All Forum Posts by: Michael Haas

Thanks for the recommendation Ryan , and congrats on the move James! Kitsap / Bremerton is a great place to HouseHack, with lots of good Multifamily options and a strong tenant base between the easy ferry commute to Seattle & the strong Navy/Military presence in the region. Would love to talk to you a little more about your search and goals, I just shot you a message. Cheers!

@James Thomas

@Ryan Thomson

@Ryan Lam - congrats on the success so far man! And thank you for the recommendation and kind words @Ryan Thomson

Househacking is 100% the way to go- we've done it 4 times personally, and helped nearly 100 clients in Seattle HouseHack...  it's definitely changed my family's financial life and the lives of our clients for the better! Here's a couple of tips for the Househack, feel free to direct message me to setup a call to learn more:

1. If you find a property with a second kitchen (ADU or MIL), be aware that 80% or more of those units have been built without permits. Not a deal breaker necessarily, but a risk to be aware of and mitigate.
2. Brush up on building code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)
2. Check the unrelated persons count in any city you're interested in. Seattle allows 8 unrelated persons in a rental house, unincorporated Snohomish County allows 6, but some cities allow as few as 3-4. House hacking financials get significantly stronger as you increase the bed count above 4, or add a ADU or separate dwelling unit. *This is more important if you're "renting by the room" with roommates than if you're "Renting by the unit" in a multifamily or a single family with your own private kitchen and entrance. Code Requirements fro Tacoma are here:
3. I've had success with cashflow rentals around Seattle by getting off the beaten path- there are established investors bidding up the price (and therefore compressing the cap rate) on many small multi-families, but those same investors are not going after large 5-9 bedrooms SFHs that you can househack by the room or split up with an ADU / MIL. Establishing a short term rental / airbnb in part of the home is another great way to maximize rental income.
4. There are first time homebuyer assistance programs like WSHFC that you can get into a house for pretty much just the closing costs- could be just $6k - $25k up front cash to close on a $500k house. If that house has a unfinished basement you can finish and rent out, or even just extra rent-able bedrooms, your mortgage payment will likely be significantly less than you currently pay for rent, + you reap all the tax benefits and forced savings effects of home-ownership.
If you have good credit, good W-2 income, and just a little bit of savings buying a house hack is a financial no-brainer. We started with this strategy in 2013 and nearly ten years later we have 13 properties in King County / Seattle and $15,000 / month of passive income profit - if you stick with it the results compound quickly!

Seattle may not be the most landlord friend city in the country, but we do have some of the most flexible zoning and development code for real estate investors and HouseHackers. We've HouseHacked 4 times in Seattle, and done many other projects (STR's, BRRRR's, Flips, ect) and the city is a great place to invest for appreciation, value add renovation projects, new construction, and HouseHacking. We have zoning that allows you to split certain lots (like RSL zoning) in half, or build additional dwelling units like DADU's on the property to quickly turn one 3% down househack into a 2-4 unit portfolio of rental properties.

If you have a letter of non-conditional employment and your first paystub you should be able to get a loan with most lenders - happy to introduce you to some good ones like @Albert Bui .  And seriously, message me anytime if you'd like to talk more about house-hacking, it's definitely changed my family's financial life and the lives of almost 100 of our clients for the better!

Cheers and good luck!

@Eric Yu thanks for the plug man! In addition to the HouseHack Seattle & FI Team's events I would check out WAREI on facebook, Fixated on Real Estate's conference (Limitless in Pheonix), and Real Estate @ Work

@Kevin Todhunter our next Investor and HouseHacker meetup is tomorrow, Tuesday, February 28, 2023 at 6:00 PM to 10:00 PM at Compass Real Estate 837 N 34th St Suite 100 · Seattle, WA. To RSVP just google "HouseHack Seattle Meetup" and we should be the first result. Would love to see you there!

@Doug Stankavich I talked to my clients about their experience with Summit. They told me "So far still overall optimistic, but of course not without its hurdles. Our project has been pushed out quite a bit, but as far as I can tell all for legitimate reasons with permitting delays and market shifts. We were originally targeting a September 2022 completion date, but now it looks like the front house will be completed April 2023 and the main mid-summer 2023 for the DADU."

Since their project is running longer than anticipated they can't speak to the ROI yet and whether they're going to make the return that was projected / advertised.

@Sam Haleva depending on your budget, a lot of the bigger companies like Clean Crawls may be the best bet to do the work quickly. I'll direct message you the info of an individual contractor as well that may be cheaper.

Let me know if I can help with anything else, cheers and good luck with the project! 

@Tashina Badgett-Thomas I would start networking with Wholesalers and Investor agents and see if there is an opportunity to partner with them, or take a job with their team to "Learn While You Earn". 

For a beginning wholesaler, I would expect to spend $1,500 a month on marketing and get your first deal in month three. I think the advice to join a team and learn while you earn is good no matter what, but it will be essentially if you can't afford to have $0 income and $4,500 expenses over the first three months. It takes a long time to see results in this business, which is why 95% of the people in your shoes will quit before they make real progress towards their goals. Its also why the folks like us and other investors do so well, because we were willing to put in the work and grind out the tough years to be in a position to enjoy the results later.

You didn't mention this, but if you're thinking about wholesaling part time don't even bother. It is a viciously competitive market, and if you want to go toe to toe with the big guys spending $1 Million a year on direct marketing you need to be putting at least 40 hours a week into this business; when you're new, time and energy is your only advantage!

Happy to talk about this more, feel free to hit me up.

Lots of good posts here, one extra point to call out: Make sure you have access to cleaners, handymen, etc for the property. Less established locations are great, but you don't want something so far outside civilization that you can't find the help you need to run the property. Good luck!

@Crystal B. I would buy a $800k property that has the potential for a DADU, and build that out right away, or after you move out. Either condoize and sell (and pocket tax-free section 121 gains on the main house) or rent out both if they cashflow.

Selling your primary residence, if you've lived in it for 2 of the last 5 tax years, can be very profitable as @Rick Albert called out.

I second @Bill B. - If you keep your rents at market rate you should NEVER have to raise more than 10%. This hurts people who don't run their business as a business. Business has always been regulated to some extent, nothing all that new here.