All Forum Posts by: Aengus McMillin

Thanks for the advice everyone, it is greatly appreciated!

@Jonathan R.

I actually don't own my primary residence yet, I moved into a new apartment last year before I had much capital for a down payment, and I ended up renewing a few months ago because it is a nice place and I still wasn't sure I was ready for real estate. I am seriously considering trying to get myself a townhouse or condo next year when my lease expires though. And yeah, getting priced out is definitely a concern.

@Evan Salvador

Very good point, I have considered the tax benefits of owning my own home, but haven't done tons of research into exactly how the numbers would work out for deductions from rental property. Will put it on my todo list to investigate, thanks!

@Hunter Motto
Yeah definitely going to consider house hacking. My commute is about a 3 minute walk right now, so very hesitant to move way out of the city, but definitely will see if there are good places to house hack and/or buy cheap and renovate that would be on good transit lines to my work. 

@Tyler Mullen

Thanks for the advice! I definitely think the risk of not buying is the biggest reason I am looking into this now, I think balancing the risk of buying (potential for a crash or for negative cash flow) with the risk of not buying (missing out on major market wins, being tied to rapidly rising rents) is going to be the big thing for me. I think I will crunch some more numbers and keep looking into properties that are available, try to develop a profile of the type of place I would want to buy and what the value would be of that. Currently thinking at least in the Seattle area I will focus on trying to find a home to purchase next year, but i will keep my eye out on surrounding areas to get a feel for what the markets are doing. 

Hi Chris, I think I'm a little bit confused about your point. My concern is that I'm worried that if I did a buy and hold I wouldn't be able to find good properties that would be able to cash flow. If the rent is only slightly higher than the mortgage, I would likely end up cash flow negative after fees and expenses.

Thanks Tyler! I have looked a little bit into duplexes, although it seems that those are similarly overpriced based on how many units could be rented out (e.g. I saw a 4 plex, but it is 1.2M and the estimated rent was ~1.5k per unit). But yeah buying a place for myself that would also bring in some money might be a good way to go, I will see what the market looks like for properties with accessory units.

Hi, so I am a new BP member, and I have been listening to some of the podcasts, reading the educational materials, and checking out the forum for the last few days. I'm interested in REI, but I'm not sure there would be much benefit for somebody in my (admittedly quite fortunate) position.

I'm 23, I live in Seattle, and I work as a software developer for one of the big tech companies in the area. I make a fairly solid six figures in salary + stock and have been able to save/invest 50-60% of that for a few years now. Although I don't necessarily want to retire right away, I want to reach financial independence, hence the high savings rate, my portfolio is already at around 250k and I should be able to hit my target number within about 7 years. I have been thinking of real estate investing as a way to leverage my position and grow it faster, but my concern is that the effort required to get much in the way of wins in the Seattle market just wouldn't be worth it compared to simply letting my portfolio grow using Bogleheads style index fund investing.

The Seattle market has really high prices right now, so the 2% rule would be crazy to achieve, and even the 1% rule would be incredibly rare, i would likely be looking at closer to .5%. So cash flow likely would not be great in the short term. I have been thinking about appreciation as a route to profit, but concerns about a possible correction make that approach concerning. Alternatively I could try and find places out of the city/state, but I don't really drive, so the scope of places I could look at would be a bit smaller, and there would be additional effort dealing with renters out of area and it would guarantee that I would need to get a property manager.

Does it seem like there would be a good path forward for investing in Seattle, should I consider trying to partner with someone who can visit places in person and try and invest out of area, or should I likely just keep on my current path and stay the course on index funds?

Currently leaning towards staying out of REI for now, and possibly try to get into it after a correction, but wanted to get a gut check from people who know much more than I do.

Thanks!

Aengus