Shortly after purchasing our Delridge duplex in West Seattle, we started searching for another property. We set our sights on buying another triplex in a gentrifying market.
Our search
As prices increased close to home, we broadened our search to include neighboring cities around the Sound. More people were getting priced out of Seattle, gentrifying neighboring cities. Our goal was to find a deal that would appreciated. We focused our search in the following cities:
- Tacoma: Tacoma was our top choice. Just 40 minutes to the south, Tacoma was easily accessible via car or commuter train. It is a smaller city right on the water, and it has culture, multiple universities and cute houses. We submitted several offers in Tacoma, and one was accepted. We ultimately backed out of that offer due to the amount of work uncovered in inspection.
- Everett: Like Tacoma, Everett was easily accessible via car or train. It was also home to Boeing, a large employer in our area. And Everett was about to get its own commercial airport at Payne Field. We found several intriguing properties, but never made an offer on any.
- Bremerton: Bremerton is across the sound from Seattle, and best accessed via ferry. If you have an hour commute, the ferry is by far the most relaxing way to spend it. Bremerton is a navy town, which has kept unemployment low and the economy steady. That’s how my husband ended up in the area – his ship was decommissioned in Bremerton.
When we learned that there was a new fast ferry from Bremerton to Seattle, we focused our search there. That would cut commute time in half, making it more attractive to Seattle workers. And our money could go a long way in that town. We found a triplex a mile away from the ferry terminal and made an offer. Seller accepted our offer in spring of 2017.
How we financed
We refinanced our Central District triplex prior to our purchase, so we could use our VA loan on the new property. We saved on our down payment with the VA loan – 100% of our budget for this house went to renovations. A VA loan has a residency requirement, so our initial plan was to move into one of the apartments while we renovated the other two.
Fortunately, we saved quite a bit for the remodel while we house hacked.
Scope of the remodel
We initially planned to complete the following work in each apartment:
- Lower unit: new floors, refresh bath (new tile, new floor, new vanity – no plumbing), refresh kitchen (new backsplash, new floor), paint
- Middle unit: new floors, refresh bath (new tile, new floor, new vanity – no plumbing), new kitchen (replace cabinets, replace appliances), paint
- Upper unit: new floor, refresh bath (new tile, new floor, new vanity – no plumbing), new kitchen (replace and reconfigure cabinets and appliances), add laundry, raise ceiling
By far the most work was in the upper unit, and that remained true in the end. But there were so many more things that we did not anticipate. We thought we would have at least one of the units ready to rent in 2 months. In the end, it took us over three years to rent. It still pains me to write that.
Surprises in the remodel
Here are some of the things we did not plan for:
- Increased scope: When planning a project like this, it’s said that you should double your time and cost estimate to get the true timeline. I did add to our planned budget, but not enough.
- Hiccups with city: We missed some due diligence when we purchased. We checked county records to confirm zoning was correct. However, we learned during construction that the city determines zoning, and the city said that we were zoned single-family. This was by far the most terrifying thing that happened in the process. In the end, the city worked with us to update the zoning, but that was not without headaches.
- Building code: We also learned that Bremerton building codes were far more strict than Seattle’s codes. We had to replace a deck and the ceiling in the middle unit, both of which we had not planned. It also took us a full year to install an oven vent to code. The oven in the top unit was below a gabled roof, so we planned to install a wall vent instead of a traditional over-oven vent. We found a vent that met the CFU requirements, but learned during inspection that we had to replace the grill of the vent. I don’t know why I didn’t consider this, but most wall vents are plastic… that doesn’t work over a heat source (so obvious now…). I could not find a metal vent that met CFU requirements, so I had to replace individual parts on our vent. And we had to customize the vent cover to use those parts. This was a nightmare and took forever.
- Distance: One of the biggest factors was travel fatigue. Although Bremerton is a ferry ride away, it is a 3 hour commute for us. We started dreading this commute… and spent less time over there. And we could not find reliable contractors, so all work had to be supervised and inspected by us. I’d say this was the main reason why it took so long; we just didn’t want to go there.
Covid, or how we finally got it rented
After an initial surge of activity, progress stalled for a few years. In 2018, my husband’s step-father passed away, so we traveled to Vallejo every weekend to be with family. I also learned I was pregnant at the end of the summer. I made some progress while on maternity leave in 2019, but things did not start coming together until 2020.
Stopping all travel forced us to focus on things closer to home. We started spending weekends and vacation time over in Bremerton, and we finished the last tasks for our certificate of occupancy in summer 2020. We rented the lower unit first, then the upper. Work continued on the middle unit into 2021.
The final push to finish
We planned to finish the middle unit in early Spring, but some sudden vacancies in Delridge moved our timeline back a bit. All that was left was cosmetic work – finish crown moulding, touch up paint, replace door trim, repair and trim closet. We picked up the pace when our refinance became contingent on completion, and we are on track to finish the apartment on April 18, 2021!
Union Hill today
When we reflect on our experience with Union Hill, my husband and I tend to use the phrase “we learned a lot.” That’s an understatement. This property was our biggest headache 2017 – 2020, until it was rented. But we learned so much about renovation and permitting. We learned about our tolerance for projects outside our city. We apparently didn’t learn any lessons, as we are already talking about purchasing and renting another property outside of Seattle. And on the plus side, rents have increased significantly in Bremerton, even with Covid. Because of the base and ship yard, employment stayed consistent through 2020.
