New to REI looking to house hack or for multi-family

[Charlene Chow]

Hi everyone. My name is Charlene. I work as a Physician Assistant in the Bay Area, but am really looking to start investing in real estate and building my passive income.  My 5 year goal is to make enough in passive income to quit my job in order to spend more time with my two kids, travel more, and secure retirement. 

I'm brand new to REI, but have been listening to the BP Podcasts nonstop during my daily commutes and am extremely motivated to get going with this. Ideally to start, I would like to house hack a 2-4 unit property, but it feels nearly impossible here in the Bay Area given the crazy housing prices. I am partnering up with a friend, but don't know how to make it a fair proposition. Does anyone have any suggestions?

If house hacking doesn't pan out, we are also looking at buying a small multi-family (again 2-4 units) in several areas, including Sacramento, CA; Reno, NV; Everett, WA; Tacoma, WA.  If anybody has any contacts to start building our core 4 in these areas, it would be greatly appreciated.

Can't wait to get started!  Thanks everyone!

[Wes Blackwell]

@Charlene Chow

I'm an agent in Sacramento who works with lots of investors just like yourself, so believe me when I tell you that you're not alone. You want to get started in real estate investing, but you look around at the sky-high prices in the Bay Area and nothing seems to make sense... what's a beginning investor to do?

I would suggest staying in California if you can since you're new to this, because unless you have some boots on the ground in other states it might be pretty inconvenient to have to fly out there if needed for some property emergency (like the home catches on fire, flood, etc.)

With 25% down you can make the numbers work in Sacramento. No, you probably aren't going to be cashflowing out the wazoo to begin with, but with the rent growth and appreciation you'll likely make far more in the long run than buying in a place where the cashflow is high but the property sells for exactly what you bought it for 5-10 years from now.

For house hacking, it still may be plausible, but you should adjust your goal from making money to saving money. The idea is to get as close to mortgage-free as possible. Usually only achievable with fourplexes. That way you are able to control an expensive asset for far less than it would cost you monthly otherwise.

Feel free to ask more questions here and we'll try to get you pointed in the right direction :-)