looking to sell our house to move closer to grandkids.  So our 3 bed/2 ba. (newer roof, WH,) close to everything while protected from strong winds on the beach is listed at $165k.  Not much left in the price range in this condition. Also the lot next door I own will sell with it as a package.

Any interest OR just further questions about GH or Ocean Shores, just drop a note.

Later

Joseph Q   

[Joseph Quarto]

Sarah,

Jeff Daniel is a good RE agent in Ocean shores & surrounding areas.  And the little restaurant next to the Hoaquim Airport has closed, sadly;  the food there was good.

JQ

[Ruth Bayang]

@Brandon Turner Trying to help a friend sell a multi-family (fourplex) in Hoquiam. She had a rehab done on it and recently had it appraised for $260k... which seems extremely high to me for that area. NOI is $19240. Cap rate 7.38% (which seems low)

Also, I got a lead via marketing of a man who owns a home free and clear in Aberdeen. It's huge (4400 sq ft) and is historical (http://www.co.grays-harbor.wa.us/gh_Parcel/Search/...) Very well maintained. Willing to seller finance if we can agree on terms. But not sure what to do with it beyond that.

Thoughts? I don't know the Grays Harbor market very well and it sounds like you do :)

[Brandon Turner]

Hey @Ruth Bayang - Yeah, Grays Harbor is interesting. $260k does seem crazy high for an appraisal. I'd likely never pay more than $100k for a 4-plex in Hoquiam :) But maybe it's special? I have a 5-plex, noi of 28,000 - recently appraised for $150,000. And yeah, typical caps around here of 8%-11%. But very few people pay that... most investors in this area are looking for REALLY good deals. 

And the house-  I know this one. Big, house. Not exactly sure how you'd do anything with that. Don't they want a million bucks?

[Ruth Bayang]

@Brandon Turner Lol. I'm sure he wouldn't refuse a million bucks. Owner thinks it's worth $399k but knows he can't sell it for that price. Will take a $300k cash offer. But then what? Rent it out? Lease option? Sounds like a perfect set up to rent out each level (each has bedrooms and bathrooms).. but it's zoned single family.

[Ruth Bayang]

Originally posted by @Brandon Turner:

260k does seem crazy high for an appraisal. I'd likely never pay more than $100k for a 4-plex in Hoquiam :) But maybe it's special?

Nope. Nothing special about it.

[Troy Fisher]

I've got some beads on a couple of commercial properties out in Hoquiam.

Pre-Approved for 502 use. Could be the next major industry in that area.

[Ruth Bayang]

Originally posted by @Troy Fisher:

I've got some beads on a couple of commercial properties out in Hoquiam.

Pre-Approved for 502 use. Could be the next major industry in that area.

 502 as in marijuana?

[Troy Fisher]

Yup.  I suspect that a lot of unused land/agriculture and commercial properties in Gray Harbor are going to be converted into 502 use for growing and processing.  Grays Harbor G5 zoning has been updated to include 502 use, so there's that.

[Brian Camp]

@Sarah Becker - Back to Ocean Shores. I bought a lot on Sandune Dr (which I still own) about 10-ish years age. I originally bought it as a get away from Seattle that I planned to eventually build on but I never did. Spending time there throughout the years I have also toyed with the coming up with an investment angle for the town. But no success yet, so I am very interested in the conversation.

One FYI, back after I bought there was a national real estate infomercial company that sold a bunch of undeveloped lots to out of state owners on contract. I have watched these out of state owners start dumping their lots, and don't think that process is over yet. The key stat I watch for Ocean Shores is the number of building permits, and according to the town paper that it trending up in 2015.