New Member From San Diego

[Jacob Fabrey]

Hey Everyone,

My name is Jake and I'm a 27 year old civil engineer here in sunny San Diego, CA.

I moved here from Cincinnati, OH in late 2012 (parents/extended family still live there) for a job opportunity and have managed to save about 50k which is unfortunately not nearly enough for a down payment in SD. I have no debt and a well paying job, so I'm ready to start looking at supplementing my income with investing in rental properties.

Ideally I'd like to purchase a multi-family home outside of socal that could be managed by someone else with minimal involvement on my part. I'm also open to the idea of house hacking in SD or single family homes anywhere.

I'm extremely new to all of this so any advice would be greatly appreciated. Thanks!

[Martin G.]

@Jacob Fabrey

Welcome to BP. My first thought on reading your post is that you should start investing in Cincinnati and use what @Brandon Turner might call your "unfair advantage" and leverage your Cincinnati connections into a network that could support your investing from afar. There are already loads of investors on either coast that invest in the midwest (besides Cincinnati, Milwaukee and Indianapolis come to mind) because of the market challenges in getting started in a place like California. You could really hit the ground running with your connections here if your friends and family know of reputable contractors, management companies, electricians, etc. 

And there would be a tax advantage of investing in Cincinnati: trips home to check on properties and do research could provide tax deduction opportunities for trips you presumably already take. The recent podcast with Amanda Han gives LOADS of good advice (as I imagine her new book written with Matthew McFarland does.)

I should also mention a tidbit culled from many hours of listening to podcasts that comes from none other than @Joshua Dorkin: within an hour or so of some the most expensive markets are other, more reasonably priced markets that might provide you an entry to beginning your portfolio. Hopefully, this holds true in sunny CA.  In researching local markets, try to do as much reading of local business journals and some driving (being sure to save mileage records for your accountant) to get a feel for areas with growth potential where you can acquire properties in solid neighborhoods with opportunities for forced appreciation (i.e. improvements you can make to the property to add value and raise rents.)

And while ALL the podcast have great tips, a few of my all-time favorites are: #14 and #61 with @Ben Leybovich, #152 with Ben, Serge Shukhat, and Brian Burke, #151 with Clayton Morris, #78 and #132 with Brie Schmidt, #119 with Graham Mink, and #165 with Natali Morris. 

Congratulations on saving 50K; best of luck!