Newbie from the Bay Area!

[Jimmy Liu]

Hi All,

My name is Jimmy and I'm new(ish) to real estate investing! I'm a 25 yr old who recently moved to the Bay Area, CA for a job to turbo charge my W2. Last year, I bought a condo in the area with an extra room I'm renting out. So not completely green but the year has definitely been small trial by fire, drinking from the fire hose experience. Currently learning & reading a ton. BP has been super helpful on this. 

With some income saved up (~60k), I'm hoping to get into purchasing additional real estate soon. My primary target is out of state as I want to jump right in and find cash flowing rentals and NorCal market isn't the greatest for this. Budget is up to ~300k based on my DTI. I also have the ability to save ~1-2k a month based on my budget. I'm looking primarily at Kansas City, Indianapolis, and Pittsburgh. I'm reading David Greene's book too on the topic!

Questions I'd love to get feedback on.

• What are the differences between SFH & small multifamily? What would you recommend starting out with? Given that I'll be looking to put property management in place, I imagine the actual operations would be minimally different. Though I've also heard that there are some differences in terms of lending.
• Given that the property won't be owner occupied, I am thinking that my only option is to put 20% (or more) down. Is this correct?
• I've looked for deals in more affordable areas in Northern California (Sacramento, Merced, Stockton) and none of them make sense as initial investments due to poor cash flow. It seem that without growing income, scaling up will be slower. Has anyone had success in buying in these markets? Especially with my budget. 

I understand that the first deal is really important to build momentum and so I'm excited to get started! I'd love to meet y'all.

Best,

Jimmy

[Jimmy Liu]

Originally posted by @Patrick Bavaro:

@Jimmy Liu hey Jimmy! Welcome to BP! Your story sounds very similar to mine here in SoFlo. I too house hacked my primary property and drank from the fire hose. My first tenant actually ODd and I had to perform CPR while waiting for paramedics! Pretty wild and I learned a lot 😬.

Anyways, I am investing out of my market as well and my first purchase this year was through rent to retirement on a new build in Cape Coral FL. CApe coral is simply exploding with out of state people moving there and low price points. The new build cost $265k in total, required only 10% down, and has rents at about $2300 right now. Post construction appraisals are also between $340k and $410k depending on location. Would be happy to connect about my experience if you’d like. I felt safer going through a turnkey company for my first out of market rental. Good luck!

Patrick

I've definitely seen Rent to Retirement's new construction opportunities in Cape Coral! I've considered Turnkey as well and have spoken to some of the folks at Rent to Retirement. Let me connect with you 1:1 as I have some questions about your decision.

Thanks for sharing!