My Year 2016 in Review

[Harry Zhou]

My Year 2015 in review HERE

Background: busy software engineer in SF bay area. 

Strategy 2016: Cautiously buy out of state properties, accumulate cashflow for my balance sheet (to qualify bigger loans).

Started 2016:

• 6 (all out of state) rental properties.
• Holding cash/stocks for out of state investments.

Today:

• Raised rent on 3 properties.
• Added 3 more rental properties, all in Indiana
  • Purchased 2 properties from whole sellers and remotely rehabbed.
  • Used a new loan to purchase one higher priced and newer property (remotely rehab). After rehab it was October, I experienced the longest 3-month vacancy in my investment.
• The Athens GA property continued to be troublesome. We had a 2.5-month vacancy. Refer to my last year's review for the seller.
• Connected with some experienced sf bay area investors who own properties with 6000/mo rent income. They really changed my perspective about cashflow. What if I only own 3 or 4 of these kind of properties free and clear? Isn't that a better way of retirement than owning 50 properties out-of-state?
• One of the tenants sneaked a big dog into one property and made a lot of damages. My PM did a great job handling the eviction and repairs.
• Holding 9 properties at the end of the year.

2017 Goal:
Apparently I didn't finish my 2016 goal of purchasing 4+ more SFH. Only did 3, but I am OK with that. Since deals are harder to find, I've started looking into commercial properties.

Another goal of 2016 was to close a 3plex at the start of the year. At the end I backed out of that opportunity because of continuous delay in rehab. And I believe another BPer picked it up. I am happy with that decision looking back now.

• Slow down and accumulate cash reserve. Stick with my numbers for new purchase, especially for cash flows. Getting ready for a downturn or at least a slow down in 2018. Indy market has become very expensive compared to 2015 when I started investing there. The local bay area market is still red hot and even more unaffordable.
• Diversify investments in bay area and out-of-state. 
• Explore further areas from bay area (e.g., Sacramento) for cash flow opportunities.