Getting Started and Looking to Invest

Getting Started and Looking to Invest

Specialist · San Francisco, CA · Member since 2012 · 72 posts · 28 votes

Hello,

I've been interested in real estate since I was a kid. I currently work as a medical assistant and part-time bartender, saving as much as possible. My goal: to profit $2,500 a month.

I want to be an investor but not sure which route to go. I live in San Francisco, CA and it is one of the most expensive places in the US.

I initially looked in to wholesaling but I'm not sure if it's for me or not. Being that it's cheaper in surrounding areas like Sacramento. Would I be better off buying a small 2-unit building and working yet another job to pay it off ASAP so I can live off this property?

I love the idea of 2 and 3-unit properties. Having grown up in my family's 3-unit flat in SF, I feel these are some of the best investments.

As mentioned, my goal is to net $2,500/month and be able to work part-time in real estate so I can quit my 2 jobs. Am I on the right track? Also, after paying mortgage, taxes, etc. how much does Uncke Sam take out in taxes from a rental income? I've always wondered. Thank you for your time everyone and I look forward to your responses.

-Jon

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  • Real Estate Agent · Sacramento, CA · Member since 2012 · 111 posts · 26 votes
    12y

    If the property is in your own name (not an LLC), it's my understanding that the rental income is taxed at your regular rate. However, there are lots of deductions (expenses) that reduce the rental income and sometimes your overall taxable income resulting in a lower overall tax rate: mortgage interest, depreciation, water/sewer/internet bills if you pay them, property taxes, repairs/maintenance, property management...

    The is an extra benefit if you work in real estate for a living; it's not hard to read up on the details and criteria for that situation, but I don't know them off the top of my head, and I'm definitely NOT a tax professional.

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    One of the benefits of rental real estate is all the deductions you can take. Check out this Bigger Pockets blog article for more info on that topic; it's definitely worth reading more about to get educated on such things.

  • Specialist · San Francisco, CA · Member since 2012 · 72 posts · 28 votes
    12y

    So would it be better to be an LLC even if I'm just investing alone (tax purpose speaking)? My goal is to invest in 'buy & hold', 2-4 unit properties in and around the SF Bay Area for under 200K.

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