I'm Looking for Owner Occupied Home as Investment Opportunities

[Garrick S.]

Hi, all.

I have been trying to buy into this crazy market for the last 3 months with mostly disheartening failures. I first tried to find multi-family properties in the metro area with house hacking potential, but the cash flow is always negative. My next strategy was look for cheap condos that I could live in for the next few years and potentially rent for a profit once I moved, but the bidding wars are taking the sales prices to levels where renting wouldn't be profitable anytime soon. Are there any other owner-occupied opportunities that are available in this market, or should I give up on the idea, continue renting, and invest elsewhere until the market settles down?

[David Sweeney]

Properties can be bought for appreciation, and properties can be bought for cash flow. It depends on your investment strategy, location, and your ability to create value. In some places, you can get both, but I agree it can be difficult. In Seattle, cash flow is tough but the appreciation right now is awesome! You just have to be able to get into the game and stay in. Renting to yourself (house hacking) is definitely a strategy that can help with this.

If you choose to invest outside of Seattle, appreciation will not be as high. However, you can find situations that create cash flow. For example, I have a 10-unit under contract in Longview. I am buying it for $690K, and my financial analysis shows that it will generate $1600-2000/month, depending on expenses. It will appreciate, but not nearly as fast as a property in Seattle. My goal in this transaction is to create value by lowering expenses, improving the property, raising rents to market rate, and to refinance when the time is right. This transaction should allow me to take advantage of both cash flow and appreciation.

I'm also analyzing multi-family properties in Tacoma, University Place, and Lakewood that will both cash flow and appreciate. If anyone needs help locating and analyzing properties, let me know.