Investor & soon-to-be Realtor from Seattle, WA

[Jake Faris]

Hello BP community!

Thanks for providing an amazing platform for a semi-investor like me to learn the ropes of REI with the impressive quality of people and breadth of strategy/tactics that are so easily accessible.

As for a little background, I'm in sales/business development for a software startup and have been living in Seattle for over 10 years. I purchased my first condo in mid-2013 for $215k soon after graduating from college, and could not stop myself from checking new listings months after moving in. My genuine interest in REI, along with positive market conditions in Seattle and low interest rates, led me to take action, as I recently purchased an owner-occupant condo. Since my purchase in March, similar units in my building have recently sold for 15-30% more than what I paid. My plan is to update/modernize this condo and rent it out next summer (we're close to the University of WA) - my first condo is already rented with positive cash flow.

Although I'm happy with the position I'm in and how things have unfolded, my only regrets, with the obvious benefit of hindsight, are:

1) Purchasing my first condo with a "consumer" mindset (what are MY neighborhood requirements, how long is MY commute, etc.), rather than with an investor mentality (what is the expected appreciation rate, what are the rental comps, etc.)

2) Purchasing my second condo with a realtor, as opposed to getting a license and completing the transaction myself

#1 is no longer an issue as I've shifted to investor mode. As for #2, my immediate plan is to become a licensed agent and transact through my friend's brokerage firm. Although I still have so much more to learn and experience on my REI path, I'm confident that I can reap the financial benefits of becoming licensed and purchasing my own properties. I already did the majority of the work for my second condo as I scoured Redfin and Zillow listings for the best property; I went to the open house and initiated the negotiation process with the seller's agent; and I outlined the details of the offer. Next time around, I'll get paid for all the extra legwork.

In addition, being one of the first to buy multiple properties among my friends, there's also the possibility of buying and selling as their agent since some are already coming to me for advice. A missed opportunity by my agent when I purchased my first condo was not educating me on the potential investment strategy, although I take most (OK, all) of the blame for this. REI is not for everyone, but understanding the potential upfront would've been immensely helpful in making my first real estate purchase.

A couple questions I have are: 

1) Where's the most cost-effective place to fulfill the real estate education requirement for Washington?  My friend with the brokerage firm suggested the Rockwell Institute.

2) As a WA licensed agent, is the education requirement to be licensed in OR and/or ID waived?  I find the Portland market particularly interesting from a Buy and Hold, and Flipping standpoint.  Can't seem to find an answer online so hoping someone here has had a similar experience.  

Anyways, my introduction went much longer than I expected, but thought it'd be best to provide a comprehensive bio in a single post. Thanks again and looking forward to learn, network and contribute to an already stellar community of people that share my REI passion!

Thanks,

-Jake

[Ryland Taniguchi]

Welcome to BP. Here are some answers to your question.

1) $100 off RE school at realestateschool.org. I think the price is $299. I send my agents there and it is the best deal in town. I am your sure your friend's brokerage may have an account there (or just mention Keller Williams).

2) Honestly, I would focus on just Seattle and maybe even one zip code to start. Spreading yourself too thin won't get you anywhere. In hot markets like this, the only way to find a deal is highly specialized knowledge like knowing the path of growth, land use and zoning and knowing block by block in a neighborhood.

As a realtor with a team of 8 agents at Keller Williams, I don't think I am biased when I say that 99% of agents don't understand investing. Be careful with the realtor thing as it can sometimes interfere with good investment analysis and many of the peer pressure that you get as a realtor can distract from fundamentally solid investing. 

Personally, all of my investment mistakes have either come through realtors or he auction. Be careful.

We makes offers on literally thousands of MLS and the numbers are about 700 offers to get a flip that fits the 70% of ARV minus construction cost numbers. I backed out of the last three MLS offers that we got accepted. One was listed at $185,000 and I got my offer accepted at $128,000 only to find with more detailed analysis that the property was only worth $145,000.

Best wishes!