All Forum Posts by: Aaron Cunningham

According to DSNews.com the national foreclosure rate dropped by 2.5% from year end 2012 to 2013. However we are seeing interest rates trend upward, December 2012 rates for a 30 year fixed conventional laon were 3.2% and December 2013 were 4.4%. However despite the rising interest rates and falling defaults most markets across the county are continuing to see prices holding steady and even values increase from this same period last year. If the banks can hold interest rates steady we believe that 2014 will be even stronger economically than 2013.

In the last 11 years of flipping properties and training new investors in the Pacific Northwest Markets (Seattle, Tacoma, Spokane, and N. Idaho), I have noticed an interesting investor trend. The trend that I am thinking of is "buying in an area we like" or "a type of home we love", and while I am not opposed to that general line of thinking I am concerned that it may not be the best way to make money in the market. My general counsel to those that ask is "buy in an area where you can make money", don't spend so much time worrying about wether it's the neighborhood that you love, or the style of home your intrigued by. The money is green on either side of the railroad tracks, trust me, when the numbers show up in your bank account it doesn't matter what type of home or architecture created them.

Here is what I am most concerned about when flipping homes.

1. Profit Margin (will I make enough money)

2. Age of Home (older homes can take a lot more time and money)

3. Is the AREA selling? (if the neighborhood sells then do it. I'm not planning on living there, so what do I care if it's a 50k or 500k house)

4. Can I drive there in a day? (As long as I can line Sub-Contractors out on the job, I don't care if it's in my backyard or 200 miles away. For me it's all about Margin)

I know this is an older post, but this is exactly what we do! Check us out at Inlandcap.com

As a long term investor and lender in the Spokane and Seattle real estate market, I thought I would make a recommendation or two. Whether you have too many loans or are just getting started building your portfolio a local bank or credit union is a great place to go. Many times these smaller institutions are actually willing to look at you as a person and try to understand your approach to investing. We have even found that the bankers and banking teams hold a wealth of knowledge and can give great advise. My advise is "shop local" and leave the big banks to people who don't know any better.

Generally speaking each lender has their own rules/regulations regarding down payments. To my knowledge there is no hard fast down payment rule for all lenders. If your deal is an "investment" the credit union/bank is typically going to be more conservative and look for a larger down payment. I would try to "shop local" as a regional bank or credit union is more likely to think out of the box than your big banks will.

If I had the ability and this deal was as good as your showing then I would look outside a "partner" investor and try to find some hard money...your giving up a lot of profit for the use of someone's cash.

I wouldn't buy a long term hold that's older than 1950's if I could help it. I prefer 1980's and newer. Old stuff has more problems and it's tough to fix right unless without spending a ton of money. I'd be looking for a 10+ cap on the first deal, might be tough to find but they are out there.

Good thoughts. I would consider going to work for a real estate team and try to find a leader that is an investor as well. Make sure you find people that are honest and ethical to follow and learn from.

Why not get licensed and start selling real estate? It's fairly inexpensive and it's a great way to get your feet wet.

Great points!

Jason, I think it's purely circumstantial but that all parties should be cautious.

Katy, I don't think it's always a bad idea, I just think it would be wise to make sure all parties do plenty of due diligence.