First-Time Buyer in Seattle Looking for Advice

[Michael Spearman]

Hi BP, 

I'm new to real estate investing and I'm getting ready to buy my first property, however I'm looking for some advice on my plan before I start seriously looking for my first deal. l've decided to look for my first property in the Columbia City / Beacon Hill area near lightrail stations because of the easy commute to the Eastside where I work and the relatively lower prices. 

My budget is around $500k-$600k and I plan to use this property as my primary residence while using the extra room(s) as a VR. I've chosen VR as I believe that, even though it is extra work, it will allow me to generate a higher monthly income to offset my mortgage. Because of my plan for VR I'm mostly looking at:

1. No HOA / apartments.

2. Separate entrance for guests.

3. Near LightRail stations. 

Ultimately my end goal is to own numerous properties and gain financial independence through the cash flow. I read about many people on this forum who are able to do this but I don't see how it's possible in Seattle given how hard it is to find positive CF.

Questions for the community: 

1. What are peoples thoughts on this VR plan? Are VRs actually more profitable that traditional rentals in Seattle? What else should I be looking for in a VR home?

2. Given my preferences, who's a good real estate agent that would show me good deals when they arise. 

3. I'm only 24 but I'm making pretty good money working in tech and have a +740 credit score so and I would like to know if I can get approved for ~20% down payment. Any recommended financial advisors that could assess how I'm looking right now. 

4. I'd love to chat with anyone who made their first deal while in a similar position as me (i.e. house hacking, early 20's, expensive market, ~550k budget, etc). What contributed most to a successful first deal? What were the pitfalls? Coffee's on me!

5. This is my first post here but I've been reading this forum for a while and it's incredibly helpful. What are the best ways for someone with no real estate investment experience to still provide value here?

Thanks.

[Jake Alger]

Hi @Michael Spearman,

First, welcome to the BP community!  You'll find a lot of great information here as you progress through your real estate investing career.

Second, I'll kind of go down your list and try to answer some of the questions you posted.

1. VR's can be a really good source of income, however, managing them can be a bit more than some people are willing to commit to. Knowing that you will have constant (hopefully) in-and-out, short term tenants, it can be mind boggling. As you touched on, you're going to want to find something without an HOA to be safest. Most HOA's have rules against "short-term rentals", typically anything less than 6 months or a year.

2. I'm an agent on the east side and I service the entire region.  I was very similarly in your shoes a while ago and also have a background in tech.  I'd be happy to chat further.

3. If you have a good credit score, income and assets, you'll likely qualify for lower than a 20% down payment. However, you'd then have to pay PMI (Private Mortgage Insurance). There's a trade-off for doing larger and smaller down payments, which I'd be happy to explain. In terms of lenders, I can recommend a few, especially since you're in tech, who cater towards your type of income and ambition.

4. I'll send you a PM.

5. You're right, BP is incredibly helpful and the combined knowledge of everyone here, whether new to real estate, or a seasoned veteran, allows for many thoughtful experiences and problem solving ideas to be shared.  You can provide value by simply sharing how you feel about certain posts, deals people are posting, or asking questions you have.  Being involved in any way possible will allow you to network, grow and learn and vice versa.

I hope some of these answers were helpful.  Definitely feel free to reach out as I'd love to chat with you.

- Jake