Cash Flow or Appreciation in Seattle Area

[Ted Klein]

Looking for some advice on the Seattle area market.

Since I am hoping to acquire multiple properties, should I start in a lower priced local market and acquire a couple of properties that cash flow good and let them season so that the income can be counted on my W2 or should I look at the more expensive properties that will cash flow and hope for the appreciation?

I have been looking in the Puyallup area for small MF properties and find that they can cash flow and have a decent COC return, I am however, concerned about the appreciation.

My agent has mentioned that properties in that area will not appreciate and that I will have more tenant problems.  She is recommending Seattle / King County area since the rental rates are much higher and having a much better chance of appreciation which I agree on both.

Problem I have is, with the values already so high in King County, it will limit the number of properties I can acquire given the impact of the debt to income ratio after purchasing such a high priced property.

What are the opinions on this and are there any recommendations on financing options to acquire additional properties once this occurs? Or should I stick with the lower priced properties to get started again?