Puget Sound MultiFamily Real Estate Blog

 

 

March 27, 2020

6-Unit Apartment for sale in Seattle | 5602 30th Ave NW, Seattle

Rare opportunity to claim a legal four-plex on a peaceful, 4850 sq ft corner lot w/ alley, convenient to bus lines and the amenities of Ballard. With three 2-bed units & a 1-bed unit (in-unit laundry), this well-maintained property also features a carport, fenced yard, shared laundry room, & bonus storage space in the basement. LR3 zoning provides maximum flexibility, initial feasibility study complete w/details available on request.

>>CLICK HERE<< to search all 5-9 Multi-family properties for sale in Seattle

 

 

Posted in Exclusive Listings
March 27, 2020

Sound Market Thoughts During COVID19

In 2005 Hurricane Katrina devastated the infrastructure, economy and every aspect of normal life in the New Orleans and gulf region.  Currently the world is experiencing a similar interruption and catastrophe with the COVID19 pandemic. The virus has made landfall in Washington State (and most of the US), and we don’t yet know how long the surge will last or how far reaching the devastation will be.  Here’s a few miscellaneous thoughts from Sound Realty Group on how and what the aftermath of CoronaVirus will look like in real estate in the Puget Sound region, and specifically the multi-family scene.  

  • Economists are projecting this recession to have a V-Shape rather than a U or L shape which have defined other recession patterns- we will quickly hit a low, but bounce back forcefully and fast.  
  • We are simultaneously experiencing 2 different economies right now.  One being the hard-hit sectors including service/hospitality where many Americans are jobless and financially hurting.  Also - with the stock market fluctuations many Americans have seen their retirement and/or savings wiped out. The other economy is still robust and includes certain businesses and parts of the tech industry that are thriving right now due to lifestyle shifts and new consumer demands.  America needs these two different economies to come back in alignment, but that will not be an immediate process.  

  • At SRG we have seen how real estate overlaps both of these economies with the stock market being so volatile right now, real estate is becoming a more desirable asset to many investors..  In several asset classes the real estate market is still robust, hot and strong!  We’ve seen fierce competition in the residential and multi-family arenas. Here’s a few projections on how that will play out in the immediate and near future: 
    • Short Term Multi-Family: rent rates will flatline (we’ve experienced rapid appreciation over the last several quarters in the greater Seattle area).  With the Government’s moratorium on evictions and enhanced guidelines for landlords we can count on rents to stay where they are at for the next few months.
    • 6-9 months: We’re predicting vacancy rates to tick up some amount as the ripples of this disruption cause some tenants to move due to altered financial situations.
    • Competition is still strong suggesting that values might hold steady.
    • Multi-Family inventory has ticked up in the last few weeks, but it's too early to tell if this is a solid trend that will continue.
  • Different asset classes will respond differently.  
    • Hospitality and brick and mortar retail are taking a huge hit and recovery will probably be slow. 
    • Office Space: in the greater Seattle area demand was high before COVID19, we have yet to see if all of that demand will return as many sectors/businesses learn to work from home.  
    • Senior Living is already taking a huge blow from COVID19, expect more regulations in the future, and consumer apprehension as a repose to the senior living facilities playing a role in the pandemic.
    • Residential/Single Family Housing: currently residential construction is deemed non-essential so many projects are halted.  This is cause for concern since inventory and supply was already limited before COVID 19. If these projects continue to be delayed we will continue to see an unbalanced seller’s market and lack of inventory.  
    • Multi-Family Housing is predicted to hold steady through this crisis.  Rent rates and vacancy rates will probably fluctuate so an investor’s business model will need to shift, and we will see some fluctuation in cap rates, but this will remain a sought-after and stabilized asset class.  

 

Want to discuss real estate investing and the economy more?  Contact us to talk through your investment strategy amidst COVID19! 






Feb. 13, 2020

8-Unit Apartment for Sale in Lakewood | 5810 5816 77th St W

*PENDING*

8-unit property consisting of (2) fourplexes on a 24,000 SqFt lot. This is a solid, turn-key investment property offered @6.2% Cap Rate. Meticulously maintained by current owner for 23 years; fully occupied w/ quality tenants & upside potential in rents. Each unit has 2bed/1bath, wash/dryer & private patio/balcony. Recent capital improvements include new windows/patio doors throughout, decks/railings, ext. paint, & parking lot resurfacing. Nice North Lakewood location bordering University Place.

>>CLICK HERE<< to search all 5-9 Unit Multifamily properties for sale in Lakewood

Posted in Exclusive Listings
Feb. 10, 2020

Thoughts on the Housing Shortage:

We’re missing 225,000 housing units.  From the year 2000 to 2015 there were 225,000 housing units that should have been built in Washington state but were not.  Various reasons and issues created this gap - the recession, construction costs, a diminished labor force in the building industry, oppressive government and municipal regulations, land use and building code etc… Supply and demand is economics 101, but the local trends have not honored this principle with the job and population growth creating a demand that the supply falls dramatically short of. This missing number of houses includes both owner and rental units, and it impacts everyone in slightly different ways.  It impacts the young professionals who would/could be first time buyers but are priced out of the neighborhoods they want to live in.  It impacts the families that want to raise their children with enough space in an affordable, but nice neighborhood. It clogs the freeways and traffic as more residents flee the urban core looking for affordable housing and then congest the roads commuting to their jobs.  It hits the low income renter who watches rent rates creep up and sees their rent dollars yield a diminished rental property condition and location. As WA residents we all pay for this 225,000 disparity in different ways, and we hope that solutions are enacted soon that effectively close the gap.

 

  

At Sound Realty Group we see this issue through the investor/property owner perspective.  Here’s what this 225,000 unit shortage means for landlords: There is a desperate need for “affordable.”  That doesn’t necessarily mean low income, but it does mean “attainable.”  “Since 2000, the state under-produced 181,000 rental units for households earning 80% or less of AMI relative to the increase in the number of households formed in these income levels.”  That means that out of that 225,000 number, 181,000 units should have been for average, middle income renters. AMI (Area Median Income) in King County households for 2016 was $84,897. This isn’t just a low income problem, this is a middle class problem.  Working with this number and applying the 30% rule (ideally 30% of one’s income covers housing costs) this median King County household would be paying around $2,100/month in rent. The current opportunity for landlords is creating and curating a rental product that appeals to that middle income renter.  The majority of the new construction apartment projects being delivered target a higher income renter. These buildings are typically more luxury level, with high end amenities and a high price tag for monthly rent plus extra fees. Some of these high brow amenities could/should be replicated in the middle class and “mom and pop landlord” rental space, like secure package delivery space and pet rent options. 

However, most median income renters are just looking for an affordable and clean rental unit in a safe and conveniently located neighborhood. We’re encouraging our clients to invest in this space since the data points to a need for rental space for middle and low income tenants. Hopefully more development and government regulations will contribute to more units (both rental and owner occupied) coming online to serve this gap, but until then we recommend buying/building and holding onto this type of real estate! 

 

 

Sources: https://ofm.wa.gov/sites/default/files/public/dataresearch/economy/median_household_income_estimates.pdf

 

https://www.upforgrowth.org/sites/default/files/2020-01/HousingUnderproductionInWashingtonState2020-01-10.pdf

Posted in Market News
Feb. 3, 2020

Duplex for sale in Tacoma | 103 E 96th St, Tacoma

*SOLD*

 

Solid, turn-key duplex. Units are 2bed/1bath with Washer/Dryer hookups; interiors are very clean with newer flooring throughout and each unit comes with one-car garage and patio. Very well maintained; quality built in 1986. Value-add: tenants are paying well-below market rents. Market Cap Rate: 7%. Tacoma is booming with some of the highest rent growth in the country! High demand rental near Fern Hill neighborhood in South Tacoma - close to everything.

>>CLICK HERE<< to search all Duplex for sale in Tacoma

Posted in Exclusive Listings
Jan. 24, 2020

Tri-Plex for sale in Tacoma | 101 E 96th St, Tacoma

*SOLD*

 

Solid, turn-key triplex. Units are all 2bed/1bath with Washer/Dryer hookups; interiors have been updated with paint/cabinets/etc and each comes with one garage space and balcony/patio. Value-add: tenants are paying below market rents; garage could potentially be converted into 4th 850SF unit. Cap Rate: 6.4%. High demand rental near Fern Hill neighborhood in South Tacoma - close to everything.

>>CLICK HERE<< to search all Triplex for sale in Tacoma

Posted in Exclusive Listings
Jan. 17, 2020

Tacoma Value-Add Triplex For Sale

Solid, turn-key triplex. Units are all 2bed/1bath with Washer/Dryer hookups; interiors have been updated with paint/cabinets/etc and each comes with one garage space and balcony/patio. Value-add: tenants are paying below market rents; garage could potentially be converted into 4th 850SF unit. Cap Rate: 6.4%. / Market Cap Rate: 7.34% High demand rental near Fern Hill neighborhood in South Tacoma - close to everything.

115 E 96th St, Tacoma

Price: $500,000

View on website

Posted in Exclusive Listings
Dec. 31, 2019

North Seattle Home with ADU | 10838 11th Ave NE, Seattle

*SOLD*

 

Beautiful, Serene & Rare Find in Maple Leaf. 4BD/1.75BA Glowing Hardwoods on Main Level w/Large Living Area. Big Picture Window Looking out to Entertainment Deck Overlooking Thornton Creek. Kitchen w/New Quartz Counters, Eating Area & Separate Dining Room. New Flooring in Kitchen & Bath. Lower Level Offers New Carpet, 3rd & 4th BRs, Lots of Storage & Workshop Spaces. Large 1-car Garage as well as Off-Street Parking. High Walk Score. Close to I-5, Grocery, Shopping, Community Center & More. Sound Realty Group worked with these owner-occupied investors to secure this single family house with ADU potential. THe buyers plan to convert the basement level with separate entrance into 2 bedroom ADU (Accessory Dwelling Unit) which has rental projections of $1950 meaning tenants will pay over 50% of this buyer's mortgae... this is "House Hacking at it's finest!

>>CLICK HERE<< to search all 5 bedroom properties for sale in Seattle

 

Posted in Exclusive Listings
Oct. 31, 2019

7-Unit Assemblage for sale in Auburn

**SOLD**

7-Unit assemblage consisting of (2)triplexes on one parcel & (1)single family home on adjacent parcel. New owner can expect 17% ROI in 1st year of ownership; 8% Cap Rate based on actual financials. Triplexes have (6)1bed/1bath units; House is 3bed/1bath 1100SqFt w/ detached 2car garage. Shared coin-op laundry generates extra income; tenants pay all utilities. Total lot area=15,876 making this a great candidate for future development. High demand rental; close to downtown Auburn & Sounder station

  • 118-202 D St SW, Auburn
  • Price: $1,050,000

View on website

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Posted in Exclusive Listings
Oct. 25, 2019

Duplex for sale in Everett | 3210 Lombard Ave, Everett

*SOLD*

 

Solid duplex near downtown Everett & in an Opportunity Zone, zoned R5. Main unit features recent studs-out remodel w/ new electrical, plumbing, kitchen, bath, siding, roof & deck w/ partial mountain views. Also has over 400 sq ft of "storage" that could possibly convert into another unit or room. Back unit also has recent roof, siding & deck upgrades & is fenced w/ 3 parking spots. Walking distance to Transit center & future light rail station. 0% vacancy w/ long term tenants below market rent.

>>CLICK HERE<< to search all Duplex properties for sale in Everett

Posted in Exclusive Listings