Just starting out. Would appreciate some advice

[Kenny Kagawa]

Hey guys, I am from Southern California where the median home is about 300k. I am very interested in investing in real estate. I am probably in a different boat than many people on here. I am a pastor (ordained) working at a church/college and I live in a church condo (parsonage). The housing is seen as part of my compensation (which is tax exempt) and not reported as income. My take home is relatively small (about 25k) not including my housing compensation. The church also provides for my utilities and food. I know I am in a very unique position and I am very grateful. My wife is a nurse but she only works a few days a month. Needless to say, we have a pretty high savings rate. I'm also exempt for Social security ( meaning I don't pay into it anymore- so I will not collect much come retirement age). I would like to create some avenues of passive income. I'm hoping that home values will come down a bit in the next year or two. I would like to buy a SFR as an investment/rental property and still live in the church condo (rent free). Any advice would be greatly appreciated! It seems like taking the first step is always the hardest. I'm also open to other/better ideas.

[Sandra Lei M.]

@Kenny Kagawa

Welcome to BP! We're happy to have you here and making connections! If you have questions all about BP, please feel free to reach out and I would be glad to help you! 

Happy Investing!

[Christine T.]

Welcome Kenny!  Yes, the first step is often the hardest.  Good to have you here.

[Cynthia Hartley]

Hi @Kenny Kagawa, 

Being on BP is a great first step. There are scores of resources here from which you can learn. Just look under the education tab. Also, listen to the BP podcasts. I listen to them when I am driving to work, at the gym, working in the garden. I listen to them at 1.5X speed on my iPhone so that I can listen to more in less time. I've listened to almost all of the podcasts twice and when I'm done, I will start over and listen to them a 3rd time. I am always learning something new, even if I've heard the episode before. 

Also, figure out what type of property you are interested in? I just bought a SFH in DC and plan to convert the basement to an accessory apartment. There are few, if any, multifamily units in DC. On the other hand, my sister just bought a duplex since Albany has a ton of those. It's easy to get distracted when you try to look at everything.

Keep in mind that just because you live in Murrieta, doesn't mean you have to invest in Murrieta. Look in areas that are within a two hour drive from your house. I live in DC and invest in DC and Baltimore. My sister lives in Bloomfield, NJ and invests in Albany. On our respective drives, we listen to BP podcasts :-).  

Based on my own experience, a key factor is patience. Take time to learn your market. Look on various realtor websites such as Redfin, Zip, Realtor.com, etc. to see what prices are like for the type of property you like in different areas you like. Use the various BP calculators to analyze the properties. You should soon get a sense of what a financially sound investment looks like. Then, when you find a property, you can pull the trigger with confidence. 

Those are just some basic thoughts. There is certainly a lot more that goes into investing such as financing, finding a RE agent (preferably one who is an investor and works with other investors), etc.

Good luck. 

[Peter Mckernan]

@Kenny Kagawa

Welcome to the site!! You have come to a place with a huge audience that welcome you with investor friendly open arms!! 

You do have a unique situation and it sounds like it will be a great unique situation that helps you save a great deal of money. There are a couple avenues to go for retirement savings as you know, which are Mutual Funds and real estate. Real estate seems to be your push and it is a wise option. I would suggest working to save as much as possible and if you are planning on waiting a, "year or two," I would start to research the areas you want to be within.

Once you have a solid foundation of knowledge and area expertise, then you can pounce on a deal or most likely two! All I can add is make sure you have built the framework for investing with great knowledge, and at that point you will be head and shoulders above 95% of the competition! 

[Christine Sykes]

Welcome Kenny! I'm new as well, and am finding BP to be a wonderful community.

[Eric Hulstrand]

Kenny,

Great to have you here! I also am a pastor/investor. Since your work has something to do with a college, I wonder about looking into some type of student housing. If you know students, or if you are going to grow into knowing more and more students, you could have a steady flow of reliable tenants for the time that you live there. Maybe start peeking around at possible places, get to know the area? You never know when you could offer someone a contract for deed. I found both of my 4-plexes by nosing around and asking "who owns that?". They originally weren't for sale, but when I asked, things started to move and I was able to buy one on a CFD.

With not having SS, having some rental income is a wise idea.  Keep in prayer about it and when you find something that fits, make sure to run it by some wise counsel.  But by all means be willing to pull the trigger when the Holy Spirit gives you and others you trust a green light!  It's work, but worth it.