New Investor based in San Luis Obispo County, California

[Sander A Swenson]

My name is Sander Swenson, I am largely new when it comes to investing in real estate, but my father has been a property manager in the Bay Area since I can remember. I've been around Real Estate my entire life because of this. At the moment I am working towards my real estate agent license in CA and otherwise going to college in San Luis Obispo, CA. I've been researching real estate like mad for the past year or so, having already chewed my way through some of the more popular real estate books. I found bigger pockets through the podcast, of course.

As far as real estate philosophy goes; I want a steady form of income doing something outside of 'working for the man' so that I can be comfortable no matter the job state. Largely, that equates to income for me in the short term. Long term, I want to be as recession-proof as possible and own a couple of doors outright before I turn 50.

For a first step: I am hoping to buy a small multiplex that needs some maintenance to rent out to students, and ideally, live in one unit. From what I've seen around here there are a few multiplexes that are basically just homes with walls through the living room, making one 2 bed and one 1 bed unit on the property. Basically, I want to live somewhere for 'free'.

After this, I hope to have some amount of income to direct to a Solo 401k and invest in notes. The idea of being paid to own a piece of paper that says a property is mine, then the possibility of re-acquiring that house for in the case of foreclosure just tickles me. And otherwise just invest in multiplexes in the long term afterward. The aim is to use a 1031 exchange to move up to, eventually, a 15 door property so that the day to day can be handled by an on-site manager, and I am able to allot my time wherever I deem necessary (probably more real estate).

Hopefully, that was all clear. If any of you have a moment, I have a few questions as well:

Where in the broadly pacific coast would be your opportune place to invest for cash flow?

How do you do your dd for a state or city before deciding to invest in it?

What do you do, rather than rent out properties, when renting is just not a good option for a location?

What do you do to invest when the housing market begins to fall or level out?

Thank you all for your time and dedication to this wonderful forum, I hope I will one day be able to contribute even half as much as some of you already have. 

[Tim Kunz]

@Sander A Swenson welcome to BP, this is great place to be. You have some solid goals laid out.

1) As you've probably heard and seen through your research California is a tough place to cash flow in general and especially the coastal areas with housing prices, your best bet would be multi family units with deferred maintenance or get creative with an SFR to make the numbers work in terms of cash flow.

2). @Ben Tilbury pretty much summed it up on this one

3). You really need to get creative here and think outside of the box AND have an exit strategy in place before buying. In terms of long term hold properties you can look to STR, corporate housing, renting out garages as storage, etc. I know people who have considering renting a car out with there AirBNB as a package deal. These all require substantially more work but can increase cash flow. There's a good investment summit this weekend in Oakland put on by @J. Martin he and @Al Williamson are experts on these investments (Event Link: SF Bay Summit or Bigger Pockets Event Link). The CEO of Bigger Pockets will be speaking as well which will be cool to hear.

4). There's a ton of thought on this but nobody knows when/why/how bad/etc. about the next recession so it shouldn't affect your current investment strategies.  Buy right, like Ben said be prepared to buy low when it does happen, and possibly look to invest in areas less prone to market corrections (ie. midwest markets)

Welcome to the community down here, I'm actually working with Ben on a project right now.  I'd love to meet up sometime and talk real estate and goals in general, always good to network with like minded people.

Cheers

Tim