A big howdy from Bellevue, Washington

[Chuck Van Court]

Hello everyone!

I have been in technology and finance for over 30 years now, the last 13 years running a small but quite successful software company.  My soul mate of 25 years and I live in Bellevue Washington and our youngest has just begun her junior year in college.  We have successfully built our business together against some large, well-funded competitors, but I am most proud that we are still very much in love and have a thriving marriage.  Any of you who have worked with your spouse, especially in a highly competitive market, understand just how hard this is to pull off.  We are grateful!

I am winding down my involvement in our business and am exploring options for getting involved in real estate investing. I have just started to explore my options and have found the members of this community to be especially skilled and willing to share that hard-earned know how so important to someone like me.  My sincere thank you! 

We are fortunate to have considerable liquid assets available and are exploring investing in Washington state to begin with.   We have not settled on any one strategy moving forward. I welcome any tips or suggestions for where to start.  Lots of options clearly exist.  Multi-family? Single family?  Foreclosures?  Flip?  ...etc.   What about location?  King County is a pretty tough market, but is it headed for Silicon-Valley-like appreciation driven by high paying tech jobs?    I am also thinking about getting a Pro membership here.  Is it worth it? 

So you know: I am a passionate, hands-on kind of guy who always works hard and learns pretty quickly.  I like challenges, working with people (especially those who are honest and  happy) and learning new things.

I get that my questions are massively broad and better suited to be fully explored in separate threads, but I like "drinking from a fire hose" and appreciate any wisdom you can throw my way.     I would also welcome any direct contacts.

Thanks so much and have a super Labor Day weekend with your family and friends.

Kind regards, Chuck Van Court

P.S.  I went to Clover Park high school in Lakewood (Pierce County) and WSU and actually root for UW when they aren't playing my Cougs.  Ouch on WSU losing to Portland State today.

[Ryland Taniguchi]

Many ways to make money in real estate and you probably just need to assess where your skills are at. No matter what you do the most important skill is knowing what a good deal looks like and finding these good deals.

Cash flow in king county is pretty tough right now. There are opportunities if your willing to look out a bit like in snohomish, pierce and kitsap. I buy my cash flow properties out-of-state in Alabama and Missouri.

Flip can have high returns. Just be careful with flips if the market shifts. I'm doing 12 flips right now mostly with 50/50 JV private lenders and hard money lenders. We look for projects where the deal pencils out at 25% internal rate of return per project (6-month average and 50% IRR annualized) for our partners. Flips can be very lucrative and I know of other experienced flippers getting similar type of returns. The learning curve for flips is high and I have seen a lot of newbies lose money on flips mostly because they don't know how to figure out he After Repair Value and accurately estimate the construction costs. They often also forget closings costs (10% of ARV) and holdings costs (5% of ARV).

I like buying tax lien certificates out-of-state as a hedge against market crashes. There are no tax lien certificates in Washington. A tax lien certificate is when you pay the government for a home owner's delinquent taxes and receive a return or penalty established and enforced by the government. The risk to tax lien certificates is if you buy a property or land that is worthless. If the property value exceeds the tax lien, the government guarantees the rate of return (although not the return of investment). In a hot market like now, most people will pay-off their tax delinquencies before the redemption period expires. Usually, the properties are 25 cents on the dollar, but you rarely seen defaults in a hot market. But if the 2008 crash happened again, the default rate increases and this can be very lucrative. Simple concept but people don't due it because of the cost of traveling and the crazy amount due diligence required.

Safest bet is always cash flow but this is not the best area for that. Flips take advantage of the velocity of money and can be lucrative. I flip and develop and wholesale in seattle and use the profit to buy cash flow properties. I am currently buying cash flow properties out of state but I will probably sell those properties in 5 to 7 years in a 1031 exchange to purchase an apartment or mobile home park locally within 2 hours of here. I purchase a lot of tax lien certificates to hedge my bets against a crash.

I was flipping in 2008, 2009 and 2010. Lessons learned was to not rely on bank financing but to rely on hard money and private money instead.