Bryan: [00:00:00] Hey guys, welcome to another episode of crushing it in real estate. This week we have Adrian Chu. Adrian is an all in one real estate professional in the greater Seattle area. Adrian, welcome to the show.
Adrian: [00:00:16] Yeah, thanks for having me, Bryan.
Bryan: [00:00:18] Definitely. Adrian, can you tell us a little more about yourself and how you got into real estate?
Adrian: [00:00:23] Yeah, definitely. I’m always, you know, I’ve grown up. I was always very interested in real estate, even as a kid. I remember back in middle school, I got a hold of the real estate fundamentals textbook. That’s the pre-licensing textbook or the real estate license. And. Just intrigued by it. I read it, you know, I remember it was like seventh-grade class.
I would, you know, when there’s free time, I’d go read the book and fast forward, um, to about 18 or 19. When I do a real course, you know, get my real estate license, you know, just always interested in investing, you know, even through middle school, high school. Or paid attention to the real estate market and the trends, and always wanted my, something of my own, you know, at some point in life.
And, um, so part of that was, you know, getting the license. And so I got the license in 2010. I was still in school at the University of Washington studying electrical engineering and yeah. In parallel, going back to when I was in high school, I tried to plan out my academic schedule too. See how I can speed up when I can buy my first property in Washington, there was a program I think there still is today called running start, which basically lets you skip the last two years of high school.
So junior and senior year of high school and you can take. No college classes instead. So I opted for that route because I felt, you know, by doing that, I could finish school earlier and get into real estate sooner. So I end up, yeah. So I ended up graduating from UDaB in 2011. I was 20 at the time. Awesome.
Yeah. And I’m starting. Working in the tech industry, because that seemed to be the logical path. You know, I studied electrical engineering and, um, I decided, okay, I’m going to work in the tech industry. So I was actually in the Bay area. Uh, San Jose actually from 2011 to 2012. That’s how I got started in the tech world.
You know, I’ve it was like, Oh cool. Silicon Valley, you know, I want to be there. So I spent a year there, 2011 to 2012, and then I ended up moving back to. The Seattle area I’m in 2012, mainly because, you know, for some originally from there, and second, there were more real estate opportunities in the Seattle area.
So now I moved back in 2012 and just really that’s when I really started. You know, real estate.
Bryan: [00:03:30] That’s awesome, man.
Adrian: [00:03:30] Yeah, but the same time it was in parallel with, you know, I’ll continue to work in tech and then I treat it, you know, real estate, both the brokerage, the investing as a second full-time job, you know, I think part of, you know, a lot of people ask me this question, you know, they have a full-time job.
How do they transition? In real estate. And the first thing people say is, Oh, how do I do real estate part-time? And my answer to them would be no, it’s, you know? Yeah. You can do it part-time, but if you really want to succeed at it, you gotta treat it as if it was another full-time job. And the big thing is just, you know, mindset and, um, how much you’re interested in it.
Bryan: [00:04:20] Definitely man. It’s a really good advice for people listening to it’s like, I feel like it’s not just bill state it’s any new that you do
Adrian: [00:04:28] with anything. Yeah, exactly. Like, you know, Asian hustle network, like any kind of, you got to treat it as if it was a full-time gig, not like a. Yeah, no, a little side thing.
It’s the energy you put into it. That really makes a difference. Yeah. So I continued, um, you know, kind of doing real estate and, uh, you know, the tech job in parallel for quite a few years, until I transitioned fully into the. Um, real estate business within the brokerage investment, along the way, I also got the mortgage license.
I’d set up the mortgage business as well to kind of provide a one-stop-shop experience for a lot of clients. And at the same time, be able to learn how to structure financing in the way that it kind of accelerates the investment side of me, yeah.
Bryan: [00:05:23] Wow. That’s really cool. Did your parents have any influence on this or is this all like a free world type of thing is that you knew you were being a
Adrian: [00:05:31] little bit?
Of course. Um, but you know, most of it is just my personal interest and
Bryan: [00:05:40] yeah. I mean, that’s awesome, man. What point did you decide that you’re going to leave tech behind and do real estate full time, right?
Adrian: [00:05:49] Three years, but the biggest roadblock for. And this applies to a lot of people when you transition from a w two job to becoming self-employed, you need, you know, for getting a conventional mortgage, you need two years of history.
So I kind of waited until, you know, I got that two years of, um, you know, solid sounds appointment history until I jumped off the tech.
Bryan: [00:06:21] That’s. Yeah, that’s really good advice too. Cause a lot of people, you know, there’s always this misconception that you were just hopping into everything two feet first when I was setting up the foundation.
Yeah. I liked how, in some ways, you kind of get the best of both worlds in your transition, which makes it a lot smoother. So I really liked that approach to man,
Adrian: [00:06:42] but there’s a trade-off, you know, it’s. It’s pretty intense to, you know, it is, you know, two things, you know, put full energy and the two completely different things.
Yeah. There’s more of a lifestyle decision too, at that point.
Bryan: [00:07:00] It is, it is. Yeah. It’s like you said before, everything’s like a mentality, you know, it’s, it’s how much you want it. If you want it bad enough, you finally make time to do it. And that goes a long way.
Adrian: [00:07:14] Yeah, definitely. Definitely. I’d say the biggest thing is really a mindset.
Yeah. I absolutely agree in supplies to, you know, any, any kind of endeavor.
Bryan: [00:07:24] Yeah. So what was your real purpose for your first real estate project light? And was it a flip, was it, you know, your real estate agent deal? Like what was the first project like?
Adrian: [00:07:37] Um, my first real estate agent deal was back in 2010. It was a.
A rental for a friend, you know, where they, they to, they had a one-bedroom condo North of Seattle and they wanted it to find the tenant. And so that was my first deal. It was like $600 a month, you know, I helped them find a tenant and it went pretty smoothly. You know, I remember just, you know, like a post, you know, did some marketing posts, some ads online, and we got like 10 people on the first showing to go see it.
That’s how I started it. And then I went off buying my own, you know, my own. Place the next deal and just kind of expanded from there. I went out with a little condo in North Seattle. Um, back then things were, um, basically priced, you know, pennies on the dollar. Um, so
Bryan: [00:08:41] what was the pricing like? And what year was this?
Adrian: [00:08:43] Uh, about eight, eight, or eight or nine years ago? Uh,
Yeah, John 12. Um, the condo itself was $68,000.
Bryan: [00:08:56] Wow.
Adrian: [00:08:56] The condo conversion, um, from, I think back in 2007, I ended up buying it as a foreclosure and, um, the previous owner paid like 200 something for it, 68. And then two years later I ended up selling it.
Or one 50 and I thought, Hey, that’s pretty good. More than the South. but you know, a little bit, I know if I waited a couple more years, if I become 300, 350,000 things are probably worth like three 50, but you know, hindsight’s always 2020.
Bryan: [00:09:35] Exactly.
Adrian: [00:09:36] So after that, you kind of moved into doing more condos and then moved into single-family homes, webs.
One thing. I kind of learned the hard way in the beginning. I thought, you know, flips are always good. Cause you know, you, you buy, sell it, you get some gains out of it. But in retrospect, I think it’s better to hold. Um, and, uh, wait for that appreciation, um, comment instead of just. Yeah, I got to learn this the hard way where I used to think, you know, fixing slipped as an investment, but it really isn’t, it’s just, you know, you’re doing some work, putting some money and doing some work and then you get a payout and that’s, that’s it.
Yeah. It’s good, you know, a component of a, you know, it fits in was being a part of an investment strategy, but I would not consider it to be an investment. I think, um, what would be an investment would be buy and hold. Properties. Yeah. Got it. You know, continue to see it grow long term.
Yeah, I agree. And sometimes too, as you mentioned before, it’s sometimes great to hold onto your properties and kind of wait for the appreciation, but you do that to pay attention to your market too.
Like you really have to understand, is it a great time to sell? Is it that time to sell it?
Bryan: [00:10:56] Every market’s different, you know, you have to kind of. Do your homework a little bit and talk to people and network and stay in Redfin, like almost every day to kind of sense the vibes a little bit to make sure that, Hey, like, is this a good time to sell?
It’s a bad time to sell. But like you said before, hindsight’s always 2020, you know, also believe in the power of now. It’s like your money that you make in that moment can be used for different opportunities. And that’s how you kind of have to think of it when you’re investing. Oh, no, I lost a hundred K if I waited two years, you know, but that money you made, the other thing,
you know, people should think,
Adrian: [00:11:35] yeah, this is the opportunity.
Cost factors. Definitely something to keep in, keep in mind. And I think that’s why having a balanced investment strategy is, is good. As you can kind of speed things up by, you know, so right now, you know, I do. Combination of several things, some new construction. I’m spec homes that I’m doing. And then I’m also at the same time, some new construction buy and hold and you know, just regular rentals as well.
The rail properties, I look for, tend to be, um, properties that have additional development potential for buying hold or to put those back.
Bryan: [00:12:18] Yeah. I mean, you’re pretty talented in real estate. You really have your hands in every single aspect of real estate. So, can you dive into that part a little bit more, right?
As you mentioned, you dive, you look for properties, with development, potential, what kind of tips do you have for people that want to enter into this type of work and feel like how do we go about it?
Adrian: [00:12:41] Yeah, definitely. So I learned this actually from doing real estate brokerage and working with builders.
No built homes to sell. So that’s kind of how I learned the building side of things. And, um, so that’s a key part of the brokerage business that I do right now. I work with a number of builders in, um, you know, sourcing the land, helping them run feasibility, and then selling the finished homes when they’re done building them.
We’re actually expanding that into Oregon. California right now as well. So applying that system, we have builders that we work within each of those markets now. So as far as, you know, finding those opportunities, Bester. Um, there are different ways to approach it. You know, when you work with a professional builder, all they want to do is they want to get some land.
They want to build homes and they want to just sell it right away. So the stuff they look for might be different than what. You know, an investor would look for anything on your time horizon. For me, I prefer stuff. That’s kind of been more up and coming areas where the zoning, um, supports, you know, additional units, but I don’t necessarily have to build them out right away.
Property works as a rental until, you know, it’s ready to be redeveloped or the. You know what I, I think it seems to work best for my case. No,
Bryan: [00:14:21] I think that that’s a strategy, you know?
Adrian: [00:14:23] Yeah. But I, I think so part of it, you know, part of building and redeveloping, if you want to look for it. Option. So they’re basically, you know, three different options.
You look for land that can’t be developed and you go through all the development, you build something new without any existing buildings on there. The other option is defined as, you know, a property that has an existing building that you can tear it down and, you know, Build a new home or build multiple units or however you want to approach it.
The third case has a hybrid scenario where there’s an existing house on the property. There’s extra land on the property where you can keep the existing house and, you know, build additional units in the extra, extra land. So those are the three kinds of common routes to go and a big thing that really makes or breaks.
This is, um, Land use zoning code. I think it’s really important to understand the zoning code. Like just know it so well that you can find optimizations that other people may not be able to. Fine right away.
Bryan: [00:15:39] So we dive into that a little bit more for our listeners who don’t know the zoning code. Sorry.
Adrian: [00:15:43] Yeah. So zoning codes. So every, um, jurisdictions or whatever, you’re in the, you know, there’s a city or something. Some areas are technically, I’m part of a County, at least up here in Washington. There’s um, you know, city and County jurisdictions, even your mailing address is a particular city, but it might not fall under.
The city limits. So you want to figure out what your jurisdiction is most of the time, it’s the city where your address is, but it’s not always the case. If you Google, you know, your city name and zoning code, usually the first result or first couple of results, you’ll see a link to a government website with a really, really boring looking tax.
And you’d want to scroll into the, um, zoning or land use section. Then in there, you, you know, you. Start reading, um, what, what it says. And before you do that, you want to find out what’s what the, um, zoning code for your property is. And then you read the relevant sections that apply to your property or the property that you’re interested in.
So, as an example, in the city of Seattle, the city recently did a rezoning about a year and a half ago where they turned a lot of single families. So on properties into multifamily. So properties.
One of the bigger opportunities, basically previously single families on lot is now multifamily. So you can fill more units there. You can tear down the house, build units, you could keep the house and build additional units if there’s an extra space. So there are a lot of options to work with there.
The city of Seattle also revamped the ADU legislation. So what an ADU is, it’s like an accessory drawing unit. It. Um, basically an extra unit that you can put on a property and Seattle revamped the code so that, um, basically any single family’s own lot can have up to three units. So that’s a pretty big game-changer too is.
Yeah. So basically any single-family home, you could turn it into three units. You could build, you know, Detached unit on there, you could build the attached unit on there. So there are a lot of opportunities there and the sweet thing is, um, in the city of Seattle, you can rent out all three units without having to live in any one of the units.
Bryan: [00:18:16] That’s awesome, man.
Adrian: [00:18:17] A lot of, in a lot of cities, when they allow you to do this, you have to live in one of the units by loosening that regulation. You basically open it up to a lot more opportunities.
Bryan: [00:18:33] Absolutely. I mean, absolutely agree with everything you said too. I really liked that, that strategy that, you know, you look for a property with, you know, building potential, you know, that’s, that’s something that I’ve been sort of doing sorta.
I mean, we always look for like an art three or something, which means that we can build like a triplex on it. You know, if we could buy like a single-family house, it’s like our three, I hope that’s like super great. Cause. Rental on that particular existing property can cover for your mortgage is all you need to cover your mortgage as you’re going through the development cycle, you know, which is an entitlement and getting permits and all that stuff.
That process itself takes like a year or a year and a half or in San Francisco. It takes two years. And if you have that existing property continuously paying off your mortgage for you, you’re a clear dude, and then you need to tear it down and build more. Now you’re popping like crazy. Now you’re not putting.
Extra money for in, in for all the mortgages, you know, that’s like really great development strategy that Adrian brought up and it’s really great that we’ve been using that strategy
too as real estate developers. You know, then
Adrian: [00:19:48] I think it’s, it’s one way to start. I mean, there are definitely multiple ways to do it.
It’s just one idea and it’s, it’s kind of an easier way to enter into it. The development space.
Bryan: [00:20:02] Definitely, man. So let’s dive into what is your most successful project and what is your least successful project and what are some lessons learned that we can learn, learn from your experiences?
Adrian: [00:20:14] Um, so I think part of it, yeah. So in 2018, we had a kind of a short term market correction, um, here in the Seattle area. And, um, kind of what happened as a couple, you know, I had a few flip projects and the new bill project, um, that didn’t sell at the time. No for the place we want it. So what happened is I ended up converting them into rentals and it wasn’t the original plan, but luckily, you know, it worked, um, you know, cash flow and it ended up fine as a rental.
So in retrospect, the lesson learned there was, is to. No has multiple exit strategies be able to rent out the home if you can’t sell it if that was your game plan. And part of that is you gotta, you know, you don’t want, it’s a higher risk to pick, you know, pick a project where your only exit strategy is to sell.
And I, I saw that you know, a lot of investors ended up in that situation where they had an expensive home that doesn’t make sense at all as a rental. So they’re kind of stuck with it or they’re forced to sell it. Luckily, you know, the projects I had, you know, they were priced in the way where. There could be multiple exit strategies, you know, renting it out.
It wasn’t the primary exit strategy, but it ended up working. So having that as a backup is always a good idea and that could be expanded upon, um, to, you know, you could rent it out to a longterm tenant, short term tenant. House. Yeah. A lot of, a lot of different possible exit strategies that kind of good to make sure that you know, for any project there’s an exit strategy that, you know, just in case things don’t fall on what you planned.
Bryan: [00:22:21] 100%, man. I agree with that statement too. It’s so crucial for real estate investors to have multiple exit strategies. Let’s give him a COBIT too, you know, it just
Adrian: [00:22:32] happened unexpectedly. Yeah. Yeah.
Bryan: [00:22:35] It’s you? Yeah. I mean, let’s say, for example, you buy a property in a property district, Airbnb, like, I hope we hope that you have other strategies like rent it out or you can sell it, you know, but honey, so it’s crazy how fast things can change too.
And you never, you can’t predict these types of things, you know, you have to just be ready for it.
Adrian: [00:22:59] And that’s definitely,
Bryan: [00:23:00] you see, people are getting smashed and with the high-end development cycle. Yeah. Especially anything over two mill in the Bay area. So it’s kind of slow now or anywhere, and you don’t have the right strategy that can you still rent it out, uncover your Memorial type of thing.
It’s like, you’re going to be in the world of hurt. You know, that’s a common theme I’ve been seeing, um, real estate investors make too. It’s like you don’t. Yeah, you wanna, you wanna like get into a deal where you like things to change. You can still ship around really quickly, you know, that’s, that’s the longevity of things.
Of course, you have projects where, you know, you call me great, you have extra money just in case things hit the fan. You can cover yourself, you know, and most of the time the margins. You know you do, most of our projects in your reserves are gone, so that’s a dangerous side to over-leveraging. So I agree.
I agree. Everything you said, man.
Adrian: [00:23:55] Yeah. So, and then a successful one. So successful project, actually, one of ’em was, you know, it was also, um, you know, the ones I mentioned earlier, the, um, least successful, not successful ones. You know how I turned that into a potential, you know, success situation was, um, You know, one of the flips, um, it didn’t sell.
So what I did right away, we were on the market for a few weeks and, you know, things weren’t looking good, you know, with the correction in 2018. And what we did was turn it into a co-living, um, Set up. So the rooming house, so in any single-family home can have up to eight unrelated people living. There
Bryan: [00:24:37] was also that,
Adrian: [00:24:39] you know, back back to zoning, even if you’re not building something, it’s good to understand the zoning code.
So what we did is basically that, you know, we turned that home into a seven-bedroom co-living um, Cash Flow from co-living is, you know, way, way above what we expected. So, yeah, so that, that house actually worked really well, despite the fact. Okay. It didn’t sell when we wanted to turn to do so. Oh, you know, rental and refinance.
And actually, you know, it works pretty well. It’s super, super hard cash flow in the middle of the city. So that’s
Bryan: [00:25:17] awesome. I mean, that’s, it just comes to show that you have to have more knowledge too, causes like the more, you know, about different strategies, like the more tools in the toolbox that you have now, you can kind of.
Shapeshift into different situations that may not be favorable for you at the time, but opens up a new Avenue for you to follow, you know,
Adrian: [00:25:41] Yeah, definitely. I definitely believe in that. I definitely believe in continuous learning and every day I’m learning something new too. And in retrospect, if I know what I know, if I knew what I know now, 10 years ago and things that, you know, be a lot different, but you know,
Bryan: [00:26:01] I’ll see you all the time. If I knew what I knew now, 10 years.
Adrian: [00:26:03] Yeah. I’m kind of continuing. Yeah, she has improved. I definitely believe in that.
Bryan: [00:26:11] Definitely. So what are, what are some of your long term and short term goals in real estate?
Adrian: [00:26:16] Uh, so right now, once you were, you know, I’m focusing more on spec homes instead of flips and.
Bryan: [00:26:26] Just
Adrian: [00:26:26] because it’s more, it’s a, it’s actually easier to build a new house than to flip an existing house. Sometimes it takes longer, but the processes and the uncertainty is actually less when you’re starting from scratch. You know, sometimes when you’re doing a rehab, a lot of surprises happen and you know, this and that.
Bryan: [00:26:47] actually
Adrian: [00:26:49] there’s actually more consistency and it’s easier to build a new home from scratch. rehab sometimes.
Bryan: [00:26:55] So yeah.
Adrian: [00:27:00] You know, from the, uh, you know, the brokerage side of the business and we’re already in the three States right now, Washington, Oregon, California, kind of growing on the niche of, you know, finding land and selling homes for builders. You know, part of our, you know, now the big niche right now. Yeah. Yeah.
Bryan: [00:27:26] That’s awesome, man. What are your thoughts? What is your biggest source of motivation? What keeps you going every single day?
Adrian: [00:27:35] I would say it’s just interest and passion and real estate. You know, I was always interested in it. Um, you know, to be honest, I was never. Interested in the tech world. You know, when I was back in school, I felt like, okay, it’s okay. I can do it, but it’s not something I’m passionate about. It’s something that I’m excited to wake up in the morning to work on.
But real estate is so fortunate to have found something that’s interesting.
Bryan: [00:28:08] Yeah. It goes a long way to mean. There’s never, it’s not always fun shooting and rainbows every day.
Adrian: [00:28:17] There’s not, lot of, um, You know, stuff, people don’t know about that. How Ken’s, I mean, it’s just, yeah, there’s a lot of stuff we have to deal with.
You know, whether it’s a renovation project or, you know, contractors, clients, you know, every day there’s, you know, stuff to kind of problem solve, you know, it’s, it’s, it’s of like, you know, part of engineering is problems and, you know, being able to. Live princes in solving problems in the real estate space.
Bryan: [00:28:54] Absolutely. You know, and that’s just where that’s when your passion has a carry Thur really it’s like your passion, the one that carries you through and rainy days.
Adrian: [00:29:04] Yeah, definitely.
Bryan: [00:29:05] You know, it was all sunny. All it’s not, anyone can do it. You know, it’s always the bad times that really tests you like, Hey, how passionate are you?
Can you keep on pushing, you know, Yeah, I think, you know,
Adrian: [00:29:18] The, um, not so great, you know, scenarios are the best, um, kind of learning experiences.
Bryan: [00:29:26] Yeah. I mean, that makes it any fun theater, everything, and anything come too easy. Can I take it for granted?
Adrian: [00:29:33] But the most important thing is to be able to reflect on, um, after situations, and being able to.
Bryan: [00:29:43] Yeah, that’s great, that’s a great point. You brought up too, you know, it’s a reflection on something important in anything that you do, especially real estate, you have to learn from your mistakes quickly because when opportunity comes, it comes fast and you have to be ready for the next one, you know, over and over. Yeah.
Adrian: [00:29:59] Definitely.
Bryan: [00:30:00] Definitely did. Um, what is your favorite book podcast, or any medium that you draw inspiration from?
Adrian: [00:30:09] Um, well, a recent book I’ve read, uh, E-Myth I think is a pretty popular book. I think it’s, it’s got good information for anyone wanting to grow a business and. Definitely. At least for me, it takes a lot of time to try to implement those in real life.
They’re good ideas, but I think it’s got some good ideas in there and, you know, implement more of them. Yeah.
Bryan: [00:30:40] I mean, you mentioned a great book because it kind of teaches you how to, how to grow your business without you actually being there. You know, it’s really important that you know, your business can survive without you.
And that’s kinda like the best mentality to sort of have moving forward when you create your own empire.
Adrian: [00:30:59] Right? Yeah. Easier said than done.
Bryan: [00:31:02] It is because, you know, as entrepreneurs, you are very hands-on with a lot of things,
Adrian: [00:31:08] right.
Bryan: [00:31:08] You relinquish control. It feels like it kills you inside. You know what, man, I can be a lot better, but to scale, you need a team, you know?
Adrian: [00:31:19] Right. Exactly. Yeah. Okay. Hey. Yeah.
Bryan: [00:31:23] So final question. How can our audience learn more or find out or contact you?
Adrian: [00:31:31] Uh, well, um, Facebook is a good way to do that. Uh, and hustles network, Facebook group, you can find me on Facebook. Uh, Google, you can probably find my phone number online and email too. So,
Bryan: [00:31:46] and your address
Adrian: [00:31:49] as of all real estate people, right?
Somebody’s name popped up. So, you know, feel free to reach out in any, any, um, medium. I’m happy to chat. Um, I’ll learn from each other. So
Bryan: [00:32:01] definitely, man. Hey, thank you so much. We appreciate
Adrian: [00:32:04] it. Yeah. Thanks, Bryan. Appreciate it.
Bryan: [00:32:06] Yeah, thank you.
Adrian: [00:32:07] Okay, well have a good one. Bye.