Investor/Realtor eager to learn more!

[Jonathan Gilkeson]

Hello Everyone,

I'm excited by everything that bigger pockets has to offer, and I'm happy to reciprocate with any real estate knowledge on my behalf. I'm a residential realtor in Santa Barbara, Ca where I was born raised. It took me moving away for 8 years to realize how good it was here so I moved back about 2 years ago and started working with Keller Williams and the Zia Group. I've been in the industry for 4 years, but it wasn't until I moved back to Santa Barbara where I started to see success, selling 11 homes in my first two years. Much of my success has come from traditional door knocking, hitting the pavement nearly every day. Almost 70% of my business has come through door knocking.

I didn't join bigger pockets to drum up more business, although that would be great if it did, I mainly joined because after browsing the website a couple times and reading some forums I could tell that it was a great community of like minded people that were willing to share and help each other out. I'm actually looking to invest outside of California, because the price of entry is so expensive here, and I've found that you can often get better returns elsewhere. So I'm always eager to learn more and see what kind of tips and advice we can share with each other. I've already posted a forum, but if anyone has any advice on a good city to start investing in, that can command 8-10% cap rates I would love to hear more about it.

If anyone has any questions about investing in Santa Barbara I'm happy to share my knowledge with you! Excited to learn and grow with everyone, Cheers.

[Account Closed]

Originally posted by @Jonathan Gilkeson:

@Jim Keller

@Account Closed I probably should have been more specific that I'm looking to invest in multi-unit properties out of state, not so much single family unless the numbers really made sense. Can you please explain this comment - "If properties are actually selling at $100,000 in the "cheaper market" then the cap rates would be 12% and you have to make $20,000 in profit JUST to break even." - where is the $20,000 in profit coming from?

@Fred Tu

Good question since you've ALREADY overpaid $20,000 for the property.  More than likely you will not see profit and when you are slowly being bled on lost rents, repairs and cap ex you'll want to give up and sell only to find out you overpaid $20,000!  So with Realtors fees you'll have to dig deeper into your pocket to get out of the deal.   I'm sure "someone" will come along and offer you $25,000 less just to get the problem of your hands.  They'll turn around and sell to another "investor" from CA for a "great 10% cap rate and pocket another $20,000. 

The lesson is if you are going to buy a property based on a cap rate make sure you have actual cap rate comps from similar closed sales that are not those of your seller.   I'll sell you 12% cap rate properties all day long in a 14% cap rate market.