Creative Strategies for Expensive Market

[Manco Snead]

Greetings good people,

I'm hoping to solicit some thoughts and ideas from those more experienced than myself. My scenario: moving to a smallish town in western Washington where the average home price is approx. $360k(Zillow). Real estate values have shot up very quickly, the inventory has shot way down(way down), and there is an extreme rental housing shortage. I want to buy, as I need a place to live, but also as an investment. My rough plan: buy a smallish house that needs some rehabbing and build an ADU on the property(ok in this county). Or separate a one-level into a duplex. Close to zero multifamilies come onto the market. Loan limit: $400K. Cash available: $50k.

The market is pricey and competitive so am looking at how I can see a return. Any thoughts or opinions would be much appreciated.

Thanks!

[Brian G.]

@Jesse Stein better yet purchase a property that already has an ADU. $50k is a pretty tight budget to buy and to develop one yourself. Better to buy a property that has an ADU and pay a higher purchase price to minimize cash out of pocket. Other ideas: buy a large house (5bd+) and rent out the rooms to young professionals or college students, run an Airbnb hustle out of the ADU, or live in the ADU and rent out the main house, etc. buy a value add live in flip.