Starting Out in the SF Bay Area

[Charlie Huynh]

Hey everyone, I've decided to get into real estate investing and have started to do a ton of due diligence and research on the topic. I have gained a lot of information here on BP and wanted to thank all the contributors on this forum. I believe I am ready to take the plunge into REI with all I have learned from my studying.

I currently reside in the SF Bay Area, CA (San Jose to be exact) and thus it will be difficult (near impossible) to find REI properties that cash flow well (10%+ cap/25%+ COCR) in my home territory. Moving is currently not an option as I have a full time job here locally that I enjoy and plan on keeping for a while.

Before I start diving into a marketing plan looking for deals I want to pin down a target area. Thus my plan for my first REI property is to look for homes/*plexs somewhere in the Central Valley, about 1-2 hours driving distance (i.e. Tracy, Modesto, Stockton, Sacramento). I took a day trip to Tracy/Stockton/Lodi/Antioch/Pittsburg over the weekend and visited a bunch of homes I found on Zillow and stores/shopping centers in each town to get a feel for those areas and the people. They didn't seem too bad. Even the worse neighborhood in Stockton I didn't feel like my life was in danger (there was kids playing out, but it was the middle of the day and I just drove around the supposedly worse "hood" in Stockton called "Kentfield"). Anyone have any experience of REI in this region of CA? My concern is the economy is really bad in these parts; like 20%+ listed unemployment and high crime indices (source: city-data.com). Do you guys think it would be a good idea to start out with my first property 1-2 hours away? Or is even out of state viable for a first timer? I have decided to allocate a sizable chunk of cash starting out in REI, but want to minimize the cash risk starting out and will definitely be extremely patient in finding that "awesome" deal for my first investment.

Also does anyone have any recommendations for good REI clubs in the SF Bay Area (in particular the South Bay). I went to rei-club.com/creonline to search the directory and started going to the meetings of this club called "SJREI". Those meetings were really good, I started networking with a few folks already there and the speakers were really informative, but I want to see what else is out there before I actually join a club and fork over full dues.

Thanks again.