Seattle Real Estate Deals- How To Find Them!

Christian: [0:00] Hello, hello, and welcome to another edition of the Awesome in Seattle podcast. This is your host Christian Nossum of the Awesome Nossum group at Wilson Realty Exchange, Inc. And today we're talking about something near and dear to my heart. This is the way that I got into real estate 18 plus years ago, and that was deals, and specifically finding deals. That is something I love to do, and it's actually can be taught, surprisingly. It's not easy, but it can be taught. So that's what we're gonna talk about today, how to find deals, how to spot them, what to look for. If you want a deal, you gotta listen to this episode. First off, I gotta, I gotta introduce my co-hosts, the wonderful agents of the Awesome Nossum group. I have Melanie Ghadamy. Hello. And Joanna Beecher.

Joanna: [0:40] Hi.

Christian: [0:41] All right, so first let's, let's explain what a deal is. Not everyone knows what a deal is, and sometimes you just want a house that matches your buy box, meaning, you know, I want three bed, two bath. Ooh, 2,000 square feet in this neighborhood, and that's all you want. That's fine but some people are like, "No, I need to get a deal. I need to somehow get a deal on this." And over the last few years it's been super hard to get a deal because we had little inventory. Everything was selling in a matter of days, sometimes hours, for way over the asking price. So although before it was really important to just get a house and that was the deal, that's a little bit similar now. And I know that sounds funky, but we have such low inventory that if you find something that meets your criteria, that could still become similar to how it was over the last few years. Now let's, let's define what a deal is. Now, a deal is something that you can add value to. Maybe it's in the path of progress, so property values are going to increase over time. Maybe it's something where it's cosmetically ugly, and you can add some value to that by redoing it. Maybe it's, um, a house that has a lot in the backyard that you could either subdivide or add a DADU, and you could build that DADU and then sell it off and double your money on the cost of the DADU. Like, there's so many different things that constitute a deal. Sometimes it's just the price. Like, the price is just great, and that's what most people assume a deal is. But that's not the only thing that a deal is. So today we're gonna go over all these things. So have you heard the quote, "You make money when you buy in real estate"? Some people have. A lot of people haven't. But that quote is actually real. It's true. You don't actually make the money when you go to sell, although that's when you finally get the funds. You actually make money when you buy. If you buy a good enough deal, when you go to sell you're gonna get all that profit, and that's kind of something that we need to go over. All right, so moving on. So I, I will say this, it is almost impossible to spot a deal online only. You need to see things in person. You need to understand the floor plan. You need to spot what is not in the photos or in the satellite image or any of those things. Seeing it in person is almost vital to spotting a deal. That's why we as a team love to go out and look at houses, both together, but also individually. And when we spot a deal for one of our clients, and maybe I'm looking at houses, and it doesn't work for my client, but maybe it works for Mel or Joanna's client, I will share that info with them, which is awesome that we work on a team together like that where we can do that stuff And not everything is a deal right away. Sometimes you're buying something that's undervalued right now because you see what's coming down the line, what, what's happening in the future, and that's why it's a deal. So if you wanna find some deals, if you wanna be up to date on what deals we're seeing out there, follow us on Instagram. We post some of these deals on there, just Awesome Nossum Group on Instagram, and then join our newsletter. If you haven't already come to our class, that's how you get on our newsletter. If you wanna join our newsletter, you can always DM us on In- on Instagram. You can always email me, text us, whatever. Just ask us to be joined to the newsletter. In that newsletter, we generally post at least three deals every single month that we see out there, and we'll explain why we think that's a deal. So Joanna, what are some things that people can look for in a home listing that help them spot it as a deal?

Joanna: [4:07] Well, the first one that I can think of right off the top of my head is price. Yes. Um, that's obvious, right? Mm-hmm. Um, generally when something is priced low, you would think that's the deal. A lot of times people, all the people see that, so they come running, but that's not always the case. And that can also be if it's priced low and there are bad photos. Mm-hmm. That's the second one. Yes. Um, a lot of people see bad photos, and they say, "Mm, nope, not gonna go for that one. It doesn't look good online, so I'm not gonna go see it."

Christian: [4:41] Mm-hmm.

Joanna: [4:41] But if you take that chance- Yeah … you could spot a good deal.

Christian: [4:44] And sometimes the photos are just bad because the agent used a horrible camera- Right … or took the photos them- themselves. With their iPhone.

Joanna: [4:49] Or

Christian: [4:50] not even their iPhone, 'cause those take amazing, like a flip phone or something

Joanna: [4:53] crazy. True. That's true.

Christian: [4:53] Or you're seeing the- the agent in the mirror as a selfie, and you're like, "What are you doing, dude?"

Joanna: [4:58] Right.

Christian: [4:59] Yeah.

Joanna: [4:59] It's just, don't always trust the photos- Yep … is that theory right there. Okay, so the next thing you can think about is days on market, and when you're looking at a listing, if you see something that's on for a couple of weeks, that's pretty average right now. Mm-hmm. So anything that you see on past that, like a month, two months, three months, pay attention to that listing. And that seller is going to be motivated most likely to sell. Yep. So yeah, that brings me right into my next deal marker, which is, um, seller incentive, their motivation. Like we just said, if their property has been sitting for a while, that's pretty indicative of them most likely getting a bit frustrated- Mm-hmm that their house isn't moving, and that they'll want to sell quickly, so definitely pay attention to that. Yeah. Um, hopefully these tips show that having the right agent to help you sell your home is extremely important- Yes … and should definitely be remembered.

Christian: [5:57] So- And I'll add this too to that … yeah. Like, there's- there's a lot of times where in this market where we're not, everyone's not waiving their inspection contingency. If a house goes pending inspection, meaning it's under contract, they do the inspection, and then the buyer backs out, and it comes back on the market, and now it's available again, that's when a seller is like, "Oh, man." Everyone, every buyer assumes at that point something is wrong with the house. 'Cause it went under inspection-

Joanna: [6:23] Yep

Christian: [6:23] they found something. Suppose, like, doesn't always have to be that way. They could've just backed out. Exactly. But they assumed something was wrong, and the seller wasn't willing to repair it. That's not always the case. So there could be extra motivation in that situation.

Joanna: [6:34] Absolutely. And again, touching on what Christian said earlier, most deals can't really be spotted online. You can have those indicators as, you know, days on market and bad photos, but, you know, the best, best course of action is to always try and go see that house in person, and that will be the most telling for you- Yep … right there.

Christian: [6:57] And as your agent, we will go and preview houses for you, which means we will go out before you even meet us over there, and we can go see it- Just by ourself and get a feel for it and see if there is some potential deal to be had there. So don't hesitate to reach out to us as your agent to go do that

Melanie: [7:14] Let's talk about what adds value to a home. Finding a property with an unfinished space can be a huge opportunity to add value to your home, and precious square footage. If a home has a unfinished basement or an attic, have us go check it out and see if it's a good ceiling height to finish, and if there's any signs of water damage.

Christian: [7:38] Mel might not be the best person to figure out if the height is right. Um, she's a little on the, uh- … shorter end, but, you know-

Melanie: [7:44] I am-

Christian: [7:45] She

Melanie: [7:45] can

Christian: [7:45] still measure for you … the

Melanie: [7:46] perfect person. 'Cause an attic most likely won't be, you know, seven foot, maybe 6'5". Um, so anyways. Additionally, if there is an easy way to add a bedroom to the house, or the garage, right there, that's an added bonus and adds value.

Christian: [8:02] Yeah. Yeah, and personally, there's been a few houses where, that I've owned, um, where we converted, like, the downstairs that was completely unfinished, had super tall ceilings. We added numerous bedrooms, another bathroom, a laundry room, uh, a rec room area. Like, there's all sorts of things that you can add. By doing that, you're increasing the value, 'cause you're taking it from… Like, for one s- house that we did, we converted it from a two bed, one bath, into a nine bed, three bath. Wow. It didn't cash flow as a two bed, one bath house, but it definitely cash flowed as a nine bedroom, three bathroom house near the University of Washington. So, there's definitely ways that you can add value. Um, another way, another example is, we've helped clients where, you know, it was a three bed, one bathroom house. And most buyers want at least that extra half bathroom. When we're out looking at houses, we could spot, potentially, where you could maybe add another half bathroom or a full bathroom, and that can add a ton of value. Because now you're, when you go to resell, whenever that time comes, in a few years, 10 years, whatever it is, you're now selling a one and a half bath plus house, versus just a one bath house, which limits your demographic of potential buyers. So, you wanna increase your buyer pool as much as you possibly can.

Melanie: [9:17] So, another one is if a home is cosmetically ugly, which I'm sure- Mm-hmm … we've all seen.

Christian: [9:22] Yes. Um- Orange carpet, carpet in the bathroom.

Melanie: [9:25] Yeah, ex- Mm. Yeah, carpet in the bathroom, that's a- Yum … a no.

Christian: [9:28] Yeah.

Melanie: [9:30] So, but if a home has good bones, but it's ugly, there's a lot of potential for a good opportunity for you, as a buyer, to make some easy updates, like painting, changing the carpet, maybe replacing fixtures.

Christian: [9:46] Mm-hmm. You could even add luxury vinyl plank flooring, which is- Mm … actually super easy to install yourself. Yeah. You don't even need to hire someone. Even if you're slightly handy, you can totally handle it. I know, 'cause I've done it. I'm not the handiest guy in the world. Yeah. But, and it's not super expensive, and it looks great. It's waterproof. It's awesome. Um, it's a great way to change the entire feel- Of a room by changing that flooring.

Melanie: [10:09] Exactly. Yeah. And lastly, I'm sure you guys have all heard us talk about house hacking, and that is a huge opportunity to add value to a home.

Christian: [10:18] Mm-hmm.

Melanie: [10:18] And if you don't know much about house hacking, um, and why it's such an incredible tool for you as a buyer, then you should listen to our podcast.

Christian: [10:26] Yeah, episode 90. No, 88. Almost said it wrong. It's episode 88. We just redid this one. Um, I think it was originally, like, episode number six, some three and a half years ago that we started this podcast. Yeah. And we updated it. It's great. Definitely check that out, episode 88, House Hacking, How to House Hack in Seattle, something like that. I don't remember the exact title.

Melanie: [10:48] Yep, exactly. So once again, just finding a property that you can rent out or a part of it is a fantastic way to get a deal on a home-

Christian: [10:56] Mm-hmm … Melanie: and set yourself up for flexibility if you need extra income.

Joanna: [11:00] Okay, so sometimes a deal doesn't even reveal itself for years. Mm-hmm. Um, the future potential of a property is a great way to get a deal and make yourself incredible equity. One of those is a DADU. Mm-hmm. If you've listened to those podcasts that we have, uh, you know we love talking about DADUs. Uh, a lot of single family lots in Seattle have the potential to build a DADU. If you build one, you can either use it for extra space, maybe rent it out-

Christian: [11:31] Possibly sell it. There's also some

Joanna: [11:32] different opportunities. Shorter long-term rents, yeah.

Christian: [11:34] Yeah.

Joanna: [11:34] You can also build the DADU and then sell it off. It's a bit complicated to explain this, but it is possible and-

Christian: [11:41] Yeah. I'm actually doing that with a property, uh, as we speak. Um, we're building a DADU, and we're gonna condominiumize it, is what it calls, it's called in Seattle, and then we're gonna sell it off. Um, it's a great way to make a lot of money, uh, and it costs a lot of money, but you can get loans for that type of stuff, too. So if you are interested in doing DADUs, you can just reach out, and we can chat with you about that.

Joanna: [12:04] You can get a good ROI.

Christian: [12:05] Great ROI.

Joanna: [12:06] So-

Christian: [12:07] Yes.

Joanna: [12:07] Next up is an ADU, uh, which is similar to a DADU, but it is, um, attached. There's a lot of homes in Seattle that have that potential to add an ADU or finish an attic, um, or your basement or garage.

Christian: [12:23] Yeah. An ADU is basically otherwise known as, like, a mother-in-law apartment, like some sort of apartment that's inside your building structure, whereas a DADU is a detached str- like, structure, a separate unit. Um, it's al- it's like a backyard cottage.

Joanna: [12:37] Yes.

Christian: [12:37] We have podcasts all about this as well, so check those out.

Joanna: [12:39] And then you also wanna think about zoning. If you find a house that is in an area that is zoned for more density, uh, then this could be a chance for you to potentially sell the land for a lot more money later on- Mm-hmm or maybe even build a different type of property on the lot.

Christian: [12:56] Totally, and that actually leads me to path of progress. Path of progress, basically, an easy example is the light rail. So the light rail line goes from actually past south of SeaTac Airport now, all the way up, uh, and it's, this year, supposedly going to go all the way to Lynnwood and all the way across the water to Redmond. So if you follow just that path, the line, the rail line, and you bought stuff near each station, those areas almost always go up in value much faster than the areas beyond that. They also change the zoning around those stations, around each station, so they have a lot more density. So what used to be, you know, a $400,000 home in Shoreline, near the upcoming light rail station there, is now zoned for an eight-story apartment building, and that wor- lot is worth a hell of a lot more than the $400,000 house that was sitting on it, or maybe if it was even a, a $600,000 house or an $800,000 house. It's worth more now to be torn down and developed into its highest and best use, which is what it's zoned for, and that's, you know, a big apartment building. Investment potential, so this is another big one. So if you see yourself as someone that wants to get into the investing game with real estate, keeping your eye out on how you can turn your s- the house that you're gonna live in into a future potential rental is a great way to get a deal. Part of that is the financing- So when you own a house that you live in, you get to get owner-occupied financing, and all that means is you're gonna live there for at least a year, your interest rate is lower, it's locked in for however many years. Generally, people get a 30-year lo- loan, sometimes they get a 15-year, but whatever you choose, and your interest rate is locked for all 30 years or 15 years, and that means that your payment is locked in at that low rate too. Now, on the flip side, if you were looking to buy this just as an investment property, you would be putting 20 to 25% as your down payment. Instead of when you live there as your own house, you could do a 5% or 3.5% or even a 10% loan or down payment. That can really impact how much cash out of your pocket you are putting into that investment property and allow you to buy more than one property over the long run because not all your cash is tied up into one specific property. So another example is we had a client where he bought a house, he finished off the basement, he added numerous bedrooms, another bathroom, a laundry room similar to what we talked about earlier. He's a single guy. He rents it out to traveling nurses, so every three to six months he gets a new roommate in one of those rooms, and he lives there for basically free. I think he might even make money every single month. So he's getting paid to live in his own house because he has like four roommates or something. It's an awesome way to go, and he can, after a year, move out, keep that house, keep that financing, keep that monthly payment in place, and buy that next property, and that is what his goal So closing out here, we as agents can spot so many different other ways to find that deal. There's a lot of nuance in this, a lot. Like it- like we said earlier, and I think we've talked about this a lot, it's really hard to spot a deal online. The photos could be bad, but maybe they're not showing where some of that potential could be. Maybe the, the zoning's changed, but you can't find that on the listing. Maybe there's, you know, some changes going on in the neighborhood that were just announced and was in the news, and we are paying attention to that, and you didn't realize that in that neighborhood 'cause you just started looking there. Um, there's lots of things and lots of ways that we as your agent here at the Awesome Nossum Group can help you spot a deal. So if you are in the market, you are hoping to find a deal, we would love to help you. If you wanna chat, you can always schedule a time with us right online, super easy, and there's zero cost, zero pressure. There's no obligation to buy a house. Like, we literally just wanna help you understand if this even makes sense for you. You can do that right on our website, AwesomeNossumGroup.com/schedule. That's AwesomeNossumGroup.com/schedule. You can schedule a strategy session right there, right with any of us at any time. So that'll be a, a half an hour. We can do it either over Zoom, we could even meet up in person, and just go over individually what your situation is, what your goals are, and we can see if it's realistic for you to get to that point. So that's it for this week. Thank you, Mel. Thank you, Joanna. And, uh, until next week, we'll see you then. See ya.

Joanna: [17:37] Bye.