Tacoma, or N. of Seattle (such as Everett, maryville, Snohomish, etc.).

Outside of Seattle, there are a lot more small multifamily opportunities in Renton, Tacoma, and Everett. 

The most effective way to do this would be a basement unit, as they tend to cost much less than backyard cottages ($50,000 - $150,000 is a good estimate for a basement unit build, or way less if you throw in sweat equity or cut corners, while a 700+ sq ft backyard cottage will usually cost you $200,000+)Right now I like Kent/Des Moines (because of the upcoming lightrail stop), Renton & Everett (low prices, good multifamily opportunity), Tacoma (wonderful place to live, few good jobs, but may be revitalized further by upcoming light rail stops and more companies switching to Work From Home), and the Beacon Hill and Hillman City neighborhoods of Seattle. 

I’m in the Seattle Tacoma area. 

In the most "HCOL" area, lets say Seattle - Tacoma area, people is moving to Spokane for example.

Originally posted by @Simon Y Kim:Hey BP community,I am getting outbid on on-market properties in the Pierce County, WA area, particularly in Tacoma and Spanaway. 

North Tacoma is a great place to live, and the neighborhood around UPS is top notch.

If you're able to finance the renovation in other ways (cash, friends and family loan, credit cards with 0% interest for 18 months, sweat equity) you'll usually get a better deal on the rehab, have an easier time getting your offer accepted, and have less headaches.There are two problems with the 203k loan in the Seattle-Tacoma market, and hot markets around the country:1.

Hello fellow BPers,I am currently living near Tacoma, WA and looking to buy a 2-4 unit multi-family property in pierce county.

Even if you want to continue to live in this area, bear in mind investing in Everett, Tacoma, etc are the way to go.