Where to invest again 500k cash flow

[Kevin Zhang]

Hi BP communites, I think I going to refinancing my home equity to take out roughly 500k for 30 year loAN and buy property for passive income. Can I some oF your input on which city to start locally in the Bay Area? Sacramento or Stockton? Single house or multi-family(duplex, triplex)? I wanted get into property that have tenants already have a good contract with them. Please let me know if you have any properties that fits my vision Thanks in advance Kevin

[Thomas Staub]

@Kevin Zhang - Posts about leveraging HELOCs and home equity are incredibly exciting. This is the moment to become a bigtime player or simply build a safe portfolio of passive income. $500K gives you so many options. 

I'd really avoid the primary markets that you mention as you're really too late unless you network and find a stellar off-market deal. Also, what is your strategy? You'd make a good deal of money by buying a distressed multi-unit 12+ units, in a B class neighborhood or a neighborhood that is up and coming, hopefully its more than 30% vacant. You go in there buy it at substantially above market average cap rate, likely around 9-10% at least, dump 10%-20% of the purchase price as capital so if you bought it for $1M, you'd put $100K to $200K into it, rehab it, stabilize new rents and tenants, hold for 12-18 months and either sell or hold and yield serious cash flow. 

A $200 to $300 plane ticket every two weeks gets you access to many other markets. We have partners making a lot of money in secondary and tertiary markets doing just this. Fly there, meet and greet with rehabbers and one local boots on the ground, then fly out every two weeks to see it thru, you could make a lot of money. 

You truly have so many options but the one that excites me the most is finding yourself a apartment complex in a distressed state and revitalizing it. You could also do a wholesale campaign to target motivated sellers for apartment complexes which gives you first access to offmarket deals. 

Wishing you success. Exciting times for you. 

Cheers