House hacking to financial freedom in Spokane?

Question

I'm new to bigger pockets but am loving the wealth of information here.  I'm at a turning point in my life right now where I have an opportunity to really set myself up for financial success long term.  I currently like in Sonoma County, CA and am in the process of closing on the sale of my duplex.  I am wanting to leave the area as I can not afford a life I enjoy here.  I inherited my duplex from my mother and want to create something good for myself with her legacy.  I have been considering my options in terms of investment with my proceeds which will allow me to buy something outright elsewhere.  I have always loved Washington and have some friends that live in Spokane and love it.  They say that the city is really in a state of revitalization.  I'm thinking of buying a multi-family property initially and hopefully additional properties over time.  I'm wondering what your thoughts are as to investing in real estate in Spokane and what you would suggest as a jumping off budget in terms of a first property.  I have up to $250000 for a property but would like to find something lower than that for my initial investment property.  I would like to buy my initial property with cash. Does this sound realistic?

Naftali Tolibas · Answer

@Jenny Hartzog

You could totally do that. I’d recommend paying off any debt and as you’ve mentioned straightening out your credit. Then once that’s cleaned out, buy undervalued properties cash, rehab, refinance and repeat

Dan G. · Answer

FYI: Spokane is cold in the winter.  I grew up here and am used to it. But for some folks it’s a big deal.  Right now it’s like 5 degrees outside? Spokane definitely has some BRRR going on.

I feel like there are a tremendous amount of opportunities here.  The town is getting revitalized; we still have a lot of room for growth though.

About your credit score: I have a couple tricks I can share with you.  I got mine up from 0 to 780 in a year.  This is how.  Got meet your personal banker, and explain your goals and ask how they can help you.  My personal banker recommended me set up 2 separate lines of credit: revolving and non-revolving from my local credit union.  I gave the bank $2k as collateral, and got 2 lines of credit for a year.   I opened a separate account that had the funds to pay it off preload and set on auto pay so that each month payments where made without me touching it.  The other line was like a credit card,  I used it for my regular needs, and paid it off right away every month.   12 Months latter $80 in loan document fees and a 780 BAM.

Hopefully that helps! I side with the other comment about the financing.  Although you could buy it all cash, and then pull out like 70% of the equity for your next project? Investment?

PM me Ii you need a solid lender, or if you want some sweet deals. I wholesale a handful every month.

Naftali Tolibas · Answer

Hey Jenny,

Welcome to BP! And congrats on taking action!

IMO, you should use that money and leverage it out. Here are a possible option:

Use the BRRRR strategy, buy value add Multi-Family, Rehab them, Refinance out, and Repeat. This strategy has been used over and over again, and has put many people on an exponential growth towards financial freedom. Because you have so much capital, you could do multiple projects at once and acquire many units.

I'd start off with a small project, learn the ropes, and get opinions from local investors. But, once you get the hang of things, the sky's the limit from there. Goodluck!

David Clinton III · Answer

@Jenny Hartzog, I agree. You can spread that out and get a lot accomplished. You could buy a duplex outright with half, and use the other half in multiple places. Or house hack a 4-plex with the minimum down, and really stretch the rest. I’d be happy to chat more, as somebody who knows the area and the numbers here. PM me if interested!

Jacob Evans · Answer

@Jenny Hartzog

I concur with Naftalia's plan, above.

Dan is correct about the winters. It gets REALLY cold, but a nice set of winter gear and you should be fine. I moved over from the Seattle area 10 years ago and the first few winters were SHOCKING, but I've adjusted well.

If you'd like to start peaking at investment deals in Spokane please pm your email and I'll forward along our wholesale deals as they come up.

Cheers!

~ Happy Hunting.

Jenny Hartzog · Answer

thanks for the advice. My intention of paying cash for at least my initial property is that I am in the process of raising my credit score. When I inherited my property i was not in a financial position where I could responsibilities afford to own the property and because I was lost in grief I wasn’t capable at the time to put the energy into learning and working to improve my situation. In October of last year when my home almost burned down in the wine country fires, I realized it was time for me to change my story and my relationship with money and my financial future. I have worked hard to get my credit score up from 444 to 597 and will continue to work until I get it to a positive level. I guess paying cash has to do with feeling like I won’t qualify for the financing I wouldn’t need. Also I would like to have the peace of mind knowing I have at least one property that I own out right, considering I’m new to the idea of real estate investing.  I realize that there are many ways to do this and being a newbie to this I a am open  advice and suggestions of what makes the most sense going forward. Thanks for your time.

Jay Helms · Answer

@Jenny Hartzog - what are your goals? I’m curious on why you want to pay cash for a property. When you run the #s paying all cash, what does that do to your cash on cash return metric?

Steven Berro · Answer

Congrats Jenny!

My wife and I family moved our family from So. Cal. to Spokane about nine months ago.  Absolutely love it.  You are in a really good position with that amount of cash.  Take advantage of Bigger Pockets and start developing relationships up here.  I'm a complete newby and have learned quite a lot simply by reaching out to experienced investors up here.

All the best,

Steve

House hacking to financial freedom in Spokane?

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