Hi BiggerPockets, Newbie from Seattle here to learn REI

[Amit Ratwani]

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.

[Michael Haas]

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.