All Forum Posts by: Jake Alger

Hey @James Greenwood,

I used Real Estate Express when I first got my license.  For my renewals however, I do the continuing education through Rockwell.

RE Express was a good experience.  The information was informative and their system was easy to use.  Some people choose to do the classwork in an actual classroom setting, while most choose the online version.  Really just a matter of preference.

Hi Mario,

Welcome to BP! I'm local to the east side and have house hacked my properties along with helping clients find house hack opportunities.  Your idea behind renting out units/rooms within a property to help cover expenses is correct, however, house hacking comes in many different forms and does not need to include covering all of your mortgage/misc expenses, sometimes just a portion.  The idea behind house hacking is to lessen your monthly out-of-pocket expenses, all while having a place to live.  On the flip side (pun kind of intended), some people purchase properties to renovate over a 2+ year period, while living in the property, and either convert it to a rental or sell it when they're ready (avoiding most if not all capital gains taxes).  The latter is the strategy I've employed over my time in Real Estate.

Ultimately the goals and strategies you employ will need to be what best fits your lifestyle and level of comfort.  Happy to help in any way I can :)

Hi @Esteban I.,

Your analysis of Seattle is pretty spot on in my opinion.  I come from a technology background and have been saying for years that Seattle is the next Silicon Valley.  With more and more tech coming here (and expanding here), along with the public transit that's being built, it's a great opportunity for buy-and-hold investments over the next 5-10+ years.

~6% cap rates are pretty standard in our area for MFH.  You can find higher cap rates in certain areas but may need to bring a tool belt and some cash to the deal.  In other areas of our state, 8-10%+ cap rates are achievable (think Wenatchee & Spokane).  Those are high rental markets with cheap housing.

Being that you're in the Puget Sound area, a house hack of a MFH is a very good and viable option.  I've been seeing and working with more clients the past few years who have been house hacking their way through our higher priced market.  Heck, I did so with my last house as well.  The only thing I would caution and tell you to look into, is becoming a landlord within Seattle city limits.  The ever changing, pro-tenant leaning laws have been a headache for some investors but not for others.  Always good to have all the info though :)

Hi Keith,

Welcome to BP! Investing in Real Estate is exciting and there's so many avenues in which people can explore. I'm local to Seattle and would be happy to connect if you have any questions. Based on your post, I'm assuming SFH rentals is what you're looking to build a portfolio of? There's always options around the Seattle area but will be highly dependent on price point and strategy. If you're wanting to look outside of the Puget Sound but still in-state, I'd recommend checking out the Wenatchee & Spokane as they're high rent markets.

Hi @Aaron Wong,

Renting rooms in the areas you've mentioned would be fairly simple, especially with the proximity being so close to UW.  As far as pricing, it would depend on a number of factors (size, location, privacy, condition, etc).  There'd be no scarcity of potential renters with all of the students, young professionals, and close commutability to down town.

House hacking has a different meaning and goal for everyone.  It's usually used as a strategy for further advancement in the area of real estate investing.  It isn't necessarily about positive cash-flow right away but more-so a way to build equity and keep living costs down, allowing either a better quality of life, or as a means to save money quicker for the next investment or goal.

While a single-family house-hack in our area won't likely cash-flow, there's something to be said about the appreciation over the time you expect to hold the property, and for what use.  Is this investment being used as a stepping stone? Is it a way of keeping your cost of living down?  What's the overall goal you're looking to achieve?

Hi Uday,

The HOA prices are typically tied to the amenities provided. On the Eastside in Bellevue, it's not uncommon to have $400+ a month dues depending on the complex, location and amenities. A lot of people like having the security of knowing someone else will take care of the major issues should they arise and maintain what is already there. Your lender is correct, a good rule of thumb, and one I've always used with clients, is $10k in purchasing power for every $50 in HOA dues. It's not an exact science but close enough for fairly accurate estimation.

What it all comes down to is what type of properties you’re comfortable with and the level of involvement you’re willing to go through to maintain it. 

Hope this helps!

Hi @Mickayla Smith,

I can't speak to your state specifically, but most states require licensed brokers (agents) to "hang" their license with a brokerage (i.e. Keller Williams, Windermere, Coldwell Banker, etc) in order to represent clients. This typically involves paying a monthly "desk" fee to the brokerage, which covers your insurance, oversight, etc. Further, you may have Realtor association fees and MLS dues. You would not be an employee of the brokerage, you would be a 1099 contractor, small business owner. There are lots of real estate agents who don't practice full-time as it can be extremely difficult to create steady income. Some do it on the side, representing friends and family, and some become full-time investors.

In terms of how you would be paid, you would utilize the forms from your office, MLS or state which explain how you would be paid for representing your clients. Usually compensation is a percentage fee attached to the sales price of the home, regardless of if you're representing the client as a buyer or seller. Representing the investors would be not different than any other client in regards to the forms used. The only real difference would be how they identify good properties which meet their risk tolerance and objective.

I hope this helps in some way.

Hi @Keyana Buckner,

Our market can definitely be intimidating to people as you mentioned and in certain areas, quite expensive.  A house hack is a great option for helping keep your monthly costs low (if you decided to rent rooms) or for forcing appreciation by doing some updates over time.  It's a strategy I've employed with every primary residence I've owned in the last 6 years.

I agree with @Dave Skow.  The Seattle market isn't unfriendly to non-cash buyers.  The majority of people out there looking to buy a home don't have the cash reserves in order to purchase a home outright.  As Dave mentioned, having your ducks in a row and making sure you're pre-approved, is key.  Offers that come in without a pre-approval letter in hand won't be looked at seriously.  The seller won't take the risk (and shouldn't), on accepting an offer (taking their house off the market), while waiting to see if someone will be approved for a loan to purchase their home.  Thus, finding a credible lender and chatting with them about a pre-qualification / pre-approval is an absolute necessity.

Finding a seller who is willing to offer seller financing, is going to be a tough find.  It's not impossible, but highly, highly unlikely.  Most people are looking to cash out, move funds and may need the funds to qualify for their next home.  With interest rates as low as they are now, it would be adverse to accept a higher interest rate that usually comes with owner financing as well.

Hi @Jim DeCaro,

There are lots of multi-family properties in our region, they just tend to be grouped together.  You won't find them in certain areas of Seattle while other's there will be tons.  Areas outside of the Seattle area you may consider are Tacoma and Everett.  Knowing different areas and their performance in the market will be something you want to be familiar with and spent plenty of time researching.

Hi @Colton Rockwell,

I agree completely with both comments above me.  Going the "house hack" route with a single-family home as @John Barrett mentioned, has been something many people have employed in recent times as part of their RE investing strategy given the market conditions.  It allows you to build equity quicker, lessen your monthly expenses (should you rent rooms, etc) and maintain an asset that has a larger demographic of interested buyers should you sell in the future.

To @Gabriel Graumann's point as well, look in areas that have good schools, employment, etc.  As he mentioned, parents will typically look at school districts as one of the first, if not the primary concern for where they will relocate to.  Last year I can't tell you how many of my clients who had kids named this as their primary concern, secondary being price.

In terms of finding a partner and purchasing a duplex, that's completely up to you.  I think owning your own asset, something you can live in and be solely responsible to yourself for, is probably the best first step.  With different types of real estate comes different strategies and goals.  Yours (at least to me), sounds like a single-family house hack is what you're ultimately looking for.