Anyone finding deals in or around the Hilltop area?

Question

I'm starting to feel like my husband and I are really late to the party. We have lived in West Seattle for ten years and have accumulated enough savings to buy our first investment property. We have enough of a down payment to go up to $300k, but we were looking to stay in the $200-250k range. We have excellent credit and have already been pre-approved. We have been looking around Hilltop because there are listings in or close to that range and having an old home ourselves we hold a certain love for older homes, but talking to some of the realtors it seems like they are going much higher than listed price? We were told yesterday that a home around L street was listed at $270k and it went for $370k cash. I'm wondering if we should move on to looking out of state even though we'd prefer a rental close to home. For those of you investing in that area or are trying to invest have you seen any deals or is it ultra competitive? We have family just outside of Austin where there are lots of houses in our range and I think that area will continue to rise so we're debating just moving on to looking there.

Steve Abercrombie · Answer

It depends on your investment criteria and strategy. If you are just looking on MLS, I think there are still deals to be had, but they are selling very fast. Most are getting multiple bids at listing. With the amount of cash you have, you could also look off-market. Good deals, off market, seem to go in a matter of hours in Tacoma/Pierce Co. at the moment. My approach is to stick to my numbers and be patient, I have a long-term perspective, and can wait until we crest the peak of this real estate cycle.

You can choose to work with an agent that will write bids for you based on local knowledge and your criteria as soon as they are listed. It's all about getting a decent funnel - you'll bid on a lot of properties before you get one under contract. So long as you have an inspection contingency you have an opportunity to review the property once under contract. If you are paying cash you care in a pretty strong position. You can offer a short inspection and closing period to make the offer more attractive.

There is always an opportunity to reach out via some of the meetups - and try to find someone to partner with on a deal. Plenty of people are getting their hands on BRRR-type properties around Hilltop, so that may be a good ticket.

Personally, I'm starting to look out of state where cashflows are much better; there are strong local economics; and dollars will buy more properties. Also doing so as a hedge from our local market, a consideration of worst-case if we get an earthquake up here.

Dustin Twiggs · Answer

Natalie,

If you're still following this thread... I have lived in Tacoma since Jan 2016. I have a loft down in the financial district that I wish I could rent (rental cap) and I bought that back in June of 2016. Back then I thought by summer of 2017 I'd buy at least 2 more homes on Hilltop as they were around $125-150k each. Then, BOOM the market exploded. However, I don't think Tacoma is done yet.

UW has completely cleaned up the area down by the Swiss. The Brewery district is going through a massive reno as well to the tune of around $85 million I think. There is a GIANT project from a Chinese investment company on Jefferson and 21st that has hundreds of millions being invested into new SFH and retail. It's supposed to end up being similar to U Village.

a new high rise hotel is going in, in the same neighborhood, 25+ stories I believe (Hilton? I can't remember). The crane is already up and moving. Just up a few blocks from there another crane is putting in a large multifamily unit.

Hilltop is now more expensive by far than a year ago but the whole area is just now breaking ground on what we'll see over the next 5 years.

the east side of I5 only a mile or two as the crow flies is probably the next major neighborhood as there is a clean up project there a well.

Lastly, I believe the City has yet ANOTHER major clean up project going in right next to the mall that will consume a couple city blocks, create a new greenbelt and park, etc.

Ruston condos are selling for $1m+, and Proctor homes seem to start around $450k for the most part. There is one right now listed at $275 that would be a renovation project.

Anyways, best of luck to you. I've been watching Tacoma closely and am thinking of selling my loft so I can move my money into the next investment opportunity as well.

Natalie Novak · Answer

Karl,

Was it a recent article? I can't seem to find it if you could post the link. I lived in S Florida for 17 years and I've thought about that area also, but I just don't want to deal with another hurricane again. I went through so many that I think I burned myself out on the area.

Adrian Chu · Answer

Hilltop has changed over the past few years.  Around 4-5 years ago a friend of mine worked at St. Joe's Hospital.  She told me about an incident where someone got shot at the gas station across the street and walked himself to the ER.   But now Hilltop is like the hip Central District of Tacoma.

That being said, now that the market is softening, there are lots more deals available.

Dave Skow · Answer

Kitsap / Mason county  not too far from W seattle  ……..another idea that might work with your price range is the local college towns ( Bellingham / Spokane . Cheney / Ellensburg )  there are homes available  below your price point that can  cash flow incredibly well if you can target the  college rental demogarophic

Bettina F. · Answer

I left Tacoma in 2013, so my info is dated.  However, I lived in NE Tacoma for decades.  There is a little pocket of 30 or so SFHs (non view property) just north of the golf course.  The houses are smaller and older, but would be perfect rentals.  They would be in the NE Tacoma Elementary area.

Sourav Roy · Answer

In the same boat. Recently put in an offer on a condo in Everett. Ended up with 17 offers!!! I'm exploring options out of state. Any recommendations? Anyone using companies like Roofstock etc.?

Kevin Scott · Answer

I just passed on a deal on l st a wholesaler tied up after I gave the owner an offer and told him to see if the wholesaler (or other investor) could offer more.  He offered 5k less and the guy signed after feeling forced even though i told him what id pay was higher.  Lot of shady stuff the wholesaler did including threatening to sue the owner, but bottom line deals are found in the area.

The one your talking about was probably a duplex my team was involved in.  We have quite a few pop up here and there so let me know if you want to chat about what in particular you are looking for.

Karl Krauskopf · Answer

@Natalie Novak we are looking on the south end of Lake WA down to Tacoma, and north of Lynwood to Marysville.  We live in Shoreline so both are relatively easy driving.  We'll also likely use a property management which reduces the need to be nearby.  As such, we're expanding our search range to include more of Pierce county, Spokane (though this is very new concept I've been playing with), and out-of-state where we grew up in Central and South Florida.

I just read a great report from FannieMae on Multi Family investing in Austin, TX.  You should search for it and give it a read (15 min max).

Anyone finding deals in or around the Hilltop area?

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