Buying in Seattle

[Max Guerrero]

Hey guys. Me and my fiancé decided we liked Seattle enough to stay and buy a house. Our plan is to buy a SFH with a MIL or potential for MIL, house hack and live in the smaller unit and repeat. We want to buy and hold. We have found houses that cash flow in the outlying cities such as Kent, SEATAC and Des Moines but we would need to put 10k in to make a kitchen downstairs. Not a problem because we know we would be adding equity to the house. If we moved out we would be cash flowing around $100 with a PM or $400 with out. The latest house we found is closer to Seattle, did not require any work and was ready to move in on day 1 and rent out on day 2. This house, however, would cash flow around -$400 with a PM or -$100 without if we were to move out and rent it out completely. Out Realtor, who has years of experience in the Seattle market, has done flips and has had a handful of rental properties tells us that we should take into account the amount of appreciation that the house will acquire in the next couple of years, being so close to Seattle compared to the others. Everything I've ever heard says not to play the appreciation game and speculate. Is it still speculating if it's in the Seattle market? The way I see it, I would be getting positive cash flow from the first property from day one but the house would not appreciate as fast. The second would take a couple of years to cash flow positive but would appreciate much faster.

What are you guys and gals take on this?

[Ryland Taniguchi]

Being through two crashes here in Seattle, betting on appreciation in Kent, Seatac and Des Moines is very risky in my opinion. In those areas, I would only buy if 1% rule cash flow. Also, I would be careful getting your investment advise from a real estate agent. They look at the market values today but you want to also look at the worse case market values when a market crash occurs.