New to investing, Seattle area

[Katie Ann Mangan]

Hello! My husband and I are new to real estate investing and looking to do our first deal as a multi family house hack in north Seattle. Would love recommendations for a lender and agent that knows the area well! Would also love to connect with anyone other investors in the area!

[Michael Haas]

Hey @Katie Ann Mangan - Welcome way to take the first step towards getting started!

I agree, house-hacking with low down-payment loans is the best way to get started in this market. We've done 4 house hacks in Seattle, cashing out of one property and holding the other 3 as long term rentals. Although there are always bumps in the road we've had good success with the strategy and seen many clients and friends do the same.

Just a couple tips for you as you get started:

1. If you're looking in Seattle proper, you will have the option of going with a single family w/ an ADU in addition to a househack. Although ADU's are legal in Seattle, most of them currently in operation have been built without permits, so you'll always want to check the city records to verify. Whether you'd consider moving forward on something with un-permitted work depends a lot on what you plan to do with the property and your risk tolerance as an investor.

2. If you get a single family with ADU you can go conventional with a low downpayment, but on a true multifamily property you'll want to go FHA if you want a lower down-payment. Something to be aware of: way back before 2013 FHA allowed the mortgage insurance to be cancelled when the mortgage insurance has been paid for 5 years and the loan balance reached 78% of the original purchase price or value of the home, but since 2014 new FHA loans haven't had such good terms. At 90% loan-to-value or less (more than 10% down), they have the monthly mortgage insurance premium payable for at least 11 years. New loans at more than 90% loan-to-value (less than 10% down), have he monthly mortgage insurance will be payable for the life of the loan. OUCH. Of course you can refinance, but with rates at an all-time-low now there's a good chance your rate will go up a bit when you do.

Happy to chat in more detail on the phone or over a coffee about investing / house-hacking in Seattle anytime. Cheers!