Home Buying in Seattle>Question Details

Mike Suh, Home Buyer in Mountlake Terrace, WA

Looking to create some positive cash flow with 200k

Asked by Mike Suh, Mountlake Terrace, WA Fri May 3, 2013

I just got some cash close to 200k, looking to make this into some cash flow around 1k a month. What are the best option? I was think maybe buy a tri/duplex and live on one of the unit and rent out the another one? Any help would be great!

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Mike, I am both a real estate broker and an investor, specializing in creative acquisition. I bought a house in Ballard using owner financing, at full market price, and it cash flows over $1000/month. I used just $35000 out of pocket (from a private lender) to purchase. I am happy to work with partners who can bring cash to the table in exchange for an equity position.

I also operate a private equity real estate investment fund that invests in residential real estate in this area and other cash flowing communities. You may find out more about it at http://www.reicapitalusa.com to see if this is something that might be of interest.

Many of my brokerage clients are investors like yourself, and they use any number of strategies to get the return you propose. If you are serious about real estate investing, I would highly recommend that you consider joining the Real Estate Association of Puget Sound. Please come to the next meeting as my guest. Just go to the http://www.reapsweb.com website and enter "Wendy Rocks" as the promo code to get in for free.

If I may help you with your real estate investing in any way, please contact me at HomeLandInvestment@gmail.com and happy investing to you!
1 vote Thank Flag Link Fri May 3, 2013
As a Mountlake Terrace resident, you will know that the $25 million Town Hall was just voted down. But Terrace is still a great place to live and invest, and there are many other possibilities out there. A duplex or triplex is an excellent idea, and you will be entering the market as property values are still increasing, so you will be building equity as well as having monthly cash flow.
0 votes Thank Flag Link Sat May 4, 2013
Hi Mike,

Real estate is the best way to build wealth and a good way to build cash flow. Your idea of a triplex or duplex is a great one because that gives you more leverage. In the Seattle area there are only pockets where those are found.

I have spreadsheet I can use to help you analyze the yield on properties. You get the best yield by using financing to leverage your real estate. Your question is very general and I'd be happy to visit with you in more depth to help you clarify your goals.

Warm Regards,
0 votes Thank Flag Link Fri May 3, 2013
You are currently living in the most underestimated city in this area. Anything you invest in in Mountlake Terrace has a huge potential, if you buy today. The future town center and the light rail station is poised to bring in lots of development and equity. If you want to learn more, just contact me.
0 votes Thank Flag Link Fri May 3, 2013
Hi Mike,

According to your description, it is less likely that you can buy a condo to townhouse with 200K in North Seattle to have a net monthly cash flow around 1K. HOA condo dues will significantly cut down your monthly cash flow, and there is not many townhouses available for under 200K these days. Nonetheless, if you want to be on this track, you may consider south Snohomish county. Properties in cities like Lynnwood, Everette, Bothell, Mountlake Terrace, and Shoreline are appreciating faster because the residential capacity of Seattle reaches the limit. You can expect positive cash flow, but not as high as 1K.

You mentioned triplex and duplex. They are good ideas. First thing you need to consider is -- would you be willing to live complete stranger and deal with them during their tenancy? If so, you may need to look into a mortgage option. You have limited options for a 200K purchase on Duplex or Triplex in King County or South Snohomish County.

If you look for a relatively large cash flow with little amount of investment, my suggestion is that you look somewhere else than real estate. Short-term trading in stock market may be more profitable than investing in a property. If you look for a long-term security of moderate cash flow, you may include real estate in your investment. Yet every investment has its risk, and there is no exception with real estate investment.

As a real estate broker, I am interested in investment myself as well. If you are interested, you are welcome to contact me and we can exchange some tips for property investment.

Good Luck,

Johan Tong
Century 21 North Homes Realty, Inc.
0 votes Thank Flag Link Fri May 3, 2013
You live in Mountlake Terrace, so can I assume you'll be looking for investments north of Seattle? Investment properties (all properties) will be more affordable outside of Seattle. Even though prices are lower, a duplex or triplex will likely be priced in excess of $200,000. You'll want to explore financing options that allows you to keep as much of your cash as possible. I encourage you to talk to a lender about financing options available to you. With $200K, and good credit, you should qualify for FHA or conventional financing. FHA requires the smallest down payment. FHA will finance owner-occupied investment properties up to four units. Once you know what you're qualified to purchase, your agent can get to work finding properties for you. Start by contacting a lender first. The first lender that comes to mind is Washington Federal Savings. They are a portfolio lender and have a reputation for flexible loans, tailored to your situation. Good luck!
0 votes Thank Flag Link Fri May 3, 2013
200K is enough to do low end flips, and generate 30K every 6 months. My team has been doing that successfully during the past couple of years for smart investors. Why look at a 6% return on your cash, when you could make money in the double-digits?
0 votes Thank Flag Link Fri May 3, 2013
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