All Forum Posts by: Kai Van Leuven

Brooks, I have tried to develop a relationship with a local bank. They are usually able to do some pretty flexible things. I work with a really small bank that will be creative on any deal and try to help me out. Best of luck.

That is how the Seattle City Council Theocracy is run. They project their religion (social justice) on the city and try to have it run the whole state. I hope this is a pendulum swing that is to the far left and will change over time... with Sewant in office I am really doubtful that we will see it swing anywhere near “center”.

Collin, I own property in the Seattle area and did before getting on bigger pockets. These are my thoughts about their rules. 1% rule- although I have hit it on every property I have purchased I don’t think it is that important. There is a balance between cashflow and appreciation. Properties in good cashflow areas don’t appreciate well. The opposite is true. Seattle is an appreciating area. 50% rule- I have never been close... not even remotely close to this rule. If you are buying 10k-50k homes in the mid west and south than I am sure that 50+% works for cap ex. No way does it work in the Puget Sound. I am not dropping 10k a year on home improvements on rentals. This is another over generalization that is thrown around on here. ^^^ both the rules above are so inaccurate that I think they are almost completely worthless for just about anyone, anywhere. Know your market, track it well enough to know you are getting a good deal, and pull the trigger when the right property comes up.

Tyler, I am in the Seattle area (Snohomish/Skagit County). It is the best place to invest in the world! What I would suggest would be to really study the market on where you want to end up. 2-4 is insane price wise. There are some values out there but I think that if you educate yourself on the market and get everything financially in order you will be better in the long run. In my opinion there is very little that will cash flow right now in multi family for the Seattle area. I would not just throw my money at a place as an “investment” when you will probably have a negative cash flow. What no one has mentioned above is that you go with a <20 down payment option you have PMI. That is going to kill your cashflow. Your fist few properties have to be homeruns so you can tap into the equity to keep growing. I would save up. Track the market, look at what things are selling for, how fast, price per unit, rents in those areas, and be 100% confident. I have waited years for good deals. Sometimes that is as long as it takes.

I could not disagree with the original poster more. Places in the Midwest and South will bump along at the same prices for a reason. Just because something costs less does not make it a good “value”. It is naive to think that there is not someone in that mid west/south market with way more knowledge, money, and experience. Doesn’t it seem like folks are trading their inexperience in one market for another? Just because a house costs 8x less does not mean it’s a good investment. Does a roof cost 8x more? Plumbing? Drywall? Get ready for CAP EX to be at 50% plus!!!

Jaden 2 years would be a mistake. I think you would bear too much market risk with rates. I would negotiate a 5 year with a 6 percent. Also, is the 4% assumable? It sounds like it if both are privately held. 

Make sure the cash flow is there. One thing I did not realize with 10+ Unit purchases is that you really multiply your problems. I have always thought if something goes bad on a house “so what, I can run to the store”. You start multiplying that by 10 or 14 and your maintenance/cap ex goes way up.

Seems like a good deal. 4 and 6% are good rates. When do either of the loans ballon? Anything less than 3 years is too short. I just paid 6% for a commercial deal. Might want to look and see if the 4% can be assumed and doesn’t have a due on sale clause. If it is anywhere near SLC that area is really growing. Also you can’t beat 5% down. Any bank will require between 20-35% down. Good luck!

Nick, you are about to start a great journey at a stellar age. When you are young your greatest asset is time. I was in the same position when I was young, good credit, some savings and a lot of ambition. This is what I would do if I could do it all over. 1. Pick a trade- Personally I would have become an electrician. It’s a great high paying job and you get to work on your own places! 2. Get a mentor- find people you look up to in the real estate area and pick their brain. I usually started like this “I think you are a genius at _____, can I take you out to lunch”. 3. Keep saving your money until you can buy on your own. 4. Study the market like crazy. The more focused the better. Become familiar with pricing, public records searches, tax assessors sites, just fill your brain with all things real estate. 5. Don’t let someone dictate your course. I have had bankers tell me that I was too young to do something. I politely told them to “kick rocks”. Look good on paper and deal over the phone. When I was in sales I knocked on mans door who was completely uninterested. He told me “we live in the greatest country on earth, there is so much opportunity that if you keep moving you will be successful”. For some reason that stuck with me at 22 and I have pushed every day to crush it.

@Joseph Thompson I am not a big fan of partnerships. It never works out to be a 50/50 split on work/effort/skill, ect. It is impossible for that to happen. I have been asked by tons of people to partner with them. The problem with people looking to partner is that they feel like its a security blanket for them. I think it makes you less flexible to make choices and fully take on a project.

 These are a few partnerships you may not have thought about;

Real Estate Agent: They are already getting paid for helping you. The only problem with agents is that they are "a dime a dozen". This should be your #1 partner. They get compensated well for helping out. I would interview a ton of them. Look at who is the real mover and shaker in that space in your area.

Mortgage Broker: To a lesser extent they can help out. They have really way too many files to be as helpful as your agent. Some can be really great.

Friends and connections: I have a group of 4 or 5 people that have helped me out with my investing. They have all been successful and made it happen. At any time I can call them with problems and they will give me advice. That goes both ways.

I don't like giving away 50% of the profit to anyone. The way I look at it, no one will work on a property harder than I will. Why would I want to drag someone along.

Save more and take a lot of people you want to be like out to lunch. I would try to find a landlord/builder/whatever you want to be and pick their brain. It will be a lot less expensive and give you very targeted information. Sometimes the seminars are abstract and don’t give what will work in your market.