Guidance on selecting first investment home

[Pradeep Tiwari]

I live in a rented Bellevue WA home, my family is still small and house is rented below market as of now. I want to buy/Invest in Real estate, my problem is – If I buy sometime to live myself then it has to pass in my criteria, near to My office, near to My friends place etc, which makes any candidate home way more expensive.

I am thinking of buying an investment property while living in a rented home.. again Seattle market is very hot (the way I see it ) because rent you get it lesser than your monthly expense for that house. I am evaluating to buy something that is far but big and cheap (http://www.zillow.com/homedetails/1105-Lafayette-St-Aberdeen-WA-98520/88020901_zpid/?utm_source=email&utm_medium=email&utm_campaign=emo-sendtofriend-hdp&rtoken=5cf92d81-5c0c-471b-ab46-c7e5df625bf5~X1-ZU10afpycosnksp_4wzn7) I did not run the numbers yet but I mean something similar to this..

On the other hand I think to buy a small condo in the heart of Seattle (http://www.zillow.com/homedetails/1101-E-Terrace-St-APT-401-Seattle-WA-98122/59699632_zpid/?utm_source=email&utm_medium=email&utm_campaign=emo-sendtofriend-hdp)

Any suggestions, guidance, feedback, strategies etc ? oh yes – I am newbie if it was not very apparent..  

[Rudy Manna]

@Pradeep Tiwari - not to worry. As they say " Deals of a lifetime comes every day".

15% Cash on Cash/ 25% IRR are pretty achievable south-side Tacoma, Lakewood, etc. You may also consider houses that require some renovation, that way you can generate some instant equity. There are several other strategies you may consider (BRRRR, subdivision etc.) but acquiring a simple cash flow property in Tacoma can be a good first step. Rental market in Tacoma is really hot with huge demand, and very little upcoming construction. Price appreciation outlook is also solid.

As a alternative to Tacoma you can also consider Bremerton, Marysville/Everett. Though any of those places cash flow will be lower.

Personally I think, condos in Seattle, or for that matter condos anywhere are bad investment. There can be exceptions (like this year we had a stellar condo price growth), but most of the time they lag in price appreciation, and in case of downturn first one to get hit.

I will stay away from Aberdeen or rural WA, unless you really know your stuff. The economy is stagnant, and support stuff such as property management and handyman are not readily available on top of low quality tenants that comes with high churn.