All Forum Posts by: Jake Alger

Hi @Henry Shen,

Welcome to BP! This community is a great place to learn and has many like-minded individuals who have a wealth of knowledge from all walks of Real Estate.

Investing within Seattle City limits can be challenging, for the reasons you've mentioned in your post.  There are stricter regulations regarding rentals and they seem to be ever changing, becoming more and more pro-tenant.

The areas you mentioned near SLU are very popular, and nice places to invest if you are to live in (or house hack) a single family home or condo.  In terms of a multi-family rental, better units and prices are to be had elsewhere.  That said, good cash-flowing returns have been hard to find, especially for those who have lower risk tolerances and higher return objectives.  However they can be found with time, patience and the ability to move fast.

Depending on what your goals are, don't be afraid to change locations or strategies.  Being open and figuring out ways to hit your goals is what investing is all about.  It's forging a path that works best for you -- not everyone is the same.  What works for some, doesn't work for others.

I'll shoot you a PM with an intro and perhaps we can chat further about what you're looking to accomplish!

- Jake

Hi Evan,

Everyone's goals are different and many find themselves asking very similar questions right now.  The Seattle market, and in more broad strokes, the whole Puget Sound area, has been extremely difficult to cash-flow the past few years for investors.  Don't get me wrong, deals can be found, but they are far and few between, and when occur, are very competitive.  

It kind of sounds like you're looking to more of an owner occupied scenario, which gives you more options than a straight investment.  If that's the case, I think definitely putting money into something where it's not a 100% toss-to-the-wind every month is worth taking a look at.  In terms of whether you should hold off or start now is really a personal choice.  None of us have a crystal ball about what next year will bring -- will prices be lower, will they be higher?  We simply have projections and experience to make our bet.

I'd be happy to chat with you more in regards to your situation and answer any questions you may have.  Feel free to reach out.

- Jake 

Hi Ryan,

As others have mentioned, try focusing outside of Seattle a bit. Tacoma has some cash-flowing properties but most multi-families in the region have been overpriced the past few years. That doesn’t mean deals can’t be found, but expanding out to other areas north of Seattle or even east will give you more options. I recently did a deal on a fixer duplex in Wenatchee that will rent for a good cash flow. I’d be happy to chat with you further. Feel free to reach out!

- Jake

Hi Remone,

I’m an agent in King County who is investor friendly and would be happy to chat with you. I’ll send you a PM.

- Jake

Hi Michael,

It all depends on the deal,  mortgage, and overall strategy. Keeping it basic, yes you’re correct about the cash-flow. However, when putting down large amounts of money you’re going to want to calculate and assess cash-on-cash return and see if that fits your criteria and if your money can earn more in other investments (that’s the strategy part).

If you have good credit, there are conventional options allowing for less than 20% down. You would end up paying PMI until the property reaches 80/20 LTV. If you qualify for conventional, that's almost always the better way to go than FHA. I can explain more detail when we meet 😀

- Jake

Hi @Michael Spearman,

First, welcome to the BP community!  You'll find a lot of great information here as you progress through your real estate investing career.

Second, I'll kind of go down your list and try to answer some of the questions you posted.

1. VR's can be a really good source of income, however, managing them can be a bit more than some people are willing to commit to. Knowing that you will have constant (hopefully) in-and-out, short term tenants, it can be mind boggling. As you touched on, you're going to want to find something without an HOA to be safest. Most HOA's have rules against "short-term rentals", typically anything less than 6 months or a year.

2. I'm an agent on the east side and I service the entire region.  I was very similarly in your shoes a while ago and also have a background in tech.  I'd be happy to chat further.

3. If you have a good credit score, income and assets, you'll likely qualify for lower than a 20% down payment. However, you'd then have to pay PMI (Private Mortgage Insurance). There's a trade-off for doing larger and smaller down payments, which I'd be happy to explain. In terms of lenders, I can recommend a few, especially since you're in tech, who cater towards your type of income and ambition.

4. I'll send you a PM.

5. You're right, BP is incredibly helpful and the combined knowledge of everyone here, whether new to real estate, or a seasoned veteran, allows for many thoughtful experiences and problem solving ideas to be shared.  You can provide value by simply sharing how you feel about certain posts, deals people are posting, or asking questions you have.  Being involved in any way possible will allow you to network, grow and learn and vice versa.

I hope some of these answers were helpful.  Definitely feel free to reach out as I'd love to chat with you.

- Jake

Nice job!  Great to hear stories like this.  A wealth manager friend of mine has always said that the most savvy investors tend to make the best returns when they're going against the grain, against human nature.  That doesn't mean to be reckless, but to not let emotions control your strategy, which sounds like what you've done.  This isn't always the case but definitely something to think about.  Your timing was impeccable to say the least :)

Hi Kyle,

Welcome to BP and to the Seattle area!

FHA loans are great for certain situations but what most people don't realize, is that if you have the credit, there is a 3% conventional option available via most lenders. The first reason I mention this option is that PMI stays on an FHA loan for the LIFE of the loan. Thus, you would need to refinance in order to drop the mortgage insurance once you reach the 80/20 LTV (and who knows where rates will be then). The second reason is that with FHA, I believe the rule is that you cannot have 2 FHA loans within the same county at the same time. I'm not entirely sure on this but it is worth looking into if you plan on doing multiple FHA loans within King County.

House hacking is a great way to lessen your monthly costs. In terms of fully cash flowing a property from the get-go, I wouldn't plan on it in our market. Deals can be found that do so, but really only when fully rented out and not being house hacked. Then it's a question of what your marks are for cash-on-cash ROI. Either way, putting money towards something you own is a lot less painful then "throwing money down the drain" as you put it :)

Seattle tenancy laws are a complete pain to deal with.  Anything within Seattle City Limits has become very pro tenant and less landlord friendly.  I advise anybody not willing to take the risk of the ever-changing rules and laws regarding tenant/landlords, invest outside of the city limits.  I know of many investors in the past few years who have liquidated their rentals within the city limits and moved the cash further outside the city (not talking the middle of nowhere, but close enough for commutes, etc) or even out of state.

Not being sure how to move forward is an extremely common issue for most people just starting their home search.  Being that you haven't purchased a home before, it's hard to know where to look.  I'd be happy to chat with you and learn more about your overall goals.  Moving forward I think chatting with an agent and lender is a must.  Learn about your options, talk through your ideas and have a team ready to execute when you're ready.  I'm also happy to provide referrals.

Feel free to reach out and I can answer any questions you may have :)

- Jake

Hi Alphonso,

What areas are you looking to invest in?  What types of investments are you looking for?  I'm an investor friendly agent in the Seattle area and would be happy to chat with you.

- Jake

Hi David,

As the transit systems hit more areas around Seattle, those areas will likely see growth.  Given our geographic layout, with the mountains to the East and the Puget Sound to the West, expansion can only go North or South.  We've seen huge appreciation the last few years in areas like Bothell, Kenmore, Kent and Renton.  Those areas are close enough for average commute times while remaining affordable for most families.

Add Shoreline and the transit system and they could outpace other areas as there's room for growth.  However, I wouldn't put all your eggs in one basket so to speak.  Banking solely on the transit system for appreciation or rentability might not be a wise move.  Looking at an area for what's already there would be my first move.  Projects, in particular transit systems and roads (think the Alaskan Way Tunnel), always get delayed.  If the expectation is 6 years, it'll probably take 10 and cost twice as much.  That seems to be the way Seattle runs budgets and timelines :)

If that were to happen, you may need to hold longer to achieve your goal.

- Jake