Optimal house hacking method for first home buyer in Seattle

[Haley Jang]

Hello BP,

I'm currently looking for the most effective house hacking strategies for my first home in the Seattle area.

Here are some key aspects of my situation:

1.  I commute to downtown Bellevue 2 times a week.
2.  I don't own a car. (I rely on public transportation and company shuttle)
3.  I travel frequently. (up to 3 months a year)

Based on my research and analysis, purchasing a MFH in the Seattle area appears to be challenging unless you are willing to consider properties located quite far from the city. While I'm open to the idea, constructing an ADU/DADU on a SFH doesn't particularly appeal to me, especially as a first-time homebuyer.

Given that I'd like to remain relatively close to where I work (downtown Bellevue) and where I hang out (downtown Seattle), here are several potential options:

Option 1: Buy a SFH with an ADU/DADU – Ensure it has the necessary permits. 

Pros: Appreciation, separation from the rental unit, (almost) no HOA fees, possibility of STR, MTR, or LTR

Cons: Relatively old properties within the budget, potentially far away from work.

Option 2: Purchase a Townhome (2 bed+) and Lease Out Any Extra Rooms. 

Pros: Appreciation, income from renting extra rooms, possibility of STR, MTR, or LTR

Cons: HOA fees, potential distance from work.

Option 3: Invest in a Small Studio or 1 bed Condominium in Downtown Seattle and Use It as an Airbnb while traveling - Ensure HOA approval. 

Pros: Most affordable option, familiar with the area, guaranteed commute. 

Cons: Approximately $500 HOA fee even for small units, risk associated with renting out my primary residence, the need to find cleaning and management while I'm away, potentially less appreciation.

I'm thinking about buying a property by the end of this year in the $300k to $650k range and putting down $30k to $60k to keep sufficient funds for further investments. (Basically I want to start investing with a small amount of money so that I can learn from the experience and make smarter investments in the future) I'm open to exploring both conventional and FHA loan options.

I'm pretty nervous as a first home buyer, but I'm sure that I will learn a lot from this purchase. I understand that I shouldn't expect to hit a home run with my first buy, but I want to make sure I don't miss any important details. With that being said, I would be extremely grateful for any insights or advice you can provide. Additionally, if you have any recommendations for lenders or real estate agents, I'm open to hearing those as well!