All Forum Posts by: Wesley Wong

@Troy Fisher Thanks for your input. It is hard to imagine the areas we're looking in Seattle will plummet especially it looks like there is strong job growth in these areas, which is also bringing in population growth. What do you think about reports that Seattle vacancy rates are going up, move-in incentives are increasing, rent increases are slowing down, and new supply coming into the market in 2016? Do you think any of this will potentially cause this unimaginable plummet? Or perhaps it won't be enough to put a significant dent into a hot market? Here is an example of a report I'm talking about: http://www.bizjournals.com/seattle/blog/2015/11/ba...

@David Faulkner Definitely agree with all your points, and we would definitely consider everything if we were buying an investment. The problem is that even though we know a primary residence should also be thought of as an investment, it pains us to think about having to commute into the Seattle core every day and back out. This emotion has kept us looking close to the Seattle core rather than the suburbs, for better or for worse. Thank you for stating out loud that we shouldn't be in a rush just because we feel like we're "missing out". Sometimes you forget and let your emotions take over. It's always good to get a kick in the rear end. We will definitely be negotiating with our landlord. In fact, I've already kicked off my reply and waiting for an answer. We're hoping we've been good enough tenants to warrant negotiation.

@Edgar Causin Great to hear about your experience and that it is working out for you. This gives me hope that our notion of owning before investing isn't necessarily the only route. You are absolutely right with your insight that it doesn't matter too much if you're owning or renting while investing, as long as the numbers make sense. Of course, we would one day want to own our own place, but it doesn't have to be today.

@Dave Skow Thanks for the tips about the FHA loan and making sure to check with the condo complex. We've been keeping our eyes out for a multi family home with a higher budget, but we haven't seen any that would make sense for us yet. Luckily, we are pre-approved by our bank for condos in our price range. Great to know that if we have any questions about loans/mortgages, we have another point of contact.

@Kyle Parks Thanks for the clarification on the lease. I will definitely be probing my landlord to see if we can work something out. I've never really thought about the seller financing option. I think financing is probably one of the areas I know least about and is something I need to start exploring. A traditional mortgage is really the only thing I'm fully aware of. I will need to talk to my wife about your offer about foreclosure auctions. We know nothing about that. I'll PM you if we find that we're interested.

@Kyle McCorkel My financing knowledge is fairly weak. I'm unfamiliar with this type of loan. I will definitely have to start reading up on it. Thanks for bringing it to my attention.

@Vlad Vdov Thanks for your take on this and sharing your story. Great job on having an amazing year last year. Hopefully it continues into 2016!

@Adrian Chu Thanks for the ideas. To clarify, when I talk about buying a home, I meant we're thinking of buying a condo as houses in Seattle are really expensive in the areas we want to be in. Our budget right now is around $300K ($350K if we really have to push upwards) for a 1+ bedroom. However, we both work close to Lake Union and want to stay in areas that would allow us to commute by bus. That means South Lake Union, Belltown, Queen Anne, Fremont, and Ballard. All of these are really hot right now. However, you bring up an interesting point. It would be awesome if we could buy now and stay for 10 years to reduce the hassle of moving our home. But there's also the option of buying for the short term and either renting or selling for appreciation. The only problem is that our checklist for a home is much more strict, in terms of wants, than a possible checklist for an investment geared mainly towards a financial profit. I guess that's something we might have to compromise on if push comes to shove. This is sort of what I alluded to when I mentioned that buying for an investment can happen at any time since there are always opportunities, but buying a home is more restrictive.

@Kyle Parks Thanks for the warning on rental caps. That is definitely something we've been keeping an eye out for. One of our worries about this is that even if there are no rental caps now, there may be one in the future. Hopefully the HOA is willing to grandfather in existing owners though. In terms of a favourable exit clause, our landlord is using the default lease agreement provided by the Washington Landlord Association. I don't see any mention of exit clauses, but we will try to negotiate one in there. I like your ideas about helping find the next renter and/or paying a penalty, rather than having to pay for the entire lease. By the way, do you know if these exit clauses are normal?

@Ingrid J. We have considered a duplex. However, there aren't many duplexes in the areas we want to live in and the ones that are available are close to $1M, which is too expensive for us right now. Tacoma prices are a little cheaper, but unfortunately, that is too far out for us to commute to work.

My wife and I both work and have no kids. We live in Seattle, Washington, where the market is really hot right now. We started looking for our own place back in October, but have yet to land anything. We've put in some bids, but they've all been beat in bidding wars and prices continue to soar.

Our rental lease is coming to an end at the end of the month and we have to renew, along with a rent increase that we received a few days ago. Seeing our rent go to someone else's mortgage and being at the mercy of rent increases really makes us want to own our own place.

We also want to get our own place since we want to start investing in Real Estate. We've always thought that owning our own place would be a good step before we start investing. However, our situation seems to be pushing us to rethink this.

We would like to invest close to where we live as we're just starting out and believe it will be easier for us to be close by. This limits us to the area in and around Seattle, perhaps as far as Tacoma down south and Everett up North. This also means we are not likely to be able to buy both a home and an investment in parallel since prices seem to be quite high here and we'll most likely be going with traditional mortgages for both to start off. We will most likely need to buy one and then another in about a year.

Some other thoughts I had. There are rumblings that there will be a downturn in the next few years. This makes me think it's better to hold off on buying a home until then. Since there should be investment opportunities in any type of market, I'm not as worried about jumping into investing now.

Saying all this, I was hoping to get some thoughts and advice as to what we should do. One thing I'm trying to do right now is negotiate with our landlord about signing a 1 year lease but having a clause that allows us to give 3 months notice to break the lease without penalty. This would allow us to search for a home without a need for timing the purchase.

Some options that I see:

1. Sign the lease and continue home hunting. Only after we find a home do we start to consider investments.

2. Sign the lease and start investing immediately and put home hunting on hold until next year when we're ready to buy again.

3. Sign the lease and start investing immediately. Continue to invest and rent until the downturn. Buy a home during the downturn.

4. Something else?

Thanks for sharing. I would love to hear more. I'm completely new to this so being able to see what you're doing and your thought process helps a lot.

@Jack B. I'm trying to understand the Seattle market right now as I'm looking to invest but it just seems way too hot right now. What indicators do you have that there will be a down turn? I see a lot of job growth right now and a lack of supply that is driving up prices. My worry is that I have no idea how long I would be sitting on this cash.