New Members from Bay Area

[Jane Dang]

Hi Everyone, I am new to this site.  I am from bay area where real estate investment becomes so difficult.  I want to do some out of state investment but have no clue where to start.  I am currently working in IT field but want to be able to quit my jobs in next 10 years.  I hope investing in real estate can give me a substitute income when it is time.  I would like to network with people who have similar goals and learn from people who have done this successfully.

If someone can share with me how to calculate a 'make sense' rental investment? like how much down payment would be added to calculate a positive income for a rental property? what is your formula to analyze a rental investment?

 I have relatives who are living in Dallas, Texas so I start looking in that area.   I found Highland Park, University Park are good neighborhoods but they are expensive like bay area.  The reason I look these two places because they are good locations/good school where rental demands are high.  I analyze a few condo with 25% down payment and it is always giving a negative -$200-$300/month.

Where should be an good area to invest in Dallas, or where else.  Please advise.

regards,

Jane

[Arlen Chou]

@Jane Dang Texas is a great investment state, BUT.... it has high property taxes.  Your relatives probably don't mind because they don't pay state income tax.  However in your case, you live in California with high income taxes and investing in Texas would expose you to high property taxes. I think you would be doing yourself a disservice by investing in that state.  Prop 13 in California is what I call an "unfair advantage" for buy and hold investors in this state.  If you get something in appreciating market, like the Bay Area, and you hold on to it for a long time you will see the value of your property rise, but the property taxes stay very low because of prop 13.  

When you look at the numbers, take ALL numbers into consideration before you pull the trigger.  I have an office in the Richardson/Plano area and I have watched the market there for 10 years go up up up, but I have seen property taxes go up up up too.  Just a word of caution... 

There is a meet up in Milpitas next week hosted by @Johnson H. You should come down and talk to some local investors.  There will be so many people with divers investing strategies that it might be a good opportunity for you to get first person input from many different angles .