Newbie from Seattle, WA (possibly Orange County / Fresno, CA)

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Newbie from Seattle, WA (possibly Orange County / Fresno, CA)

Royseve Zamarripa
Seattle, WA · Member since 2016 · 6 posts · 0 votes

Hello-

My name is Roy Z. I am 29 yrs old and I currently work at a due diligence firm doing project management. My wife and I moved up to Seattle from Santa Ana, CA for her Tech job about a year ago.

I personally have no experience in real estate, but am very eager to learn and to see if this is right for me. I stumbled onto this site while browsing the web and have been captivated since with podcasts and beginners' guides. Now I am here introducing myself, hoping to participate on the forums and learn from the pros and possibly getting some mentors along the way.

As for my goals, I want to purchase my first property in 2017. Possibly a duplex/triplex and house hack, while taking advantage of FHA. Definitely tired of throwing away ~$25K/year on rent. By year 5, I want to own 3-5 single family homes/duplex/triplex. By year 10, I would like to possibly look into larger multifamily units/commercial properties and have enough cash flow to quit my job and do this full time.

The reason I listed 3 separate cities in the title, while I currently live in Seattle, our plans are to move back to SoCal in 2-3 years. I listed Fresno, because I have a lot of family there and the market is a lot cheaper.

As I said earlier, I am very eager to learn and would like to meet like minded folks. 

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Patrick Britton
Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
9y

@James Babb

While I think that wholesaling in King County is overdone, I do not believe the case to be true of Snohomish, Skagit or even Pierce County.  I know several individuals who make a very good living wholesaling properties out of Marysville, Everett, Mount Vernon, Bellingham, Tacoma, Blaine and other areas.  So if you are set on giving that a try I would focus on counties outside of King.

What a more advisable/effective vehicle for a new or aspiring REI is will depend on a lot of different factors. Quite frankly, I think you should just find something that you enjoy doing and/or are passionate about. Whenever it is, just be sure to be consistent. Persist, don't give up and don't be distracted by other shiny objects along your path to success.

Although a little bit riskier in nature, it may be worth considering an aspect of real estate investing that very few people partake in.  For instance, you could fix and flip mobile homes, trailers and manufactured homes.  You could flip land.  You could buy a decrepit four unit multifamily and turn it around.  You could buy fixers ideally suited for air B&B.  There is a plethora of options out there.  Just find something that you like.

To answer number 3.)  I remind myself of the same question the people of Vancouver and San Francisco have asked themselves year after year.  Those markets have seen steady increases consistently for about 15 years.  Sure, there was a minor bump in 2008 and 2009, but prices continue to go up and there is absolutely no evidence or data to support a slowing or reversal of prices. Quite frankly, this question is best answered by taking a good hard look at your level of risk tolerance and capital.  Your money will go a lot farther in the more fringe areas but that does not mean that you returns will also go farther.

Also, you could try the Gartman-maneuver to answer this question.  In short, Dennis Gartman was a stock market guru of sorts who in 2006 or 2007 took a cab in New York City during which the driver told him that he was moving all of his money out bonds and into gold.  Gartman realized that the general public always buys high and sells low and went on television that day to announce he was liquidating his gold positions.  Long story short, it was a good decision.

So, you may consider canvassing the general public for their opinion.  Next time you have your haircut, see the dentist, take a cab, order a drink from a bartender, or anything else ask that person if they think investing in Seattle real estate is a smart move.  The answer your to your question will be the exact opposite answer these people give you :)

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  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    9y
    You are not throwing away your money on rent. That dogma that is incorrect. Why buy a primary resident when you can 4x the returns buying investment rental real estate?
    2Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    9y

    @Royseve Zamarripa in simplest terms, i think you should rent if you MUST, but own if you can. And i should add that the biggest regret I hear from the more experienced real estate investors is that they didn't start early enough.  

    1Reply
  • Royseve Zamarripa
    OP
    Seattle, WA · Member since 2016 · 6 posts · 0 votes
    9y

    @Patrick Britton @Lane Kawaoka Thanks for the advice. I don't want to make it seem like the reason I want to get into real estate is because I am tired of rent. I just meant that I wanted to use the money I would normally use for rent to payoff my property, rather than putting it into someone else's pocket.

    Right now I am focusing on learning and figuring our what would work best for me, nothing really set in stone. I know there are a lot of ways of making money in real estate, but I am a complete newbie. Any advice would be greatly appreciated. 

    0Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    9y
    Originally posted by @Royseve Zamarripa:

    Hello-

    My name is Roy Z. I am 29 yrs old and I currently work at a due diligence firm doing project management. My wife and I moved up to Seattle from Santa Ana, CA for her Tech job about a year ago.

    I personally have no experience in real estate, but am very eager to learn and to see if this is right for me. I stumbled onto this site while browsing the web and have been captivated since with podcasts and beginners' guides. Now I am here introducing myself, hoping to participate on the forums and learn from the pros and possibly getting some mentors along the way.

    As for my goals, I want to purchase my first property in 2017. Possibly a duplex/triplex and house hack, while taking advantage of FHA. Definitely tired of throwing away ~$25K/year on rent. By year 5, I want to own 3-5 single family homes/duplex/triplex. By year 10, I would like to possibly look into larger multifamily units/commercial properties and have enough cash flow to quit my job and do this full time.

    The reason I listed 3 separate cities in the title, while I currently live in Seattle, our plans are to move back to SoCal in 2-3 years. I listed Fresno, because I have a lot of family there and the market is a lot cheaper.

    As I said earlier, I am very eager to learn and would like to meet like minded folks. 

     Hello and welcome!

    It sounds like you are off to a great start with your planning. Just keep doing your research. It sounds like you are on the right path!

    Good luck to you!

    0Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    9y

    @Royseve Zamarripa Sorry for the misunderstanding.  I can empathize with your position on rent :-)  fortunately, in this business there are many different ways to make a living.  But I would caution you against wholesaling given that King County is overrun with them.  I guarantee if you go to a local real estate investors networking group, at least 25% of the people will consider themselves wholesalers and I guarantee only one or two have ever done anything that made the money.  Not trying to dissuade you but this is simply the reality of the market in King County.

    0Reply
  • Royseve Zamarripa
    OP
    Seattle, WA · Member since 2016 · 6 posts · 0 votes
    9y

    @Tom Ott Thanks for the words of encouragement! I am definitely in research mode and know I have a ways to go.

    0Reply
  • James Babb
    Wenatchee, WA · Member since 2016 · 8 posts · 3 votes
    9y
    Patrick Britton That's interesting! I'm also in Seattle... and I actually moved up here from Fresno in 2013. Just in the short time I've been up here, home prices and the cost of development/construction have shot up at a pace I've never seen before anywhere. A lot of people have told me to be very cautious of investing in real estate up here because we could be seeing the bubble pop in coming years. I'm just not familiar enough with the history of this market to know if there is any truth to any of that. Anyway, your response brings to mind a handful of follow-up questions: 1. If not wholesaling, what is a more advisable/effective vehicle for a new or aspiring REI in the area who is looking to just get off the ground? 2. I realize you're speaking specifically to the merits of wholesaling in King County. But what about the surrounding counties? Snohomish, for example? 3. With prices so inflated in the Seattle area, is it even a good idea to enter the real estate marketplace up here? Are there good margins to be made? If one were to have strong ties to a place like Fresno, CA, would a potential flipper or even buy/hold investor be better served focusing elsewhere instead of Seattle? Or would you recommend just focusing on more fringe-type neighborhoods like Renton or Kent? 4. Is one community better suited to the flipper while another might better serve the more long-term buy/hold investor? Have any specific recommendations? Thanks!
    2Reply
  • Royseve Zamarripa
    OP
    Seattle, WA · Member since 2016 · 6 posts · 0 votes
    9y

    @James Babb Great questions! I hope both Patrick and Lane could share their insights on the Seattle area. My intention was to house hack, but there seems to be a shortage of good deals, with most going well above listing!

    @Patrick Britton 

    @Lane Kawaoka

    0Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    9y

    @James Babb

    While I think that wholesaling in King County is overdone, I do not believe the case to be true of Snohomish, Skagit or even Pierce County.  I know several individuals who make a very good living wholesaling properties out of Marysville, Everett, Mount Vernon, Bellingham, Tacoma, Blaine and other areas.  So if you are set on giving that a try I would focus on counties outside of King.

    What a more advisable/effective vehicle for a new or aspiring REI is will depend on a lot of different factors. Quite frankly, I think you should just find something that you enjoy doing and/or are passionate about. Whenever it is, just be sure to be consistent. Persist, don't give up and don't be distracted by other shiny objects along your path to success.

    Although a little bit riskier in nature, it may be worth considering an aspect of real estate investing that very few people partake in.  For instance, you could fix and flip mobile homes, trailers and manufactured homes.  You could flip land.  You could buy a decrepit four unit multifamily and turn it around.  You could buy fixers ideally suited for air B&B.  There is a plethora of options out there.  Just find something that you like.

    To answer number 3.)  I remind myself of the same question the people of Vancouver and San Francisco have asked themselves year after year.  Those markets have seen steady increases consistently for about 15 years.  Sure, there was a minor bump in 2008 and 2009, but prices continue to go up and there is absolutely no evidence or data to support a slowing or reversal of prices. Quite frankly, this question is best answered by taking a good hard look at your level of risk tolerance and capital.  Your money will go a lot farther in the more fringe areas but that does not mean that you returns will also go farther.

    Also, you could try the Gartman-maneuver to answer this question.  In short, Dennis Gartman was a stock market guru of sorts who in 2006 or 2007 took a cab in New York City during which the driver told him that he was moving all of his money out bonds and into gold.  Gartman realized that the general public always buys high and sells low and went on television that day to announce he was liquidating his gold positions.  Long story short, it was a good decision.

    So, you may consider canvassing the general public for their opinion.  Next time you have your haircut, see the dentist, take a cab, order a drink from a bartender, or anything else ask that person if they think investing in Seattle real estate is a smart move.  The answer your to your question will be the exact opposite answer these people give you :)

    3Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    9y

    @Royseve Zamarripa House hacking in Seattle is a tough thing to get into.  As you pointed out, most properties sell well above initial listing price which squeezes margins down to nothing.  It is my opinion that house hacking is one of the very best real estate investment strategies but the location will be of paramount importance.  If you are in a position to house hack properties 30 – 45 minutes outside of Seattle ( North North or South - not East) you should find more opportunities.  

    Of course, you could always look to a realtor and get a list of expired, canceled and temporarily off the market properties, not to mention the ultimate: sale fail release, which are properties that were under contract but when the buyer backed out the seller canceled the listing.  Those are some of the very best deals you can find.  Every now and then, I look at listings that were canceled or expired back in 2012-2014 but have yet to go back to market.  These are people who tried to sell a but for one reason or another didn't and have decided not to try again.  Get a realtor to contact these people and you could be pleasantly surprised by the results :-)

    And of course, you could always try the auctions!   Just be aware that you will be swimming with the sharks :)

    1Reply
  • Anthony Giannette
    Residential Real Estate Broker · Renton, WA · Member since 2014 · 87 posts · 33 votes
    9y

    While wholesaling is better on the outskirts of King county. Rents have climbed 30% or so in 2016 alone! Renton was renting at 1200 or so in 2015 but nothing is available now under $1500/mo. It's a great area for investors since housing and rents are rising together. It's an odd combination when both markets flow with each other like this.

    0Reply
  • Ruth Bayang
    Investor · Kent, WA · Member since 2015 · 624 posts · 274 votes
    9y

    Welcome @Royseve Zamarripa. I moved from Fresno 17 years ago :)
    Learn all you can from BP then decide what you want to do. How to get started is different for everybody, depending on your goals, finances, life situation, etc.

    There is no right or wrong. Seattle can be a challenging market but there is still money to be made. If unsure, post a question here and I'm confident you'll get your answer.

    1Reply
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