How to find properties in WA state for BRRR under 260k? TIA.

Question

Any any how yo find properties in Washington state?. What’s your strategy?

Curtis Bidwell · Answer

Hi @Freddy Rondon. Welcome to BP!
Like any other good investor you need to be able to spot the anomaly in the marketplace. There are deals if you know the market. Study the values/ neighborhoods/ rent rates, etc. What may look like a typical price on a home may be a great value for that particular neighborhood (or vice-versa!).

And as @Jake DeAtley said, Network consistently!  The more that people know what your looking for, the more likely you will find it.

Finally, Be Ready To Act When the Opportunity Strikes!  Have your money ready (down payment, financing, partners, etc).  The deal will arrive when you're ready.  If you're not ready when the deal shows up it will pass you by!

EXAMPLE:  Market Knowledge, Networking, Preparedness:  We are closing on a 2250sf rambler tomorrow in Olympia for $100k.  We'll put in another $100k and it will value at $360k.  Rent will be $2250/mo.  HOW?  I was sitting in Starbucks when one of my tenants walked in and complained he might not have enough money for rent AND property taxes too.  PROPERTY TAX?!?!? Yes, he had inherited a home from his father that was in severe disrepair and couldn't see his way through it.  He offered it to me for $100k.  I knew the area, the values (ARV and market rent), and I was ready to act -before he responded to someone's yellow letter.  I drew up an owner contract for 25% down, he carries the note for 5 years at 5%.  Our exit plan is to rent it for 1 cycle and then sell (long term capital gain).  I already have a prospect for tenant/purchaser (neighbor's family: still networking! Getting to know the neighbor while doing some preliminary inspection work).

Look forward to seeing your next deal!

Justin Frank · Answer

@Freddy Rondon

Depending on what part of Washington state you are looking this can be a tough task. Homes less than $400k are still selling very quickly here. Most of western Washington is still priced very high but it is still very possible to find great deals. We are starting a project in Tacoma that we picked up for $170k. Crazy to think that is a good deal huh. I would find a good agent, network with flippers and REI groups, send out off market letters, and drive for dollars. That will be a good start.

Jake DeAtley · Answer

consistency and networking!

Tyler Blackwell · Answer

@Zachary Schnautz I am familiar with the property you're talking about. This property goes to show how tight the market is. Their estimate for rehab was low (their flooring replacement budget was just slightly more than $1/ft, for example), but even if you sold for $275k with $20k in repairs, buying at $217k means you net a whopping $10,000 after realtor fees, excise tax, and closing costs, and that's assuming you have your own cash to make that work and you're not using hard money...I'm not sure who's buying this? Maybe a contractor married to a real estate agent? Margins are thin...

Zachary Schnautz · Answer

Hey Freddy,

More information about what your goals/strategies, how you plan to finance these deals, and where you're looking will definitely be helpful. Deals under >$260k exist in the Seattle metro areas but you likely won't find them on the MLS and these will almost always be full gut projects. These are also projects that will likely require you to be a cash buyer since your competition will almost always be cash buyers as well.

Like others have said, the most important part is to talk to people. You can cut out the middle man and market directly to potential sellers or use a wholesaler and pay their assignment fee for the convenience they provide if your time is better spent elsewhere.

I hope that helps, and let me know if you want their information!

Kevin Romines · Answer

Do a search for properties that have been on the market for a long period of time. There tends to be motivation with those sellers. Have your agent pull records of properties that were listed for a long period of time and then pulled off the market. There is likely motivation there as well.

Do a search for properties that are being sold by an estate. Some heirs are out of state or area and have either no money to put into a property and or also have no motivation to do anything other than sell for the best price they can get.

Tyler Blackwell · Answer

Nice work @Curtis Bidwell! I don't have to know anything about its condition to know that house is an absolute steal!

@Freddy Rondon I'm closing on a property next week in Chehalis that I found on Craigslist! I never thought my Craigslist browsing would amount to anything! :) They have a fairly strong but affordable market and it's easier to find discounted properties there than in Olympia/Lacey. Wholesale deals that crop up in Olympia/Lacey often go for way too much and competition is stiff; one company that I'm aware of requires offers the same night that they do walk-throughs.  I'm doing my own marketing as well to find off-market deals...

Freddy Rondon · Answer

@Curtis Bidwell thank you for your time and advice. I have the money to fix the place but not the money to buy a place yet. I been dealing with vestus. Great company. But I also want to buy in auctions.com . Thx!

Zachary Schnautz · Answer

@Tyler Blackwell That's a good point, they might figure since the flooring is mostly in good condition that not all of it will need to be replaced but I agree the margins are thin, making me wonder what the assignment fee is. I didn't run any comps since I'm not personally interested in the deal but if I was I'd definitely run some to be sure of the ARV as well, but having a real estate license would definitely help widen the margins and reduce selling costs. While profit margins are thin the rehab probably wouldn't take long at all depending on the contractor so it could be just a quick cosmetic flip situation; however, the roof is really the wild card in this deal and the part that would sketch me out the most since those can be costly, but then again that was about half the budget and it kinda looks like it just needs to be cleaned.

Steve Vaughan · Answer

Like @Curtis Bidwell mentions, network.   I have 5 or 6 core investor buddies here in central WA and one of us always has something going on.  We have different niches and skillsets and are in different stages of our business cycle so operate well in a spirit of coopetition.

WA is large and diverse. Urban city investing will be much different than rural. West side humid/rainy much diff than e of Cascades arid.  At your price point may have to go more rural and or repurpose retail, industrial or office.  Find a seller with a problem and solve it.

How to find properties in WA state for BRRR under 260k? TIA.

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