I live up in the Bay Area, have a nice job and a wonderful house, but still with a wife and two young kids, feels like you can't get ahead here because its so expensive. Also hard to do any real estate investing when everything is so pricey and low cash flows up here.
I'm thinking life would be much less stressful if I moved to the Midwest (ex. had an opportunity in Omaha that I passed up), got a similar job, a much cheaper house and cost of living and was able to take the cashed out equity on my house here and start doing some serious real estate investing that could allow me to retire 10-15 years earlier than I might here in CA.
Has anyone done this move out of CA, and how did it go. Am I crazy to even consider leaving the beautiful weather and so forth in CA?
The thing about the Bay Area is that rents are high and property is high. Appreciation rates are high and rent growth is high. THAT is a fact. There are high paying jobs in the Bay Area. If you are making minimum wage or the same pay that you would get in Podunk then you are probably better off living in Podunk. But if you can command the higher salaries that the Bay Area offers then with a little smarts and sacrifice then you can benefit from the high cash flow and appreciation that the Bay Area offers.
If you NEED the 3,000 sf house for $100,000 then Podunk is your place. If you NEED the acre lot with the snow mobile and jet ski and motorcycle in the three car garage then Podunk is your place. If you need equity to cover you $200,000 a year long term care then the Bay Area is where you need to be providing you invested in the Bay Area.
I've had friends who bailed with their equity after ever boom since the seventies and ALL the younger ones have regretted the move. Those that sold at $200,000 and see the same place selling for $400,000 ten years later and then $800,000 ten more years later almost cry. Friends that have bailed after retirement usually are only happy if they have extensive family in Podunk. Others complain about maintaining large houses that they feel are necessary because they are trapped in them most of the year.
you can emulate those experience's in CA no problem. Remember CA is not just LA or SF it is by far the most diverse state in the Union.. Beaches that are incredible think Big Sir Nor cal so cal.. mountains ski areas.. lakes all over the place.. Sports.. Giants A;s Angels dodgers, Chargers, 49ers, warriors Lakers and clippers... deserts High deserts. rain forests redwood groves.. Yosemite Tahoe skiing.. it just does not end.. there is no place on earth like CA in my opinion. I have done a lot of investing out in the mid west and spent a lot of time there.. I would often ask the locals WEll what do you do for fun around here since there are no real national forest's or much of anything else they had to think a while.
I do agree with all that Jay. That's why its a damn shame that the liberals have ruined that state.
I would trade the Lions for the 49er's.
Having lived in a few different cities ( including outside of the US), from my experience anywhere can be fun if you have money ...kind of like Disneyland where you get to go on all the rides. And any city will be miserable if you're broke. I think the key is to focus on aquiring enough passive income that you have choices of where and how to spend your time.
@Andrew M. My son and daughter in law moved from Santa Barbara last year to Omaha. They both have jobs with stable cos. now and have bought a 5 bdrm. home and now also have 2 rental houses. There is no way they could have done that by staying in CA. They lived there for 5 years and were stuck in a 2 bdrm. apartment and their monthly mortgage now is less than their apt. rent . The lifestyle they live here was unachievable for them there.
We have been wanting to move out of CA for a while and expect to do so within the next 6 months. The only thing about staying here is the nice weather, though it got pretty hot in SoCal this summer. Considering Dallas due to it being so central, no state taxes, realizing the property taxes are high, though everything else is much less than CA.
Anyone want to toss in feedback on their experiences with Dallas, and if they move there and did not like it, what made them leave?
If you are a renter in California and don't have a salary that can buy a house here you SHOULD leave. The only way to get ahead by renting is to buy a house that you can rent out. Rent a room for yourself in someone else's nicer house while you are making the big bucks. When your property doubles in value (usually within 10 years) sell at the peak and take your money to Podunk.
But you also have to consider, if you're young that your pensions and SS will be based on all the years of lower pay. No so bad if you plan to sit on the porch in Podunk but if you have major retirement travel planned this could limit you quite a bit.
Though I don't live in CA, I have visited many times for both business and pleasure. The climate, the variety of attractions and things to do surpass almost any other place. as others have said you can invest anywhere and still live in CA. The basis of turn key housing is that it appeals to people from out of town and is a "passive" investment. A friend of mine lives in Oakland, the other city by the bay, but has 50 properties in Oklahoma. There are turn key operators who post here and plenty of turn key clients who post here. A BP investor from SF just had a real estate broker preview a property that I have for sale here in PA.
While the real estate taxes are high in TX, there is ZERO income tax, a big plus from my perspective. Even here in PA the state income tax is capped at 3.2% compared to CA cap of 13.3%, big difference. The cost of living is also much lower here, just settled on a house this week for $16,000, needs no work and is in move in condition, as the seller de-trashed and cleaned the entire house. Is it a mansion, is it waterfront with ocean views, is it a new house with all the amenities? Obviously no, no and no. But it is in livable condition and it will be lived in without any work being done, and its not in a warzone and not in Josh's favorite town either.
@Andrew M. for what its worth...
I left San Francisco 4 years ago and moved to Minneapolis. I grew up in Chicago and Madison, WI so I was already familiar with the Midwest.
I had a fantastic job in SF. From age 27-33, I worked as a project manager for a urban developer who developed condos and apartment buildings. I made a six-figure income, but never felt like I was getting ahead. We lived in a crappy apartment in Marin. Loved the area, but always felt we had such a long way to go to ever "make it."
My move to Minneapolis was one of the best things I've ever done, though I miss California every day for certain reasons. I now work buying multifamily buildings, so the timing is great, but my quality of life here is 100% better than it was in SF.
I still have the ability to make a very, very good living here, my wife stays home (she used to work 60 hours a week in CA) with our young daughter and we have a great house in the best school district in the state.
Sure, it snows, the people are a lot less "cool" than in SF, but all in all it's been great for me and my young family. @J Scott did something similar and we discussed our moves when they were happening with each other. I imagine he'd echo my thoughts.
Love Cali life! But Oklahoma real estate can't be beat. I Invest here and then take the fam to enjoy the life out in Cali every summer.
I feel for $150-$300 per month cash flow per property at $50k properties price tags are a great way to build monthly cash wealth quickly.
@Andrew M. for what its worth...
I left San Francisco 4 years ago and moved to Minneapolis. I grew up in Chicago and Madison, WI so I was already familiar with the Midwest.
I had a fantastic job in SF. From age 27-33, I worked as a project manager for a urban developer who developed condos and apartment buildings. I made a six-figure income, but never felt like I was getting ahead. We lived in a crappy apartment in Marin. Loved the area, but always felt we had such a long way to go to ever "make it."
My move to Minneapolis was one of the best things I've ever done, though I miss California every day for certain reasons. I now work buying multifamily buildings, so the timing is great, but my quality of life here is 100% better than it was in SF.
I still have the ability to make a very, very good living here, my wife stays home (she used to work 60 hours a week in CA) with our young daughter and we have a great house in the best school district in the state.
Sure, it snows, the people are a lot less "cool" than in SF, but all in all it's been great for me and my young family. @J Scott did something similar and we discussed our moves when they were happening with each other. I imagine he'd echo my thoughts.
Answer: Yes! haha Just Kidding. To each their own.
Sean,
I wish I could have met you while I was still here. I've met quite a few developers in the area, and there are a lot of great people. But I think what you're saying about "getting ahead" is true. Hard to do without lots of saving or $200K combined income..
Can you come back to visit Cali in Nov and join the other investors coming out? (see signature). It's still a beautiful time of year to visit, and a lot of awesome people to connect with. Would love to meet you in person.
@Andrew M.
I left San Diego a long time ago. Now I live on the shore of a beautiful small lake nestled in the trees out in the country. I could never afford this lifestyle in San Diego. Clean air, trees, swin in the pristine lake in the summer, no traffic, not so many oppressive regulations.
Plus your properties will cash flow from day one.
Can't be afraid of snow & cold, though.
@Andrew M. NYC has many of the same problems. It's nice to be in the 'in' place, but as you grow in maturity and investing, other areas start calling.
When you are doing a fully cost-oriented analysis of the area to live in, it's important to think of where you might (have to or want to) let yourself slide in another area. Here is a good example:
I can complain about the cost of living in NYC. However, I own 0 cars, no pets, and live in a fairly small apartment. If I was to relocate to Georgia, we would certainly be in for 1 car, maybe 2. We would likely have more housing time and utility costs (landscaping work, air-conditioning). Furthermore, I would be taking a wage hit. This is specific to me because I still work a full-time, non-real-estate job. Given all that, the move does not save me as much as I would like. In the short term, it may cost more.
I find this index to be helpful in this case:
For the record, I do plan to leave NYC. Ultimately, it is too expensive, crazy, and over-regulated. But in the pre-children stage of life, it makes some sense to stick around.
Hello,
I moved from San Diego, CA to Charlotte, NC in 2004. I have NO regrets. I was tired of being broke all the time.
When I moved to NC, the house I purchased was less expensive than my half of the rent of the crappy townhouse I was sharing. Since I moved, I've been able to buy/sell/buy my primary residence and 3 investment properties (only recently got started in RE). There are many companies headquartered here and they're hiring! You and your family are welcome in NC!
Thanks.
Hello,
I moved from San Diego, CA to Charlotte, NC in 2004. I have NO regrets. I was tired of being broke all the time.
When I moved to NC, the house I purchased was less expensive than my half of the rent of the crappy townhouse I was sharing. Since I moved, I've been able to buy/sell/buy my primary residence and 3 investment properties (only recently got started in RE). There are many companies headquartered here and they're hiring! You and your family are welcome in NC!
Thanks.
Congrats Lisa, I know what you're talking about I just helped refinance a home for a client and couldnt believe the appraisal report when it came in! so low for all that square footage! It would have cost 600-800k for a similar townhome in a comparable socio economic area of OC, SD, or LA.
I think this thread is a good example of why the trend of people fleeing CA and other high cost/high regulation areas will continue. So I look for continued growth in a lot of the places that are magnets for these exiles.
Oh you're not crazy in the least. California is a lovely place to live as far as I can tell (I have a lot of friends back there, especially around the Bay Area), but property values and overall cost of living can be pretty harsh. I know more than one person who has considered leaving California and moving nearer to home in hopes of settling down and possibly raising a family - and not just because they'll be closer to family.
As you mentioned, real estate is notoriously volatile, and if you're a more conservative investor California is one of the last places in the country that's likely to feel comfortable. I know one (if I recall, possibly more that I'm not aware of) couple who relocated away from California and clearly miss the environment but overall feel a lot of gratitude that they can invest and save much easier in suburban Chicago than they ever could in San Mateo County.
No, your crazy for being there in the first place!!
@Andrew M. Whatever you decide to do for your family is the best decision. Yes, California has a higher threshold for investors, but that does not mean it is impossible to invest here. Creative financing and various marketing techniques work throughout the real estate industry.
As pointed out by the various investors in this post, you have many choices for investing. If the grass looks greener to you in different location then that is true for you. However, blooming where one is planted can make a difference too.
Left ( or escaped) Cali 14 yrs ago.............good riddens. Doing well and happy in North Idaho.
@Andrew M. ...Tough decision. CA one of favorites!! I lived in beautiful San Diego for 7 yrs.(enjoy outdoors) The last 8 years I spent a lot of time in the Bay area.(mountain, skiing, wine). This summer I spent time in Orange County..Wow!! I'm really considering getting a second home there...It's so BEAU:TIFUL!!.. It offers a lot. I'm always comparing it to FL, but it's different. ...Living benefits
Now on the investment side, I get more bang for the Buck in the South(opportunity cost). However, CA is in my reach!!
Good luck!
There are still many, many opportunities to both live a simple life and still invest right here in the Bay Area. Maybe I am a little bit biased because I've lived in the San Francisco Bay Area for over 25 years, but I've never really felt like I have to compete with my neighbors: for most of those 25 years, I lived in San Francisco, where I never even met my neighbors and for the past few years, I've been living in a small suburb along the I-880 corridor. The majority of the residents here a mix of immigrant families, blue-collar workers and/or retirees, but the people here seem to live modest lives and housing here still remains relatively affordable. In fact, if you don't mind putting in a bit of elbow grease or being patient and waiting for the right opportunity, you can even still find the occasional 3-bedroom house for under a half million. <-- Yes, that's right here in the Bay Area (and it's not in a war-zone)! This also means that yes, there are still many investing opportunities right here in the Bay Area too. I myself bought an investment property here earlier this year: it was a serious fixed-upper, but I'll have nice little cash flow once renovations are complete. It seems to me that many of the really lucrative real estate investment opportunities here in the Bay Area require some specialized real estate knowledge, i.e. buying short sales, long-term buy and hold for appreciation, vacation rental investing, investing in commercial real estate, buying properties with expansion potential, etc. Note that some of these investing opportunities are only available in the Bay Area or similar, high-cost-of-living markets: I don't think vacation rental investing (and also long-term buy and hold for appreciation) would work out so well in certain parts of the United States...
It definitely can be a more practical choice. But you also want to make sure you're leaving for the right reasons. Another option is to invest out-of-state which @Ali Boone does, a fellow Californian. You may want to connect with her. Best of luck!
@Andrew M. There are places with good quality of life in California, depending on your individual preferences. I live in Ukiah, about 2 hours north of San Francisco, and I love it. 35kish people. Much slower pace. Beautiful *beautiful* place. Nice weather. Not the same "rat race" vibe. A stones throw from beautiful coastline and redwood groves. People work to live and not the other way around.
My dad was a school teacher and my mom stayed at home with us. They saved and were able to "get ahead" and purchase a home in one of the nicest neighborhoods in the area.
I went to Stanford for undergrad and worked in Washington DC for a few years, but eventually decided to return to Ukiah. When I am in the city, I am confronted by all the latest fads, cars, fashions, eateries, etc. I see so much wealth. I experience much more envy. Here? Not so much. That fancy stuff doesn't make me happy, but if I'm constantly exposed to it, I want it. So it's not that goods necessarily cost more in the city (although they do), but rather that here I don't experience a desire for those goods in the first place. It makes it much easier to save money! Not to mention the real estate... It's no mid-west, but it's not uncommon for folks to take equity from their home in the bay and pay for a place here in cash.
Biggest drawback? VERY FEW JOBS.
@Andrew M. The long and short of it is: the bay area is a very specific location. You may have outgrown it... Branch out. Take some weekend trips. You may not have to leave the state - or even move to a rural area like Ukiah - to find a place where you feel like you can "get ahead" and experience a richer quality of life. Davis, Santa Rosa, Cloverdale, Windsor, Guerneville, and Sebastopol are all options that spring to mind. There are even some cute towns around Sacramento.
It's been awhile since your original posting. I'd be curious to hear an update from you!
Agreed with some of the other comments on this post in that you might want to make sure you can come back if you want to. I've lived in the Bay Area for over 20 years and many of my friends have left for affordability, better schools, etc.. I would say 1/2 of them wanted to return but couldn't. The other 1/2 were happy with the tradeoffs. I think it comes down to whether you will miss the vibrancy/craziness of the Bay Area. There really is no place like it anywhere, and I've traveled a lot. Not to say there aren't better places given your individual preferences, just that this is a unique place, both good and bad.
I own a home here so I'm pretty happy with what home prices have done and I like that I can pull equity out of my home at low rates when I want to. Don't forget you can use self-directed IRAs for specific investment purposes if you want to.
Location, location blah blah you know the story. Easier cash flow is not normally equated to profits. Profits ultimately are correlated to locations. I have not met many who believe different unless they are commissioned sales to sell you that difference.