Critique our Buying & Investment Strategy - Seattle, WA

[Travis C.]

Hey all,

I am pretty new here but have been reading up on home investment strategies. My partner and I (DINK) are currently living in an apartment in a walkable area in Seattle for around $2500/mo and have decided to ramp up our savings to fund a down payment on a home. We are finding some smaller homes in the area going for about $750-800k. We are hoping to find a home for around this amount that has the potential for STR/AirBNB such as an unfinished basement. For example, 800 sq ft on top floor with 600 sq ft basement. A decent sized yard for future ADU is a huge plus, but may be a pipe dream. We'd live on the main floor and STR the basement. The hope is that we can catch a property for a good price that is a little neglected but doesn't need too much work (100k or less) to finish the basement and bring it up to par. Then we could bring $1-2k/mo in STR revenue to help offset the $4-5k/mo mortgage payment.

We don't own a car so having a walkable/bikeable/transit location is a must. Fortunately, a few homes in our neighborhood have been selling in our price range, although we don't know if there was something wrong with the properties that required a ton of $$ to repair.

Our strategy is to finish saving up for a 20% down payment, which will take at least another eight months. We'd love to avoid PMI but recognize there's an opportunity cost of waiting to secure the 20% plus emergency savings. I expect that interest rates will start to go down by next year, which will coincide with an increase in home prices. Sound about right?

What do you think about our strategy? Thanks so much, all! 

[Sherief Elbassuoni]

@Travis C., sure one option is to keep saving for the 20% down, that said, vast majority of investors are not doing that since opportunity cost may be high, especially if a deal showed up in the next few months. Putting minimal money down isone of the beauties of real estate investing