Seller or Owner Financing

Seattle, WA · Member since 2019 · 12 posts · 3 votes

Hey folks,

Im a newbie investor who isn't looking to make my first investment out of state. Seattle is my home for now and where I want to do business but it's intimidating and expensive. I've decided I would like to buy my first home here and home hack it for awhile while I continue to learn about Real Estate and what kind of investor I want to be.

Seattle isn't really friendly to those who cant purchase with an all cash offer so I am interested in finding other creative approaches to this problem. I'd like to hear if anyone has had any luck with seller financing in this area? Is this a viable strategy or am I out of my league?

Please link articles that could help me outline the positive talking points around this option. How does this ultimately benefit the seller? How can I convince them to agree to this?

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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

With 3% down you're looking at homes in the mid-400s; hard to find in Beacon Hill-Mt Baker-Columbia City, but lots of good options around Graham Street (where the Hillman City infill lightrail station will go) and Rainier Beach lightrail. Both would have dead-simple commutes into Pioneer Square.

Since you're going conventional and want to house hack I would be looking for a dated but livable upstairs with 2+ beds and an unfinished basement. 7 ft ceilings ideal, but 6'4"+ acceptable. Bonus if there's already plumbing and either has a waste pump or a low enough waste line that it doesn't need one. Pay attention to egress windows - 99% of the houses won't have them, so you should be looking at how dificult they will be to install. Here in Seattle they're run you about $5k a pop all in, but I've also installed them myself for $500 materials. Definitely hard work though.

Close on it, get that roomate in upstairs for cashflow, then start pouring nights and weekends into that basement. I've also got some real cheap labor contacts if you have a bit of cash left over and want to expedite getting renters in the basement.

Lots of options- good luck and PM me if you need anything! We're converts- we house hacked our way to 4 Seattle properties and think its a incredible way to build wealth.

[email protected]408-439-7873

HouseHack Seattle | Michael Haas & Team572 Reviews

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Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
6y
Keyana – thanks for the post …its not accurate that the Seattle area is unfriendly to non cash buyers ….if you are pre approved and have your ducks lined up , getting an offer accepted in the King county is easily accomplish-able ……..if you are not able to be pre approved – then this is when the alternative / Creative methods might be more applicable …as far as locating seller financing for a single family property int eh King/ Pierce/ Snoh county area – this is very unlikely to be an option
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Jake Alger
Real Estate Broker · Bellevue, WA · Member since 2017 · 172 posts · 107 votes
6y
Hi @Keyana Buckner,

Our market can definitely be intimidating to people as you mentioned and in certain areas, quite expensive. A house hack is a great option for helping keep your monthly costs low (if you decided to rent rooms) or for forcing appreciation by doing some updates over time. It's a strategy I've employed with every primary residence I've owned in the last 6 years.

I agree with @Dave Skow. The Seattle market isn't unfriendly to non-cash buyers. The majority of people out there looking to buy a home don't have the cash reserves in order to purchase a home outright. As Dave mentioned, having your ducks in a row and making sure you're pre-approved, is key. Offers that come in without a pre-approval letter in hand won't be looked at seriously. The seller won't take the risk (and shouldn't), on accepting an offer (taking their house off the market), while waiting to see if someone will be approved for a loan to purchase their home. Thus, finding a credible lender and chatting with them about a pre-qualification / pre-approval is an absolute necessity.
Finding a seller who is willing to offer seller financing, is going to be a tough find. It's not impossible, but highly, highly unlikely. Most people are looking to cash out, move funds and may need the funds to qualify for their next home. With interest rates as low as they are now, it would be adverse to accept a higher interest rate that usually comes with owner financing as well.
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Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y
Well How much do you actually have $$ . Your going to need to entice the sellers do do this so you need a good down payment . You Very likely won’t be buying with no money down despite what books all like to say
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Keyana Buckner
OP
Seattle, WA · Member since 2019 · 12 posts · 3 votes
6y
@Dave Skow @Jake Alger Thanks for the feedback. This is good to know. I guess I was looking for an alternative to regular financing because I don't have a ton of capital to qualify for homes in the area. I'd have to look in the surrounding areas like Tacoma and so on to get something big enough to house hack. I don't really want to live that far out since I work in Pioneer square and my partner owns her business in Seward Park.

@Dennis M. I have 15k at the moment. Just trying to figure out how to get something for myself with a little extra space to rent out as well to supplement the mortgage payment.
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Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
6y
there are conventional loans program that allow a 3% down payment and FHA loans allow as little as 3% down payment
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Derek Bunyard
Real Estate Broker · Member since 2017 · 5 posts · 1 vote
6y
@Keyana Buckner I’ve purchased 3 properties in Kirkland, Redmond, and Woodinville using Seller Financing. Sellers who are willing to carry paper in the Greater Seattle area rare, but they're out there. Ask a title rep to give you a list of properties in your desired area(s) that do not have a mortgage. Get the list and go door-knocking or send letters to the owners to let them know you’re a ready and willing buyer.
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Keyana Buckner
OP
Seattle, WA · Member since 2019 · 12 posts · 3 votes
6y
@Derek Bunyard Good info! Thank you!!
0 Reply
Doug Sipes
Real Estate Broker · Seattle · Member since 2019 · 9 posts · 3 votes
6y
Hi Keyana,
Ditto to the necessity to be at least pre-approved if you're planning on buying from the retail market. Otherwise I'd add to hit up FSBO's, Make Me Move peeps, absentee-owners (title rep can help with that), smaller landlords that post rentals on Craigslist.... A great scenario would be an absentee-owner with no mortgage. There are a number of sources/avenues but it's going to take work. Phone calls, letters, door knocking, etc.
Good luck and I'm always happy to help if I can!
1 Reply
Keyana Buckner
OP
Seattle, WA · Member since 2019 · 12 posts · 3 votes
6y
@Doug Sipes yea I hear that. I plan on getting pre-approved for sure, but with 15k in cash and even with an FHA loan and putting 3.5% down. I still don't qualify for much in the Seattle area. My curiosity is still piqued at the thought of finding a seller financing set up. I am not above some good old hard work with letters, calls and door knocking. :)
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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
6y
With 3% down you're looking at homes in the mid-400s; hard to find in Beacon Hill-Mt Baker-Columbia City, but lots of good options around Graham Street (where the Hillman City infill lightrail station will go) and Rainier Beach lightrail. Both would have dead-simple commutes into Pioneer Square.

Since you're going conventional and want to house hack I would be looking for a dated but livable upstairs with 2+ beds and an unfinished basement. 7 ft ceilings ideal, but 6'4"+ acceptable. Bonus if there's already plumbing and either has a waste pump or a low enough waste line that it doesn't need one. Pay attention to egress windows - 99% of the houses won't have them, so you should be looking at how dificult they will be to install. Here in Seattle they're run you about $5k a pop all in, but I've also installed them myself for $500 materials. Definitely hard work though.

Close on it, get that roomate in upstairs for cashflow, then start pouring nights and weekends into that basement. I've also got some real cheap labor contacts if you have a bit of cash left over and want to expedite getting renters in the basement.

Lots of options- good luck and PM me if you need anything! We're converts- we house hacked our way to 4 Seattle properties and think its a incredible way to build wealth.
[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
Website View Page
5 Reply
Keyana Buckner
OP
Seattle, WA · Member since 2019 · 12 posts · 3 votes
6y
@Michael Haas this information is invaluable! Thank you! PM'ing you with a few questions.
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