HELP A YOUNG INVESTOR!!

[Anthony Navarro]

Hello BiggerPockets community! This is my first post and I don’t know why I waited so long. I have listened to almost every podcast and read the forums as often as I can.

A little bit about myself is that I am 24 years old and live in the Bay Area specifically the East Bay. I have been interested bordering on obsessive on investing in real estate since I was in high school. I have saved all my money from all my jobs during high school and college and recently graduated from college last May and make a pretty good income and live on the bare minimum so that I could save as much as possible for the last year. I am also partnering with my father who has saved most of his life and looking for passive income besides his pension and 401K as he inches closer to retirement. I currently work as a personal trainer and a resident manager for a 70 unit complex (I did this to gain experience and learn the ins and outs of real estate).

My big question to the BiggerPockets community is what should I do? My goal is to first house-hack (purchase a duplex, triplex, or quadplex live in one and rent the others out) after doing this I am willing to invest 1-2 hours away. My main goal is cash flow and building a portfolio that cash flows enough to build financial freedom. But I keep hearing from blogs, friends, and others that it is not time to buy real estate that I should wait because the market is going to drop. Also, when I look at different properties where I live in the East Bay nothing makes sense on paper to invest in. When I compare to the 1% rule everything I see is closer to .6% or .7%.

What would you do if you were in my situation and had a goal of cash-flow and financial freedom? My biggest obstacle that I seem to have to overcome is not having patience and wanting to dive right in. Thank you so much for taking your time to read my post and any advice is greatly appreciated!

Have a great day!

-Anthony Navarro 

[Arlen Chou]

@Anthony Navarro the decision to stay local vs a few hours or even a different state is a debate that ignites fairly often.  I suggest to new investors, that at the beginning of your investment carrier, to look at what best fits their particular skill sets/strengths instead of hunting for the best "on paper" deal.  

Trying to find a 1% rule deal in the Bay Area, when you have limited financial resources or experience will be an exercise in frustration.  They do exist, but to capture those deals a player has to be in a very strong financial position.  In the BA, these deals normally start off as less than 1% deals, but a plan would have to be created, prior to purchase, to drive it to above 1%.  This plan usually revolves some type of re-positioning of units to a higher rent level.  

Your goal of "financial freedom" is great but it is vague.  You need to put a time line on that goal and target a dollar number that defines that goal.  Without a timeline and a dollar number it is very difficult for anybody to put forth a meaningful suggestion to a strategy.  However, I would like to highlight that you have an advantage that many people do not; you are already a PM/resident manager in the Bay Area, so you should be learning very quickly how to deal with incoming/existing/outgoing tenants.  You also have the opportunity to build up a vendor list/cost list for the local area.  I believe that it would be a waste of this advantage for you to look hours away from your location and potentially hire somebody else to do work that you do for a living.  You could try and self manage a remote property yourself, but you probably already can guess how difficult and time consuming that could be...

House hacking is a great way to start. I personally started with a single townhouse and got housemates. But my goal was measured in decades not years or months so my strategy was built on BRRR, way before that was a "thing".

Good luck to you!

-Arlen