Hi BiggerPockets, Newbie from Seattle here to learn REI

Member since 2023 · 2 posts · 1 vote

Hi BiggerPockets!

I'm Amit, and I'm based in Seattle, WA. My dad has always been involved in real estate investing, which has helped my family weather multiple financial storms. Now, I want to learn how to invest in real estate and build long-term wealth.

For my first investment, I plan on getting into a small multi-family property (preferably a 4-plex). I've saved up roughly $70,000 for the down payment and rehab. If you could suggest any markets I should consider, that would be very helpful.

I'm excited to join the community and look forward to learning from all of you.

1 Reply

36 views

Most Popular Reply

Michael HaasBusiness Member

Real Estate Agent · Redmond, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 724 posts · 3k+ votes

I'd second @Daniel McDonald, @Amit Ratwani have you considered HouseHacking? Some simple Math:

Lets say you do a Seattle 4plex HouseHack w/ 5% down conventional (a new loan option for multifamily that's better than 3.5% down FHA, just DM me if you want the full rundown on why).

That $70,000 could purchase you a property up to $1,400,000... and to get a 100% ROI on your investment all you need is 5% appreciation on the property. The average appreciation rate in Seattle over the last 40 years has been 5.5%. Cashflow / rents will provide additional ROI but in our experience over a long hold time appreciation will always contribute more to your total ROI than cashflow. Interest rates will also be .25% - 1% lower on an owner occupied property than on a rental property.

Contrast that with buying out of state / non owner occupied properties. That $70,000 now has to go into a 20 - 25% down mortgage, allowing you to purchase a property for $280,000 - $350,000. Now, to see 100% ROI the property would have to appreciate 20 - 25% in value. Cashflow / rents will provide additional ROI but not enough to overshadow the more favorable loan terms and higher value of the househacked property.

This is an oversimplification but I'm sure you get the point! Happy to talk about the strategy more - we're up to 13 properties owned in WA now and wouldn't have been able to scale to that level quickly without househacking.

[email protected]408-439-7873

HouseHack Seattle | Michael Haas & Team572 Reviews

Website View Page

6 Reply

See this reply in the discussion

6 Replies

Jump to latestLatest

Sort by

Daniel McDonald
Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
2y
Hey @Amit Ratwani! If you're based in Seattle could you house hack there? I am sure it's expensive but you need a place to live anyway right? I always encourage people to house hack if they can. I think it's the easiest point of entry for any investor. It's really been a game-changer for me.
2 Reply
Michael HaasBusiness Member
Real Estate Agent · Redmond, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 724 posts · 3k+ votes
2y
I'd second @Daniel McDonald, @Amit Ratwani have you considered HouseHacking? Some simple Math:

Lets say you do a Seattle 4plex HouseHack w/ 5% down conventional (a new loan option for multifamily that's better than 3.5% down FHA, just DM me if you want the full rundown on why).

That $70,000 could purchase you a property up to $1,400,000... and to get a 100% ROI on your investment all you need is 5% appreciation on the property. The average appreciation rate in Seattle over the last 40 years has been 5.5%. Cashflow / rents will provide additional ROI but in our experience over a long hold time appreciation will always contribute more to your total ROI than cashflow. Interest rates will also be .25% - 1% lower on an owner occupied property than on a rental property.

Contrast that with buying out of state / non owner occupied properties. That $70,000 now has to go into a 20 - 25% down mortgage, allowing you to purchase a property for $280,000 - $350,000. Now, to see 100% ROI the property would have to appreciate 20 - 25% in value. Cashflow / rents will provide additional ROI but not enough to overshadow the more favorable loan terms and higher value of the househacked property.

This is an oversimplification but I'm sure you get the point! Happy to talk about the strategy more - we're up to 13 properties owned in WA now and wouldn't have been able to scale to that level quickly without househacking.
[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
Website View Page
6 Reply
Ali Nichols
Investor · Member since 2022 · 235 posts · 127 votes
2y
Hey @Amit Ratwani welcome to BP! Always happy to chat small multi-family strategies.
0 Reply
Julien J.
Investor · CO · Member since 2016 · 757 posts · 1k+ votes
2y
@Amit Ratwani

Welcome!

@Michael Haas very well articulated my exact thoughts. The house hack strategy is a powerful one in the Seattle market. I've used it myself on every property I've lived in and scaled to 10 properties and 14 units.
I used to be diversified in Memphis TN, a cash flow market, but quickly realized to build wealth, the faster strategy was to focus on equity build first. All my holdings are now in WA.
Feel free to reach out, I'm always game to share my experience.
2 Reply
Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
2y
@Amit Ratwani- welome to BP ..is the plan to live in one of the units or will the plan be to rent all the units ? this will make a large difference with the financing options you have . I would recommend getting formally pre approved for whatever scenario you are wanting to persue ....this free process will get you organized / educated and prepared to react whena nd if you locate a property to make an offer on
0 Reply
River SavaPro Member
Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
2y
Hi Amit -Welcome!!
Definitely check out Charlotte, NC. I am somewhat biased, but would be happy to talk about the market there further with you!
[email protected]
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.