We Bought a Floating Home!

After years of renting, we finally took the plunge and bought a home – a floating home. For starters, you’re wondering, why were we, two people with a lot of real estate experience, renting? Great question.

It started four years ago when we were looking for a new place to live, we had outgrown our Capitol Hill loft. We had a few friends living on the water and it seemed like an amazing lifestyle, but something you wanted to try before you buy. A “too-good-to-be-true” rental came up on Craigslist (which is now for sale!). Turns out, it wasn’t too-good-to-be-true, it was for real! So we rented a three-bedroom plus den floating home in Eastlake with an amazing rooftop deck for what seemed like a great deal. We rented it for three years as it seemed cheaper than what it would cost to buy and we weren’t really in a position to buy. Of course, in hindsight we should have made buying a priority as prices skyrocketed during these past four years of renting.

After three years of below market rents, our landlord raised the rent which caused us to see what else was available for rent. We jumped ship from the 2025 Fairview Ave E “Log Foundation” dock and moved to a home at 2600 Fairview Ave E at Mallard Cove. Long story short, we made the mistake of signing only a twelve month lease, knowing it would take longer than that for us to buy. Turned out that our landlords loved lake living as much as we did and wanted to move back in :(. Knowing this, we started our house hunt at the end of 2017.

Why buy now?

I’m sure that we’ve overpaid and are buying at peak, or close to it, but we don’t care. We’re tired of being renters. I also know from buying at the peak of the last cycle that if you buy at peak and can stomach the downturn, everything will work out in the end. (Read about our experience selling those places).

What we were looking for

Having lived on two different floating homes over four years we had a good idea of what we wanted:

• Eastlake because we like evening sun exposure, and it is close to Grandma’s
• 3+ bedrooms
• 3+ bathrooms
• 1,800+ square feet
• Moorage for at least a 20-23 foot boat
• Good deck space
• Covered parking for at least one car, ideally two
• Ideally end of dock or on a wide channel

How we searched

With 20-30 floating homes hitting the market a year, and only a handful that might meet our criteria, we knew we couldn’t wait for the right home to come up.

For starters we put feelers out on our dock, but it didn’t seem like anyone was selling. Then we hopped in our dinghy, and sent letters to the 35 homes we identified from from the lake as homes we’d buy if they came on the market (basically Roanoke Reef and Fairview Landing). Of those, we heard back from four, all letting us know they weren’t planning to sell anytime soon.

After getting no positive responses, we decided to expand our search criteria to any single-family home in Eastlake and sent out 125 letters to all the single-family homes in the hopes of buying a home as a temporary residence while we waited for our dream floating home. We had five responses and two turned out to be promising. We wrote an offer on one, but the owner decided not to sell, the other person changed her mind about selling too.

Striking out, we rented the only tw0-bedroom apartment available in Eastlake at the Equinox so we wouldn’t be homeless when our lease ran out. But lo-and-behold, as I was walking down our dock a week away from moving out, a neighbor asked if we wanted to buy his floating home.

Of course, once we got under contract with him, a lot of off-market floating homes came to our attention (including the first home we rented!). But none of them proved to be of interest and we’re glad we bought our neighbor’s.

How we negotiated

We didn’t. We gave him the price he wanted and a nearly two month free rentback. Sellers hold all the cards in this market, or at least they did until a few weeks ago!

What we bought

Buying our neighbor’s home meant we knew the community well! And the home fit a lot of our criteria:

• 1,911 square feet
• 3 beds, 2.5 bathrooms
• 2 parking spots in a secure garage
• 2 moorage spots
• A floating dock registered as a vessel with an electric motor
• Rooftop deck with a crane
• Mostly fit our style

It is an interior floating home and not one with great waterfront exposure, but it will make a great home and we’re lucky to have landed back on the dock.

How we financed

There are only three lenders that lend on floating homes – Pacific Crest Bank, Sound Community Bank and Banner Bank. We opted to go with Pacific Crest Bank. They had the lowest rate for the loan program we were interested in. Are rates higher for floating homes? Not necessarily. But all three lenders charge a 1% origination fee, which is steep compared to what it costs to originate a loan with a traditional lender.

The other interesting twist with floating home loans is that they require a dive inspection of the float. Most dive companies charge $600 for this, but we went with Coastal Diving who charged $400.

In terms of appraisal, there is only one appraiser who does floating homes, Pete Rogerson, and his appraisal came in at the value we were paying.

What next?

The home has good bones and meets a lot of our criteria. But it needs new flooring throughout, the master and guest bathrooms need remodeling, and we’d like to re-side the house so that the exterior matches the contemporary interior. Look for some remodeling blog posts soon!